Market Timing Brief: 2012 The Year of the Living Dead

Posted on January 4, 2012 by

The insights in this article resulted in fantastic gains for those of us who took action.  Check the performance of banks (BKX, XLF), housing (HGX, ITB), and biotech (BTK, ) since the article was written. If you would like to have free access to more insights like this, please:

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Market Timing Brief for 01-04-2012: The Year of the Living Dead

Risk is back on in the New Year.  Banks and housing which had already started rallying prior to the New Year moved up strongly today having technically died last year.  Biotech, which had been in a major slump badly lagging the market, is beginning to move again.

One negative sign for the S&P500 Index I saw today was the VIX.  It did not move down as it should have in a very positive rally.  Why?  Because traders were NOT taking off their hedges.  That is what the VIX is based upon.  It can and must still move down more.  It was only down 1.84% today.

Gold (GLD) and silver (SLV) had a great day having made important reversals that should propel more gains.  Follow my comments on Twitter to keep up with the latest (link below; I bookmark links of the Twitter pages I follow so I can dial them up fast).  We’ll have to see if the gold rally fails at higher resistance which looms above.  But that is true for any pullback.  The key question is whether the gains will be held or lost once more.  The long term signal has turned at least temporarily negative for GLD and what concerns me is that there is a case for the dollar index (USDX UUP) continuing to rally up to around 87ish which would pressure gold significantly. 

Commodities (CRB index) are stretched at this point so despite the tempting strength, it’s been a bit too much too fast.  That is not to say commodities (CRB) do not have more upside after a bit of a pullback.

It is not so clear what will happen this year.  There are mixed economic signals.  Today’s manufacturing data was improved both in China as well as in the US.  Europe is slowing still.  This means that being nimble and not giving up profits may be the game for 2012 as well as 2011 when the market was barely up for the year.  Things are still unstable in Europe we have to remember despite the bursts of enthusiasm.  The earlier bursts died and now we have this jump for joy.

However, the point for traders is that charts such as that of Europe (VGK) and Germany (EWG), as I pointed out on Twitter today, are improving.  The living dead are back in play at least for the time being.  It would be nice if there were only two shoes to drop – one in the US and one for Europe, but the closet is more like that of Imelda Marcos (a famous shoe fanatic most of you still recall).  Even Japan has something like 3 trillion dollars of debt maturing this year alone.  Risk still lurks despite even as we trade and invest in these markets.

Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.

More at: http://www.SunAndStormInvesting.com/

And to follow my Buys and Sells and up to the minute insights, please follow and bookmark my Twitter feed here: http://Twitter.com/#!/SunAndStormInv

By the way, if you “liked” this post, I would greatly appreciate it if you would “Like” it below at the “Share” arrow below and/or re-Tweet it.

Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.

2012 Copyright By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in gold, gold etf, investment, Market timing, S&P 500 Index, silver, trading, US Dollar Index | Tagged , , , , , , , , , | Leave a comment

Market Timing Brief: Stocks are “In the Middle,” gold is edging up, and the Dollar is Slipping

Posted on December 3, 2011 by

Read Latest Market Timing Feed

Market Timing Brief for 12-02-2011: Monkey in the Middle

1. Multiple markets are now in the middle of runs.  It makes it harder to add to positions that are in the middle.  You can do it if you use stops below these levels.  Giving up everything between here and the summer lows does not interest me.

2. UPDATE: GLD is now edging DOWN, not up as you can read in my Twitter feed to the right.  Today GLD hit its 50 day moving average and bounced.  The last time it did that, it failed the next day (Nov. 21st).  Things change quickly and Twitter is the fastest technology I have to communicate with you.

Gold is still in a market timing up trend over the short term.  But there is overhead resistance as shown in the chart from Friday (click here for all my latest updates:  Read My Feed).  I commented on Twitter on Friday that the silver chart (SLV) is not as supportive as the gold chart.  SLV could start sliding down its 50 day moving average and then break it.

3. Sentiment is not that supportive of more than a moderate rally as I outline on my AAII sentiment survey page here: Survey Says! AAII Survey Review

4. The US Dollar is in danger of breaking on a market timing basis, but the near month dollar futures sit at the 50 day moving average, which must be broken soon (see chart below).  We do have a lower high in for November as well as a break in the upward wedge I pointed out previously, so the dollar Bears have the ball overall.

US Dollar Index Chart: near month futures market timing

US Dollar Index Market Timing Chart

5. The stock market indices have some room to rally, but won’t if the Europeans mess up in any significant way.  They are still making changes to a system that are extremely awkward given the lack of a common governmental body.   The ECB was obviously not well thought out as a concept.

Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.

More at: http://www.SunAndStormInvesting.com/

And on Twitter: http://twitter.com/#!/DavidBDurandMD

By the way, if you “liked” this post, I would greatly appreciate it if you would “Like” it below at the “Share” arrow below and/or re-Tweet it.

Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.

The last video update on the Stock Market is here: This Weeks Video Chart Update (update on Sunday 12-04-2011)

Follow my Twitter comments during the market day (link to right).

2011 Wall Street Sun and Storm Report, LLC All rights reserved.

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Market Timing Brief: Stocks and Gold Fall as the US Dollar Wedges Precariously Upward

Posted on November 22, 2011 by

Market Timing Brief for 11-21-2011: Bullish Signs and Hopes in a Sea of Red

Europe remains a mess and the US is not far behind with lawmakers unable to make any progress on the deficit  The fact that they can now put off the deficit until after then next Presidential election is very convenient!  S&P is threatening to downgrade our debt again if the $1.2 trillion in automatic cuts are eliminated.  Enough is enough.  Let’s vote the bums out – regardless of party affiliation and elect people who have brains that think independently rather than simply follow the party line.

The VIX volatility index failed to hold above the 50 day moving average today (VXX, VXZ, SPY,SPX).  That is bullish for the stock markets.   Seasonality is often positive over the two days prior to holidays.  In addition, I suspect Black Friday sales will be OK which could boost the market by Monday.

Gold continues to slide and has more to go (GLD, IAU, DGP).  It still appears to be a correction, rather than more, but I will monitor this of course.  Commodities are sinking with gold.  I claimed weeks ago that European nations would be selling gold to raise cash and that has become a mainstream concept at this point.

Since the dollar is at risk of breaking an upward wedge to the downside, it could crash back to the Oct. low (USDX, UUP).  That would spur a gold rally, so we may not have far to go until gold shines once more.  My feeling is that you may as well buy it on the way up rather than down.

Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.

More at: http://www.SunAndStormInvesting.com/

And on Twitter: http://twitter.com/#!/DavidBDurandMD

By the way, if you “liked” this post, I would greatly appreciate it if you would “Like” it below at the “Share” arrow below and/or re-Tweet it.

Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.

The last video update on the Stock Market is here: This Weeks Video Chart Update

Been wondering about how investors are feeling? (will be updated tomorrow)

Survey Says! (AAII Sentiment Survey that is!)

I’ll put up an update on Saturday on sentiment.

Follow my Twitter comments during the market day (link to right).

2011 Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in gold, gold etf, investment, Market timing, S&P 500 Index, trading, US Dollar Index | Tagged , , , , , , , , , | Leave a comment

Market Timing Brief: Seven Signs on the Direction for Stocks, Gold, and the US Dollar

Posted on November 16, 2011 by

Market Timing Tells on the Markets

NOTE ADDED: Friday, 11-18-11 on VIX

1.The SP500 Index (SPX; SPY) is at the lower up trend line of the triangle the SP500 has been in as explained in this week’s video chart.  If we break that line, there will significantly more damage.

2. On a positive note, the housing index barely fell today, down only 0.04%.  The entire market was down on the Fitch report that said US banks were significantly exposed to the Euro Mess.  We already knew that.  But apparently, when the same negative statements are repeated, more people hear them the next time.   Banks were not down quite as much as I expected either (BKX; XLF)

3. Another positive is that the consumer is buying at some places such as Home Depot, while the results at Walmart were not as perky.  I have the feeling it’s going to be a white Christmas for retail however.  US  consumers AND investors are not as focused on Europe as the professionals are.  Perhaps they “should be,” but they are not.

4. The US dollar rally (USDX; UUP) is posing a bit of a threat to multinational earnings strength, but sooner or later the money press will pop out again at the Fed if that trend gets too strong.  The Fed is going to want to manage the dollar index strength within a band and we’re pressing the upper part of the band at this point.

5. Dollar strength means weakness for gold (GLD ETF).  Gold looks like it is turning over at least for a further correction.  The weakness in the Euro may help bring in some gold buying to counteract this.  But realize that as stocks are sold, eventually gold is sold as well, both for liquidity reasons and initially simply due to dollar strength – if the dollar gets too, too strong, gold falls.

6. Emerging markets are sinking.  Look at India (PIN).  It’s what I call a Bear 4 market.  The Chinese market is also turning over again, although it may not fall to the lowest of the recent lows.  The FXI, for example, may stop at the 50 day moving average and bounce.  If it doesn’t, that would be a very negative sign for our markets.  The world functions in unison in the 21st Century and China is a leader.  Shoot the leader and the rest fall.  (that’s why the generals stay way back in all the wars of course, except for Patton and a few others).

7. The VIX (volatility index) is moving up in the consolidation band it has been in and it has farther to go too.  Watch how it acts at around the 50 day moving average.   It has not held the VIX back, but the VIX reversals have occurred after brief and shallow rises through the 50 day moving average.   That could occur as early as tomorrow morning.

11-18-2011 NOTE:  The VIX in fact went slightly above the 50 day moving average yesterday and is moving back down a bit today.  It could just continue down with any improving Euro mess news, but Bears could point out two things:

There is the potential for a reverse head and shoulders formation on the daily chart, which could cause the VIX to blast up to somewhere beyond the August VIX high (and the SP500 index would be falling hard in unison).  The head would be the August low and the shoulders would be the mid-October low and the November low.

This “blast off” is activated if and when the VIX moves up through the “top” of the formation which is represented by the highs on the daily chart from mid-October on.  It seems more likely that the VIX will drop toward year end.  We could then sell off again, but let’s not get too far ahead of the market!  If Black Friday shopping is strong the Bulls will be emboldened.

By the way, if you “liked” this post, I would greatly appreciate it if you would “Like” it below at the “Share” arrow below and/or re-Tweet it.

Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.

I posted an important Update on the Stock Market Here: This Weeks Video Chart Update

Been wondering about how investors are feeling?

Survey Says! (AAII Sentiment Survey that is!)

I’ll put up an update on Saturday on sentiment.

Follow my Twitter comments during the market day (link to right).

2011 Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in gold, gold etf, investment, Market timing, S&P 500 Index, trading, US Dollar Index | Tagged , , , , , , , , , | Leave a comment

Market Timing Brief: Tells on Stocks, Gold and the US Dollar

Posted on November 10, 2011 by

Market Timing Tells on the Markets (with 11-11-11 update at base)

1. Follow the bond market.  The last time the stock market moved down briskly, bonds were rallying hard.  Unfortunately the bond people are off on Veterans Day, so we won’t have this “tell” on Friday.

2. The action on 11-10-2011 was not that helpful.  Most indices made very little progress against significant overhead resistance.

3. The US dollar is still in rally mode (UUP).  It barely slipped today, so the dollar rally is still intact.  The Europeans are still floundering, which will fuel the dollar rally further.

4. That makes it harder for gold to make progress.  Although gold (GLD ETF) did hold up at the daily uptrend line (see my gold tracking page on the main site for two GLD charts; see publishing schedule for link), it appears that it is being pulled back to at least the 50 day moving average for a test,  which may not hold.  I explained how to manage a market timing entry on support in the article from today on the gold tracking page.

5. The stock indices including the SP500 Index can all continue to recover as long as the VIX (fear or volatility index) does not blast off through overhead resistance.  I put up the VIX chart on the main site today (go to the “Read My Feed” page to see it).  As long as we stay below immediate overhead market timing resistance, the rally will survive another day.

11-11-11 Market Timing Update:

1. Italian 10 year notes fell well below 7% today, as Italy moved to initiate the demanded austerity measures. This has calmed the world’s markets substantially. The VIX, or volatility index, collapsed below 30.16 at open now 29.61. 30.16 was key support before and now we’ve moved below that. That means fear has dropped and the rally can proceed more easily. Remember of course that fear can come back in a day as it did earlier this week, so following the VIX is not enough. We have to pay attention to whether Europe is truly solving its problems.

2. Dollar breakout was broken.  UUP is now below the mid-Oct. high and Nov. 1 high. This supports stocks in that earnings of multinationals become more competitive. It also results in inflation of stock prices, one of the Fed’s stated goals.

3. The GLD (gold ETF) has held up at the uptrend line on the daily chart and could continue to rally from here.  I would not rule out a bit more correction as stated above, but it does not have to happen. The issue for individual investors is that you cannot trade gold in the overnight market, at least not most of us.

Currency traders do that every day. Since gold is reflecting the strength of the dollar most days now even more than it reflects endogenous buying and selling of gold, the price can whip around overnight entirely based on moves in the dollar. And most of us are buying gold in dollars.

I advocate holding a long term gold position, but have been trading a second position. It may be smarter now to wait for a move over the Nov. 8th high to buy back that trading position. Buying the rise back above the uptrend line was another such point that I mentioned yesterday when it was happening.

Just be aware that today, you are selling the US dollar more so than you are buying gold. As reported by Kitco.com, gold is up 0.64% due to a dollar decline, while gold buying only amounts to 0.25% of the move in gold for a total of 0.89%. So actually you are more of a currency trader today, shorting the US dollar than a gold buyer if you buy the GLD gold ETF. See my “Read My Feed” page and scroll down to my article on “Gold Trading Signals: Market Timing Gold and GLD Update” to learn more about this concept.

4. The SP500 Index is now above 1249.05 resistance and is rising to challenge the 200 day moving average.  It won’t take long to find out if it has further momentum as the 200 day moving average  is at 1272.24 at the moment, and the SP500 Index is at 1257.37

By the way, if you “liked” this post, I would greatly appreciate it if you would “Like” it below at the “Share” arrow below and/or re-Tweet it.

Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.

I posted an important Update on the Stock Market Here: This Weeks Video Chart Update

Been wondering about how investors are feeling?

Survey Says! (AAII Sentiment Survey that is!)

I’ll put up an update on Saturday on sentiment.

Follow my Twitter comments during the market day (link to right).

2011 Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in gold, gold etf, investment, Market timing, S&P 500 Index, trading, US Dollar Index | Tagged , , , , , , , , , | Leave a comment

Market Timing Brief: The Critical Signals to Watch

Posted on November 1, 2011 by

The Tells on this Market

Treasuries have rallied again and are testing the prior market timing consolidations in both the 10 year note and the 30 year bond.  The VIX (“fear index”) moved up in the downtrend.  The market is still fixated on the 30.16 VIX low I believe, so rising above there could trigger some selling.  It could prove a reversal point for the Bulls.  We won’t know until or if we get there.

Today’s SP500 Index close was just above support at around 1249.  The close was at 1253.30, so we are already nearby.  The banking index (BKX) is slightly below the August high.  If you see the BKX break down further with the VIX rising above the resistance level mentioned and Treasuries rallying through the prior consolidation, the SP500 will likely fall to support lower than 1249.05.  The other index to watch is the NDX (tech; QQQ). If it fails to regain its recent new high, again, the SP500 index will likely be selling off.

There is yet another “tell” on this market – the US dollar.  For this to be a small correction on the way to higher highs, Europe will have to improve its story.  Otherwise, the US dollar will continue to rise through the prior consolidation level through which it had fallen and move straight back up.  That market timing signal would mean serious damage to the Euro and all major global stock markets.

Of the pullbacks we’ve had to date, this one is perhaps the best place for the market to fail.  Why?  Because many have reversed from important resistance points.  I am not saying it must fail, but this is a place that could be  a pivot point depending on the flow of news.  Let’s hope Europe looks better on Tuesday than it did on Monday!

By the way, if you “liked” this post, I would greatly appreciate it if you would “Like” it below at the “Share” arrow below and/or re-Tweet it.

Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.

I posted an important Update on the Stock Market Here: This Weeks Video Chart Update

Been wondering about how investors are feeling?

Survey Says! (AAII Sentiment Survey that is!)

Follow my Twitter comments during the market day (link to right).

And for some fun with the latest Fed Statement: Fun with the Federal Reserve Statement

© 2011 Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Market timing, S&P 500 Index, trading, US Dollar Index | Tagged , , , , , , , , , | Leave a comment

Market Timing Brief: From Selling the Rallies to Buying the Dips

Posted on October 28, 2011 by

Market Timing Brief for 10-28-2011: Now that Europe is Solved, NOT

On 10-26-2011, I told you to sit tight.  I said the markets were retesting in a market timing terms and that the little swoon was not the next wave down.  That turned out to be good advice.  What has improved since then?

1. Europe got its act together to take care of Greek debt and has begun the process of recapitalizing their banks.

2. As a results fear began to wane a bit and the VIX slid through the 30.16 level and then some, which could auger in a further rally.

3. Most of our markets went up by 4-6% yesterday leading to the crowning of the month as the month with the largest percentage gain in history.  Talk about volatility!

Very bad has flipped to very good, so of course that makes it a bit trickier to make money.  The rally is not likely to end abruptly, but pullbacks of varying depths are likely.  There is too much at stake worldwide for the players not to do their parts.  When things get a bit ahead of themselves, you have to step into the market timing dips and buy when others are getting a bit more nervous.  Remember that investors and traders are programmed as they watch and are somewhat stuck in the fear mode even though conditions have improved.  This can lead to investors taking profits prematurely, which is to your benefit if you are underweighted in stocks during a rally.

The further twist is that you may have to be willing to take a loss to make money at this point in the rally.  Are you going to sell the next little swoon?  You won’t make money that way.  Trading blips in the market is for day traders only who have their eyes glued to the screens all day long.

There could be a 2-3% pullback any day now if one of the worldwide players says the wrong thing.  Of course, you need to set your stop loss point where YOU feel comfortable as it’s your money, but consider widening your stops a bit.  Otherwise you may stop yourself out and have trouble re-establishing your positions in the market if you fall behind.  Of note during the rise of the market this month is that the swoons that previously were enough to trigger big selling did NOT do so this time.  So that was different.  And when the market changes, we need to change and adapt to continue to make money.  Our market timing has to be clear headed.

Buying the indices that have a lot more upside to the July highs may be a good strategy now.  Examples would include emerging markets and small cap stocks.  These are also more volatile by the way (down 4% and up 4% in a day), so be sure you can stomach these sorts of moves before investing.

Realize as I tweeted yesterday ( you can follow my tweets on this webpage to the right, even if you are not on Twitter), the Euro situation is far from over with the other debtor nations still on shaky ground.  Italy is right behind Greece in needing assistance.  These headlines will generate the dips.  We’ll have to continue to watch the Euro currency for signs of failure of the overall SP500 Index rally as it is predicated on Euro zone stability.  I’ll be watching it with you.  Look for my update on the markets (the “Tracker” newsletter) this weekend.

By the way, if you “liked” this post, I would greatly appreciate it if you would “Like” it below at the “Share” arrow below and/or re-Tweet it.

Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.

I posted an important Update on the Stock Market Here: This Weeks Video Chart Update

Been wondering about how investors are feeling?

Survey Says! (AAII Sentiment Survey that is!)

I have not updated sentiment lately because it was barely moving, but I will this weekend, so check back for it.  The tease is that it’s clear how the sentiment moves over the past few weeks are going to end.   Sentiment has not been helpful in the middle range it has been in, but it’s about to become important (hint: bullishness is rising and will trigger a sell signal).

 

Gold’s Next Move: GLD Gold ETF Market Timing Update

The most recent comment on gold is above, but check back to the above link for intraday comments or on Twitter (follow link to right).

And for some fun with the latest Fed Statement: Fun with the Federal Reserve Statement

© 2011 Wall Street Sun and Storm Report, LLC All rights reserved.

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