Sunday, January 31, 2010

Steve Jobs, Apple, the iPad, and King Gillette


On Wednesday, after much hype and drama, Steve Jobs walked onstage and unveiled Apple’s latest creation - the iPad. Having watched almost every key address for Apple for many years we, like many others, were disappointed that the product didn’t live up to the hype. Nonetheless, Apple will sell a boatload of these products, but not as many as the iPhone.

Upon reflection, it occurred to me that Steve Jobs is changing the whole business model of Apple and we don’t believe anyone has caught on to this yet.

In all the reports we’ve read after the launch of the iPad, we think every writer /analyst missed this key point: Steve Jobs wants to be like King Gillette.

If you don’t know who King Gillette was, you may not old enough to shave. King Gillette started his business at the beginning of the century. His business model is what I believe Apple’s business model will be in the future.

Long ago, King Gillette decided to practically give the razor away at or below cost, but sell the razor blades separately.

So here’s what we think, we think Apple wants to give the iPhone and the iPad to as many people as possible at cost or with a small profit. Remember now, AT&T subsidized the iPhone and Apple gets a slice of the pie from every AT&T customer that has an iPhone. Now why would they do that you might ask?

The key reason, we would argue, is that Apple wants the magic of recurring revenues. This is the dream of many companies - to have millions of folks paying a small amount of money every month for using a service. What makes Apple stand out is the fact that they have an army of developers who are writing code for some very cool apps. Yes, there is an app for that. In fact, there is an app for almost every idea ever thought of.

Not only has the app store been widely successful, but Apple also has iTunes, and iBooks along with iTV coming down the road. So this is what we believe Apple’s business model is going to be: with 125 million people who have giving Apple their contact and credit card information, Apple has a huge base of customers much like the newspapers and magazines did in the ’60s and ’70s, but on a much smaller scale. Now Apple can upsell products to those customers at will. The genius part about all of this is the fact that other people are creating products to be sold through the Apple store. Apple just reinvented the King Gillette model in a thoroughly modern way. Hat’s off to you Steve.

That’s my take on Apple’s stealth business model.

Now let’s take a look at the stock.

In our short video, we explain to you some key factors we are watching that we think will make the difference in this market. If you have a few minutes, please take the time to watch this juggernaut of a stock and what I think is ahead for the market in the next 2 months.

Just click here to watch the video and as always our videos are free to watch and there is no registration required.

The only request that we make is that if you find the video interesting or even disagree with the analysis, please leave a comment. We would love to hear from you.

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Educational ETF’s, Futures & CFD’s Low Risk Trading Setups Explained

I thought I would put this more detailed report on finding and trading low risk setups for gold, silver, oil indexes etc…. In short it does not matter what time frame you trade with or if you trade exchange traded funds, futures contracts or CFD’s (contract of difference).

This type of trading setup works for virtually every investment but I mainly focus on trading: Gold Futures, Gold ETFs, Gold CFD’s, and the SP500 & Dow 30 futures, ETF’s and CFD’s as I find they are very accurate and profitable.

Obviously swing traders who watch the daily chart will have few trades because it takes weeks and months for these low risk patterns to form. This is the reason I am using short term intraday charts and using a setup from yesterday (Thursday) for demonstrating my trading setups.

My Short Trading Setup – Rough Guideline
1. Trend on 2hour and 1hour charts are down
2. Increased volume during sell offs, and light volume on rallies/rising prices
3. Entry is best at Fibonacci retracement level which is also at a previous resistance level.
4. Set Stop just above the resistance level you are expecting the current price to stop at. Exit if this top is penetrated and wait for a new opportunity.
5. Cover half of your position just before the investment reaches the first level of support to lock in gains and reduce overall risk.
6. Once the price of the investment starts to make a new short term high exit the balance of the position. Shown in the charts below.

DIA – Dow 30 Index Fund
This is a chart I sent to members on Thursday pointing out the market weakness. We had a nice sell off in the morning and the price drifted up on light volume later in the afternoon. This low volume drift is crucial to recognize as it tells you the general public is buying. This is what Big Money likes to see. After they crush the market with their large sell orders in the morning they take a break allowing regular retail traders/investors move the market back up before the big sellers start dumping shares again.

So, I am looking to short at a resistance level in hope the big sellers step back in.



DIA – Dow 30 Index Fund – End of Day
This chart quickly shows the two intraday setups for shorting at resistance levels. Both trades worked out well but wait until you see the results of trading with futures or CFD’s shown later.

Anyways, the first short was a great play but we did not see the big sellers step in, which led to a reversal and the price continued to move higher taking us out for a small profit.

The second short had huge selling volume indicating sellers were back in control. This play we held into the close. The next chart shows how this is done.



DIA – Dow 30 Index Fund – Step By Step Play
The chart is a little small to see but it explains and shows how these low risk setups should have been traded according to my trading strategy to maximize gains while minimizing risk.



Dow 30 Futures & CFD Day Trading Signals/Setups
This is the same Dow 30 index but is zoomed out so we can take advantage of the 24 hour price action which the futures market trades.

Here I show the Fibonacci retracement levels which happen to be at resistance levels from earlier that day.

During regular trading hours the trades were the same as the DIA etf above, but with futures trading you can traded 24 hours a day. So with the last ETF trade I talked about earlier we only made 28 cents profit per share, but with futures we could have held this position until it fully matured netting a total gain of 40 cents per share. This is 42% more profit simply by trading with futures or CFD’s.

To make things more exciting there happened to be another fantastic trade after dinner making us another 45 cent move. These gains may not sound like much but it equals $1000 – $3000 in profits depending on what you are trading ETF’s, Futures contracts, or CFD’s.



End of the Week Trading Education and Wrap Up
Overall this week was nothing short of awesome!
The overall market is trying to hold up but sellers continue to pull it lower. Unless there is a strong rally into the close on Friday I figure Monday will gap down because the daily charts are very scary looking. This is what makes the general public panic out as it flushes out the remaining sellers, just before the market makes a sizable bounce and possible rally to new highs.

Just click here if you would like to receive guest blogger Chris Vermeulen's intraday analysis and setups directly in your email.






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Thursday, January 28, 2010

NASDAQ Crosses Important Trend Line


One of the most powerful technical tools that a trader possesses is a pencil and a ruler. It sounds kind of old school, but the reality is trend lines in technical analysis are enormously important.

In our new video we will show you how the NASDAQ index has broken a very important trend line and what the ramifications are for this index.

We can all learn from the simplicity of this approach and how effective it is in the long run.

Just click here to enjoy the video and as always our videos are free to watch and there are no registration requirements.

Enjoy the video and please feel free to comment on blog about this simple yet effective way of trading.

Good trading,

Ray C. Parrish
President/CEO
The Stock Market Club

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Mid-Week Charts: Gold, Silver, Oil, Nat Gas and SP500

The stock indexes have been trading very choppy making it difficult for swing/trend traders. It’s during times like this when seasoned traders rise above the herd of average traders.

If you only trade one strategy like swing trading or trend trading then you are likely finding it difficult to make money right now. On the other hand, day traders are having a blast right now as they take advantage of the powerful intraday rallies and sell offs.

I personally like swing trading but during times like this, when I know it will not work, I have to switch my strategy to day trading and focus on the 60 minute and 5 minute charts.

SP500 Index Fund – Intraday Setup
I posted this chart earlier this week and I want to be sure everyone takes something away from this chart as I believe it shows a perfect low risk setup for shorting the market, or you could buy a reverse fund which goes up as the market moves down.

At first glance this chart is noisy, but if you simply focus on the all the different color analysis separately you will notice how simple trading can be and what you should be looking for.

Red Analysis:
1. Overall market trend is down so we are looking for a short trade, signs of weakness.
2. First we see a light volume test of the previous high set earlier in the day. The low volume indicates there are not many participants in the move up and that is a weak sign.
3. Between 14:30- 15:30 we notice the price start to drift higher on very light volume. Also, the price moved up into a resistance level. This to me is a perfect setup.
4. You would sell short or buy a reverse index fund at this point hoping for the market to start selling. You could also wait until it started to drop before taking a position but when a chart looks this good I try to get in at the highest price possible.

Blue Analysis:
1. The price starts to drop forming several small bear flags going into 14:30 before bouncing. Also note the volume began to rise as more selling was happening. This tells us that trading activity is predominately selling and that we should also focus on shorting when the time is right.
2. Again, the price starts to drop forming several small bear flags going from 15:00 – 15:45 before bouncing. Also note the volume began to rise as more sellers took part in this short term trend.

Black Analysis:
1. This shows more or less the resistance level, area to short the index and the nice trend down.



Gold GLD ETF Trading
Gold has been under selling pressure since early December. That powerful drop and the chart pattern it has formed will generally resolves itself after an ABC retrace pattern. I have drawn this on the chart which is what I think will happen in the near term. This daily chart of GLD ETF has a small 4 day bear flag and bearish reversal candle which is pointing to lower prices in the near term.



Silver SLV ETF Trading
Silver has a funky looking chart. It has formed a large megaphone pattern and possible head & shoulders pattern. Both are bearish and if we use the Head & Shoulders to calculate where silver could end up trading if it continues to break down, then $14.00 would be a level to look for a bounce.



Natural Gas UNG Fund
The natural gas fund UNG has been in a down trend for over a year and the recent drop looks to be the start of another sell off. This could possibly form a reverse head & shoulders pattern with this drop moving UNG down to the $8.75 – $9.00 area. We will have to wait and watch things unfold for now.



Crude Oil USO Fund
USO looks to be trading at support. I am inclined to patiently wait another session before possibly taking a position.



Mid-Week Trading Conclusion:
In short, I feel the overall market could bounce including stocks and possibly commodities, but the selling is not over yet in my opinion. The drop we have seen in the past week is the half way mark. So this bounce would be the starting of an ABC retrace for stock indexes. During choppy times I like to be sitting in cash and or day trading for short term profits.

Precious metals do look oversold and ready for a small bounce or sideways move; I do think they will head lower. Too many traders are still holding on to their gold positions and until a large number of them get scared out of their positions, we will not see gold rocket higher.

Natural gas looks like it’s about to head much lower this week while oil looks ready for a solid bounce off support.

We continue to wait for new low risk setups as different investment scenarios unfold.

Just Click Here to the Free Weekly ETF Trading Reports in your inbox.

Or just visit the The Gold and Oil Guy .Com.






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Tuesday, January 26, 2010

New video: Are These Markets in Trouble?


The recent run up in the markets and the fact that the markets have exceeded some key Fibonacci retracement levels has lured many investors into believing that this will be a "V" shaped recovery this time around.

For months now we have voiced our concerns that all the major indexes are in the "thin air". This new short video explores that and looks at a key Japanese candlestick formation that could really make a difference and be the first clue in the demise of the Dow.

We also want to share with you a specific number to look for in February. Should this level be broken, then it will signal a major reversal to the downside for the Dow.

Just click here to watch the new video and as always our videos are free to watch and there is no need to sign up or register to watch them. Please take a minute to leave a comment and let us know what you think.


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Monday, January 25, 2010

New Video: Where Should YOU be in the S&P 500?


Does this week's negative action in the markets spell a fantastic buying opportunity? Is it time to short this market or just wait quietly on the sidelines? What exactly does our Fibonacci levels tell us?

In today’s short video we take a fresh look the S&P 500 and what we think it is going to do in 2010. We will also be looking at an important “Trade Triangle” that has just flashed an important signal for this index.

So Just Click Here to watch the new video and as always our educational videos are free to watch, and there’s no need to register. Enjoy the video and please feel free to leave a comment.

Good trading,
Ray C. Parrish
President/CEO
The Stock Market Club

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Saturday, January 23, 2010

How Did the MarketClub World Commodity Portfolio Fare in Q4?


The last quarter of ‘09 proved to be the sweetest quarter for the year for a World Commodity Portfolio. For the quarter, we had a dollar return of $16,041.75 before commissions, which is approximately a 32% return on capital. The World Commodity Portfolio (WCP) needs $50,000 to run and is based on double margins for every market. Double margins mean that by depositing twice the amount of money that is required by the exchanges, you are effectively de-leveraging the instrument you are trading. We consider this a more conservative approach to the commodity markets.

The Q4 results have proven to be very successful for MarketClub members using this strategy. With a 90% win rate, the World Commodity Portfolio stands out as being an excellent investment vehicle over the long-term. It is interesting to note that the only market that has scored successfully in every quarter is the wheat market. The other five markets: corn, soybeans, crude oil, gold and the dollar index have all come in between the 80 and 90% range.



The key to the World Commodity Portfolio is using a consistent and scientifically proven approach to the commodity markets.

Just click here to find out more about MarketClub Membership and the value it offers.



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Thursday, January 21, 2010

5th Wave of Market Advance is Tiring Out

From guest blogger Dave Banister....

The Market Advance in the Final Stages?

It’s time for a review of the broader market indices and possible implications for traders and investors: This analysis may prove controversial, but I tend to make big picture calls at critical junctures. This analysis is getting more bearish I realize, as I’ve been bullish since Feb 25th on the markets. I simply look at all the evidence, and instead of burying my head in the sand, I take it all in and plan accordingly. Being a perma-bull or perma-bear is a quick way to under-perform the markets. I try to be nimble and trade/invest accordingly. The next few weeks are likely to be volatile, possibly to the downside a bit. The market may not have peaked quite yet, but it’s feeling like the 8th inning in the game. Below are my thoughts:

1. It appears we have the qualifications to have a potential top in since the March 2009 lows. This is due to the rebound of the Dow to above my 10400 targets I put out in late February of 2009. We have had a 61% Fibonacci retracement of the 2007 highs to the 2009 lows. In addition, we have had about a 61% time period duration with an 11 month rally which followed a 17 odd month decline. From the world in which I work, this means that the markets have fulfilled intermediate objectives for a top.

2. The caveat in this analysis, is that markets could still work their way higher. Just because we have met certain typical patterns in Time and Price movement, elliott wave patterns and the like, doesn’t mean we have peaked for sure. The markets could continue in a higher % retracement of the 17 month decline and the indices work their way higher. What I am pointing out today is that the requirements for a top have been met, and we need to be on guard. Also, we have other non elliott wave measures I use that are giving me some topping signals (Below).

At the bottom of this post is my 5 wave Elliott pattern on the Russell 2000 index. I will again note that this pattern could be re-interpreted if I wanted into a 3 wave (A-B-C) corrective pattern. It is all in the eyes of the Elliott Wave beholder I guess. Sometimes you need to take a little poetic license in the analysis. Elliott wave theory is not foolproof by any means, so I try to overlay other factors. Read my Feb 25th 2009 article on 321Gold.com if you want to see my point there. We have bullish sentiment running at extreme highs. We have the VIX or “Volatility” index running at extreme lows. The last time we had this many bulls in surveys vs bears was July and October 2007. I think we all know what happened then.

Therefore, whether this was an impulsive 5 wave pattern from March, or an A B C correction upwards… doesn’t matter much near term because in either event, the evidence is mounting for an interim top in the next 1-2 months or less. Tops don’t usually happen in one day or one week, they are a process… and we are mounting the top of this mountain I think. The bull to bear ratio is a warning flag.

Other Factors: Consumer Expectations index has rallied from a low of 22 in February 2009 (My bullish article period) to a reading of 70 now. This would make sense as these bottomed with a low market, and rise with a rising market. This means expectations have soared off the lows, along with the markets. However, how people feel about their “present situation” is rather unnerving. It has hit all time lows even with the market rebounding. This is a potential problem for sure. This is also reflected somewhat in the % of bulls in the market vs the bears… again, a warning flag.





Bottom line: Markets are at a critical juncture of higher than normal risk levels here. This does not mean we can’t trade and make profits on the long side however. What it does mean is what I’ve been hinting at lately. We are in the 5th wave up in this structure since March lows. 5th waves can be very difficult to forecast as they can be extension waves or “truncate” and reverse sharply. Friday last week was ugly, but it was also options expiration week, making analysis more difficult. Partners in this service should note that we have been aggressively taking profits and removing positions off the table in the past two weeks, as well as general advice to raise cash levels a bit. Partners who are planning to stick around for the long haul should be aware that there are times in the market to be aggressive on the long side, and times to be high in cash and sit back for awhile. Right now, the evidence is to be more cautious and to have higher than normal cash balances while we wait for confirmation of market/wave patterns.

Other notes: Robert McHugh, is a very good Elliott wave forecaster and he is also beginning to make a convincing bearish cycle/wave case now. I often ignore his analysis as he has consistently been forecasting a top for 2-3 months now, and we have plowed ahead… but now I’m watching his work a bit closely to see if it mirrors my views. Eric Hadik is also a strong cycle and time forecaster, and again, not perfect. He is also looking for potential tops into latter February and early March. I also have not reviewed his work in 10 months or so, but am starting to review it again.

We need to be on our toes to be prepared to trim back positions if needed and to cut losses quickly if needed. This update is not to alarm anyone, as there is likely one more leg up in this up cycle to higher highs yet. However, let’s be on guard.

Here is the current IWM (Russell 2000 Small cap) index chart. It’s getting long in the tooth: Does this mean the market crashes from here? No, but again, it means we may need to be extra on the guard for an interim top and to again build higher than normal cash levels…and prepare to be defensive. Stay tuned.



Dave Banister is the Chief Investment Strategist and commentator for ActiveTradingPartners.com. David has written numerous market forecast articles on various sites (SafeHaven.Com, 321Gold.com, Gold-Eagle.com, TheStreet.Com etc. ) that have proven to be extremely accurate at major junctures. You can read more at
Active Partner Trading.


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Wednesday, January 20, 2010

Markets Continue to Slide, Bears Enjoy The Near Term Advantage


The S&P 500 closed lower on Wednesday and below the 10 day moving average crossing at 1138.36. The mid range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 1129.08 are needed to confirm that a short term top has been posted. If March resumes this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 1155.15 is the next upside target. First resistance is last Monday's high crossing at 1147.90. Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 1155.15. First support is today's low crossing at 1125.30. Second support is the reaction low crossing at 1110.00.

The NASDAQ 100 closed lower on Wednesday and below the 20 day moving average crossing at 1870.77. The mid range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. Closes below last Tuesday's low crossing at 1850.0 are needed to confirm that a short term top has been posted. If March renews this winter's rally, the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00 is the next upside target. First resistance is last Monday's high crossing at 1900.00. Second resistance is the 75% retracement level of the 2007-2008 decline crossing at 1947.00. First support is last Tuesday's low crossing at 1850.00. Second support is today's low crossing at 1845.50.

The Dow closed lower on Wednesday as tightening credit in China; changes in the U.S. political landscape and lackluster earnings lead to today's sharp sell off. The mid range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If the Dow extends this week's decline, the reaction low crossing at 11423 is the next downside target. First resistance is Tuesday's high crossing at 10721. Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 11249. First support is today's low crossing at 10,517. Second support is the reaction low crossing at 10,423.

The U.S. Dollar closed sharply higher on Wednesday and above the 20 day moving average crossing at 77.79 confirming that a low has been posted. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If March extends this week's rally, December's high crossing at 78.77 is the next upside target. Closes below the 10 day moving average crossing at 77.48 would confirm that a short term top has been posted. First resistance is today's high crossing at 78.64. Second resistance is December's high crossing at 78.77. First support is the 20 day moving average crossing at 77.79. Second support is Tuesday's low crossing at 77.09.

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Here's Your Market Index Numbers For Wednesday Trading


The S&P 500 index was lower due to profit taking overnight but remains above the 10-day moving average. Stochastics and the RSI are neutral to bearish signaling that additional weakness is possible near term.

Closes below the 20 day moving average crossing at 1129.60 are needed to confirm that a short term top has been posted. If March renews this winter's rally, the 62% retracement level of the 2007-2008-decline crossing at 1155.15 is the next upside target.

SP 500 pivot point for Wednesday is 1145.48

First resistance is last Monday's high crossing at 1147.90
Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 1155.15

First support is the 20 day moving average crossing at 1129.60
Second support is the reaction low crossing at 1110.00

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The NASDAQ 100 was lower due to profit taking overnight while extending month's trading range. Stochastics and the RSI remain bearish signaling that this month's trading range appears to be a correction more of time than price.

However, closes below last Tuesday's low crossing at 1850.00 would confirm that a short term top has been posted while opening the door for a larger degree decline in price. If March renews this winter's rally, the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00 is the next upside target.

First resistance is last Monday's high crossing at 1900.00.
Second resistance is the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00.

First support is last Thursday's low crossing at 1854.75
Second support is last Tuesday's low crossing at 1850.00

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Gold was lower overnight as it consolidates below broken support marked by the 10 day moving average crossing at 1136.80. Stochastics and the RSI are bearish signaling that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 1119.10 would confirm that a short term top has been posted. If February renews the rally off December's low, the reaction high crossing at 1170.20 is the next upside target.

First resistance is last Monday's high crossing at 1163.00
Second resistance is the reaction high crossing at 1170.20

First support is the 20 day moving average crossing at 1119.10
Second support is the reaction low crossing at 1086.60

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The U.S. Dollar was overnight and trading above the 20 day moving average crossing at 77.78. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 77.78 would confirm that a short term low has been posted while opening the door for a test of December's high crossing at 78.77. If March renews the decline off December's high, the 50% retracement level of the November-December rally crossing at 76.66 is the next downside target.

First resistance is the overnight high crossing at 78.26
Second resistance is December's high crossing at 78.77

First support is Tuesday's low crossing at 77.09
Second support is last Wednesday's low crossing at 76.74

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Tuesday, January 19, 2010

Markets Rally on Positive Earnings and Election Numbers


The S&P 500 closed sharply higher on Tuesday and above the 10 day moving average crossing at 1138.41. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term.

Closes below the 20 day moving average crossing at 1127.38 are needed to confirm that a short term top has been posted. If March resumes this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 1155.15 is the next upside target.

First resistance is last Monday's high crossing at 1147.90
Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 1155.15

First support is the 20 day moving average crossing at 1127.37
Second support is today's low crossing at 1126.40

Check out the new "Trend TV"

The NASDAQ 100 closed sharply higher on Tuesday and the high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bearish despite today's rally signaling that sideways to lower prices are possible near term.

Closes below last Tuesday's low crossing at 1850.0 are needed to confirm that a short term top has been posted. If March renews this winter's rally, the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00 is the next upside target.

First resistance is last Monday's high crossing at 1900.00
Second resistance is the 75% retracement level of the 2007-2008 decline crossing at 1947.00

First support is last Friday's low crossing at 1854.75
Second support is last Tuesday's low crossing at 1850.00

Today’s Stock Market Club Trading Triangles

The Dow closed sharply higher on Tuesday as it extends this winter's rally. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought and are bearish signaling that at the very least the Dow is vulnerable to a pause or correction in this winter's rally.

Closes below the 20 day moving average crossing at 10561 are needed to confirm that a short term top has been posted. If the Dow extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 11249 is the next upside target.

First resistance is today's high crossing at 10721
Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 11249

First support is last Friday's low crossing at 10,561
Second support is the 20 day moving average crossing at 10,561

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Monday, January 18, 2010

How to Trade Gold and other Commodity ETF’s

Whether you are trading stocks, ETFs or futures, technical analysis is the preferred choice for short term traders. Technical analysis in short is the study of price and volume movements on charts. It can be used for studying charts in any time frame whether you are a 1 minute chartist or a long term investor using monthly charts.

Using technical analysis in my opinion really opens the door for a trader to lower his/her overall risk when investing money. I always like to know if the investments I am watching are trading near a critical price level (support or resistance). During these times you can take positions that have very clear entry and exit points for trading. Also it puts the odds in your favor when a position is entered in the same direction of the underlying trend.

Price action is how we make money in the market, so I strictly follow price and volume when trading as they are the least lagging indicator on what the market it doing.

I have put together a few charts using commodity ETFs to show you what I am seeing in the market and what we should expect to see in the coming days.

GLD ETF Trader – Daily Trend Chart
The gold trading chart below shows two different types of trends. The initial timeframe of the chart illustrates what I call a Normal Trend. This is a series of higher highs and lows.

This type of trend allows an investment to continue profitably for a very long period of time. For example a daily chart like the one below can continue to trend like this for 6-8 months. The reason for this is because price appreciation is increasing at a rate which investors are comfortable with. Also, the pullbacks cleanse the investment vehicle of weak traders every few weeks allowing fresh money to enter at higher price.

Now if you look at the later timeframe of this rally we observe a rally phase I call an Extended Rally. An extended rally is when price appreciates without any pullbacks.

You can make a fortune with this trend very quickly, but you must realize that reversals are fast and sharp. And that, we observe, is how GLD performed in December. While some call December’s price drop a pullback, I call it a technical breakdown. The sharp price reversal and heavy volume associated with this type of move generally provides excellent short term momentum trades. A lot of damage is done to the investment on a heavy volume breakdown taking weeks for a recovering to occur.

Normal trend rally, extended rally, predictably fast and sharp technical breakdown followed by weeks of recovery.



DIA Exchange Traded Fund – Daily Trend Trading
The DIA exchange traded fund shows a very similar chart as gold above. First we have a nice Normal Trend that then evolved into an Extended Trend. The trend for the DIA index fund is not nearly as steep at the gold chart, so it could trend a little longer. But once the price breaks down, everyone is going to be selling out to lock in gains and cut losses before new positions are entered.

I have several tools and stats I use for helping me in timing turning points. Some are great short term indicators only predicting 1-2 days out like following small cap stocks, or gold stocks in relation to the broad index, and others are long term things like cycles, volume analysis, market internals and the volatility index.

My point here is to keep everyone alert and ready to take profits if we see things start to roll over. Friday there was BIG selling volume across the board – so don’t blink now.



Silver & Gold ETF Trading – Daily Charts
Below is the chart of the silver ETF SLV and I overlaid the GLD gold fund in green so you can see how they move in sync. The blue boxes on the chart show the pattern that I think is forming and what to expect in the coming days.

From looking at gold in both other currencies and with respect to gold stocks which have been underperforming, I feel we are going to see lower prices still. At the moment I am neutral on silver and gold for the short term time frame (daily & 60 minute charts).



Commodity Trading Conclusion
In short, gold and silver have been underperforming the market recently which is not what we want to see. They have led the market higher all year but are now taking a breather.

The way I see gold, silver, oil and natural gas is that they are trading below their recent highs and still have more room to fall before landing on a solid support level.

The stock market is now over extended and looks ready for a sharp correction. If this happens we will see commodities drop and test lower prices also.

There is not much we can do right now other than protect our current long positions by tightening our stops. Depending on the strength of the breakdown, there could be a great opportunity for short term traders (60 minute chart traders) to make some quick money. I expect a sell off which will last 3-5 days at the least.

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Chris Vermeulen "The Gold and Oil Guy"







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Gold Daily Technical Outlook For Monday

Intraday bias in Gold remains neutral for the moment as sideway trading from 1163 is still in progress. With 1119.2 support intact, another rise could still be seen and above 1163 will bring stronger rebound into 1169.3/1227.5 resistance zone. However, upside should be limited there and bring another fall to continue to consolidation pattern from 1227.5. On the downside, below 1119.2 will suggest that recovery from 1075.2 has completed already and will flip intraday bias back to the downside for 1075.2 and below.

In the bigger picture, rise from 681 is expected to develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave and has possibly completed at 1227.5 after missing 100% projection of 681 to 1007.7 from 931.3 at 1258. Considering that weekly MACD is staying below signal line, consolidation from 1227.5 is expected to extend further, either in form of sideway consolidation or a deeper pull back to 1026.9/1072 support zone, or even further to retest 1000 psychological level. But after all, downside should be contained well above 931.3 support and bring up trend resumption to another high above 1227.5.....Comex Gold Continuous Contract 4 Hours Chart.

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Sunday, January 17, 2010

Gold Weekly Technical Outlook


Gold edged higher to 1163 last week but lost momentum ahead of 61.8% retracement of 1227.5 to 1075.2 and turned sideway. With 1119.2 support intact, another rise could still be seen and above 1163 will bring stronger rebound into 1169.3/1227.5 resistance zone. However, upside should be limited there and bring another fall to continue to consolidation pattern from 1227.5. On the downside, below 1119.2 will suggest that recovery from 1075.2 has completed already and will flip intraday bias back to the downside for 1075.2 and below.

In the bigger picture, rise from 681 is expected to develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave and has possibly completed at 1227.5 after missing 100% projection of 681 to 1007.7 from 931.3 at 1258. Considering that weekly MACD is staying below signal line, consolidation from 1227.5 is expected to extend further, either in form of sideway consolidation or a deeper pull back to 1026.9/1072 support zone, or even further to retest 1000 psychological level. But after all, downside should be contained well above 931.3 support and bring up trend resumption to another high above 1227.5.

In the long term picture, rise from 681 is treated as resumption of the long term up trend from 1999 low of 253 after interim consolidation from 1033.9 has completed in form of an expanding triangle. Next long term target is 100% projection of 253 to 1033.9 from 681 at 1460 level. We'll hold on to the bullish view as long as 931.3 structural support holds.....Comex Gold Continuous Contract 4 Hours Chart.

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Friday, January 15, 2010

Market Bulls Step Aside Going Into The Weekend, Bears Take The Advantage


The S&P 500 index closed sharply lower on Friday and below the 10 day moving average crossing at 1136.66 signaling that a short term top has been posted. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term.

Closes below the 20 day moving average crossing at 1124.78 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 1155.15 is the next upside target.

First resistance is Monday's high crossing at 1147.90
Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 1155.15

First support is today's low crossing at 1127.50
Second support is the 20 day moving average crossing at 1124.78

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The NASDAQ 100 closed sharply lower on Friday and the low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.

Closes below Tuesday's low crossing at 1850.0 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00 is the next upside target.

First resistance is Monday's high crossing at 1900.00
Second resistance is the 75% retracement level of the 2007-2008 decline crossing at 1947.00

First support is today's low crossing at 1854.75
Second support is Tuesday's low crossing at 1850.00

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The Dow closed sharply lower due to profit taking on Friday and below the 10 day moving average crossing at 10,622 signaling that a short term top might be in place or is near. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought and are turning bearish signaling that at the very least the Dow is vulnerable to a pause or correction in this winter's rally.

Closes below the 20 day moving average crossing at 10540 are needed to confirm that a short term top has been posted. If the Dow extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 11249 is the next upside target.

First resistance is Thursday's high crossing at 10716
Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 11249

First support is today's low crossing at 10,561
Second support is the 20 day moving average crossing at 10,540

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Do The Bulls Have The Near Term Advantage? Here's Fridays Numbers


The March S&P 500 index was lower due to profit taking overnight as it consolidates some of this week's rally. Stochastics and the RSI are diverging but are turning neutral to bullish hinting that additional short term gains are possible near term.

If March extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 1155.15 is the next upside target. Closes below the 20 day moving average crossing at 1125.37 are needed to confirm that a short term top has been posted.

Friday's pivot point, our line in the sand is 1147.56

First resistance is Monday's high crossing at 1147.90
Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 1155.15

First support is the 10 day moving average crossing at 1137.86
Second support is the 20 day moving average crossing at 1125.37

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The NASDAQ 100 was lower overnight as it consolidates some of this week's rally. Stochastics and the RSI are neutral to bearish hinting that a short term top might be in or is near. Closes below Tuesday's low crossing at 1850.00 are needed to confirm that a short term top has been posted.

If March renews this winter's rally, the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00 is the next upside target.

First resistance is Monday's high crossing at 1900.00
Second resistance is the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00

First support is the 20 day moving average crossing at 1864.08
Second support is Tuesday's low crossing at 1850.00

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The U.S. Dollar was higher due to short covering overnight as it consolidates some of this week's decline. Stochastics and the RSI are oversold and are turning neutral hinting that a short term low might be in or is near.

Closes above the 20 day moving average crossing at 77.85 are needed to confirm that a short term low has been posted. If March extends the decline off December's high, the 50% retracement level of the November-December rally crossing at 76.66 is the next downside target.

First resistance is the 10 day moving average crossing at 77.46
Second resistance is the 20 day moving average crossing at 77.85

First support is Wednesday's low crossing at 76.74
Second support is the 50% retracement level of the November-December rally crossing at 76.66

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Thursday, January 14, 2010

New Trend TV Video - Applications of Candlestick Charting


Many investors attempt to incorporate candlestick charting into their trading plans, however few know why this tool has become so popular.

In this complimentary video, “Advanced Applications of Candlestick Charting,” authors, software programmers, and co-founders of the International Pacific Trading Company, Gary Wagner & Brad Matheny will walk you through:

-History of candlestick charting
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You’ll watch and listen as Wagner explains the importance of using this strategy. He says, in part, “Candlestick patterns are a mathematical formula which illustrate the psychological market sentiment. In other words, as a market reverses, or a market is moving in an up trend, there are certain traits that can be distilled in terms of mathematical formulas that will reveal some very important information.”

This 100 minute complimentary video can be found on Trend TV. You don’t have to worry about watching the whole video at once. After you have a password, you can revisit anytime to watch the rest of a video, review a video, or watch other videos on Trend TV.

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Good Trading,
Ray C. Parrish
President/CEO Stock Market Club

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Gold Futures Trading YG Contract – Hourly Chart

Gold is my favorite and most profitable investment vehicle. I trade gold using the GLD etf and futures. Last week I wrote about this key resistance level and how I was waiting to trade until the Friday unemployment numbers were out and to see how the market reacted before putting our money to work. Over the weekend the bullish sentiment caused gold to gap above that key resistance level but has sold back down after beginning the new week.

The chart below shows that I am neutral/bearish for the next few days. Heavy selling and the small bear flag is warning me of lower prices. The natural tendency for gold is to drift higher through the night from 6pm EST – 4am EST, so we could see higher prices in the short term but what happens in the following 1-3 days will set the tone for gold.



Chris Vermeulen "The Gold and Oil Guy"







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Markets Struggle Against Tide of Retail and Unemployment Numbers


The S&P 500 was slightly lower due to profit taking overnight as it consolidates some of Wednesday's rally. Stochastics and the RSI have turned bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 1123.34 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 1155.15 is the next upside target.

Thursday's pivot point, our line in the sand is 1142.42

First resistance is Monday's high crossing at 1147.90
Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 1155.15

First support is the 10 day moving average crossing at 1134.30
Second support is the 20 day moving average crossing at 1123.34

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The NASDAQ 100 was slightly lower overnight as it consolidates some of Wednesday's rally. Stochastics and the RSI are bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1859.63 would confirm that a short term top has been posted. If March renews this winter's rally, the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00 is the next upside target.

First resistance is Monday's high crossing at 1900.00
Second resistance is the 75% retracement level of the 2007-2008-decline on the weekly continuation chart crossing at 1947.00

First support is the 20 day moving average crossing at 1859.63
Second support is Tuesday's low crossing at 1850.00

Candlestick Formations You Need To Learn

The U.S. Dollar was higher due to short covering overnight as it consolidates some of this week's decline. Stochastics and the RSI are oversold but remain bearish signaling that additional weakness is possible near term.

If March extends the decline off December's high, the 50% retracement level of the November-December rally crossing at 76.66 is the next downside target. Closes above the 20 day moving average crossing at 77.86 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 77.56
Second resistance is the 20 day moving average crossing at 77.86

First support is Wednesday's low crossing at 76.74
Second support is the 50% retracement level of the November December rally crossing at 76.66

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Wednesday, January 13, 2010

High Range Close Gives Bulls Hope For Thursday's Open


The S&P 500 closed higher on Wednesday and the high range close sets the stage for a steady to higher opening on Thursday. However, stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1121.50 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 1155.15 is the next upside target. First resistance is Monday's high crossing at 1147.90. Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 1155.15. First support is Tuesday's low crossing at 1127.80. Second support is the 20 day moving average crossing at 1121.50.

The NASDAQ 100 closed sharply higher on Wednesday and above the 10 day moving average crossing at 1878.65 as it consolidated some of this week's decline. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought, diverging and are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1855.36 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00 is the next upside target. First resistance is Monday's high crossing at 1900.00. Second resistance is the 75% retracement level of the 2007-2008 decline crossing at 1947.00. First support is the 20 day moving average crossing at 1855.36. Second support is Tuesday's low crossing at 1850.00.

The Dow closed higher on Wednesday as it extends this winter's rally. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If the Dow extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 11249 is the next upside target. Closes below the 20 day moving average crossing at 10519 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 10687. Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 11249. First support is the 10 day moving average crossing at 10,590. Second support is the 20 day moving average crossing at 10,519.

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Bulls Struggle Against Bearish Stochastic/RSI Signals


The S&P 500 was slightly higher due to short covering overnight as it consolidates some of Tuesday's decline. Stochastics and the RSI have turned bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1121.14 are needed to confirm that a short term top has been posted.

If March extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 1155.15 is the next upside target.

Wednesday's pivot point, our line in the sand is 1137.27

First resistance is Monday's high crossing at 1147.90
Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 1155.15

First support is the 10 day moving average crossing at 1131.71
Second support is the 20 day moving average crossing at 1121.14

Double Tops and Pivot Points Explained

The NASDAQ 100 was steady to slightly higher overnight as it consolidates some of Tuesday's decline. However, stochastics and the RSI have turned bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1854.50 would confirm that a short term top has been posted.

If March renews this winter's rally, the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00 is the next upside target.

First resistance is Monday's high crossing at 1900.00
Second resistance is the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00

First support is the 20 day moving average crossing at 1854.50
Second support is Tuesday's low crossing at 1850.00

Dennis Gartman’s 22 Rules of Trading

The U.S. Dollar was lower overnight as it extends this week's decline. Stochastics and the RSI remain bearish signaling that additional weakness is possible near term. If March extends the decline off December's high, the 50% retracement level of the November-December rally crossing at 76.66 is the next downside target. Closes above the 20 day moving average crossing at 77.87 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 77.68
Second resistance is the 20 day moving average crossing at 77.87

First support is the overnight low crossing at 76.86
Second support is the 50% retracement level of the November-December rally crossing at 76.66

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Tuesday, January 12, 2010

Can The Bulls Show us Some Follow Through on Wednesday, Can They Show us the Money!


The S&P 500 closed lower due to profit taking on Tuesday as it consolidated some of this winter's rally. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1119.71 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 1155.15 is the next upside target. First resistance is Monday's high crossing at 1147.90. Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 1155.15. First support is today's low crossing at 1127.80. Second support is the 20 day moving average crossing at 1119.71.

The NASDAQ 100 closed lower due to profit taking on Tuesday and below the 10 day moving average crossing at 1876.75 signaling that a short term top has been posted. The mid range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought, diverging and are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1851.18 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00 is the next upside target. First resistance is Monday's high crossing at 1900.00. Second resistance is the 75% retracement level of the 2007-2008 decline crossing at 1947.00. First support is the 20 day moving average crossing at 1851.18. Second support is today's low crossing at 1850.00.

The Dow closed lower due to profit taking on Tuesday as concerns over tightening credit by the Chinese could delay our economic recovery. The mid range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If the Dow extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 11249 is the next upside target. Closes below the 20 day moving average crossing at 10508 are needed to confirm that a short term top has been posted. First resistance is Monday's high crossing at 10655. Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 11249. First support is the 10 day moving average crossing at 10,573. Second support is the 20 day moving average crossing at 10,508.

The U.S. Dollar closed slightly higher on Tuesday as it consolidated some of Monday's decline. The mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If March extends Monday's decline, the 50% retracement level of the November December rally crossing at 76.66 is the next downside target. Closes above last Friday's high crossing at 78.44 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 77.81. Second resistance is last Friday's high crossing at 78.44. First support is today's low crossing at 76.89. Second support is the 50% retracement level of the November-December rally crossing at 76.66.

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Alcoa Numbers Put Pressure on Market Outlook


The S&P 500 was lower due to profit taking overnight as it consolidates some of this winter's rally. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 1119.90 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 1155.15 is the next upside target.

Tuesday's pivot point, our line in the sand is 1146.25

First resistance is Monday's high crossing at 1147.90
Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 1155.15

First support is the 10 day moving average crossing at 1130.54
Second support is the 20 day moving average crossing at 1119.90

Finding the Trend in the Foreign Exchange Markets

The NASDAQ 100 was lower due to profit taking overnight as it consolidates some of this winter's rally. Stochastics and the RSI are overbought, diverging and are turning bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 1851.81 would confirm that a short term top has been posted. If March extends this winter's rally, the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00 is the next upside target.

First resistance is Monday's high crossing at 1900.00
Second resistance is the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00

First support is last Friday's low crossing at 1865.00
Second support is the 20 day moving average crossing at 1851.81

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The U.S. Dollar was higher due to short covering overnight as it consolidated some of Monday's decline. Stochastics and the RSI remain bearish signaling that additional weakness is possible near term.

If March extends the decline off December's high, the 50% retracement level of the November-December rally crossing at 76.66 is the next downside target. Closes above last Friday's high crossing at 78.43 are needed to confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 77.87
Second resistance is last Friday's high crossing at 78.43

First support is Monday's low crossing at 76.95
Second support is the 50% retracement level of the November-December rally crossing at 76.66

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Monday, January 11, 2010

Early Session Profit Taking Cools The Winter Rally


The S&P 500 closed higher on Monday as it extended this winter's rally. Profit taking tempered early session gains and the mid range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If March extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 1155.15 is the next upside target. Closes below the 20 day moving average crossing at 1118.21 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 1147.90. Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 1155.15. First support is the 10 day moving average crossing at 1129.16. Second support is the 20 day moving average crossing at 1118.21.

The NASDAQ 100 closed lower due to profit taking on Monday and the low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought, diverging but are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1847.61 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00 is the next upside target. First resistance is today's high crossing at 1900.00. Second resistance is the 75% retracement level of the 2007-2008 decline crossing at 1947.00. First support is last Friday's low crossing at 1865.00. Second support is the 20 day moving average crossing at 1847.61.

The Dow closed higher on Monday and above the upper boundary of this winter's up trending channel crossing near, 10,627. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If the Dow extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 11249 is the next upside target. Closes below the 20 day moving average crossing at 10501 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 10655. Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 11249. First support is the 10 day moving average crossing at 10,566. Second support is the 20 day moving average crossing at 10,501.

The U.S. Dollar closed sharply lower on Monday confirming last Friday's key reversal down. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If March extends today's decline, the 50% retracement level of the November-December rally crossing at 76.66 is the next downside target. Closes above last Friday's high crossing at 78.44 would confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 77.85. Second resistance is the 10 day moving average crossing at 77.89. First support is today's low crossing at 76.95. Second support is the 50% retracement level of the November- December rally crossing at 76.66.



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