Looking at the metals market I believe we’re going to be running into some major resistance soon for a couple of reasons. I share a different opinion than most that these markets are going to explode to the upside and below I’ll explain my reasons. I do believe the bull market in gold/silver will continue, just with a fairly deep correction to stir the pot and shake out any weak hands, as well as give new traders/investors a chance to get on board this bull train.

I’m not suggesting to take action at this time and position yourself on the short side as that would be foolish as these markets continue to rise. However, if you are currently very long in these metals I would watch very closely how these charts react at the resistance areas below and then react accordingly. 

1. Sentiment is very bullish in this sector. Every single analyst and contributor at Agora Financial felt that gold was going to be significantly higher next year, and while that may very well be true, a correction would go a long way for the longevity of this bull market.
2. Technically $GOLD hasn’t based long enough after this recent pullback for a major breakout to succeed and $SILVER is approaching long term resistance that should prove difficult to overcome. These markets correct fast and furious so I’m not expecting too much of a warning when/if this does occur.

Continue reading “A Correction Would Be Good For Metals” »

Somewhat of an uneventful day on Wall St with volume almost nonexistent. I kept waiting for the markets to bounce with my market timing system flashing an initial buy signal on Friday, but as I mention in the video that did not happen. I like to have a confirmation move to avoid jumping into a number of positions only to be whipsawed out of them. This can have a devastating effect on you mentally and it’s important to avoid costly mistakes that take you out of the game.

To reiterate, my timing system remains bearish, albeit cautious, as we are at an important juncture that probably won’t be resolved until next week.

I also want to remind anybody who is on the fence about the Stockcharts offer as it expires at the end of the month (which is tomorrow). This is the best deal they have ever offered and if you want to be a serious trader, this is one tool (the only tool I pay for) you need to have to do your nightly research. You can’t go wrong for about $35/month.

Here are the results from my weekly Canadian scan highlighting mining stocks that are hitting new highs and could continue to rise. These are pure momentum plays and should be traded accordingly. Stocks that have this type of look generally take off once they cross the $10/share barrier as mutual funds give them serious looks then.

I received a very unexpected preliminary change in my trading system on Friday which caused me to trim down on my shorts after the close. I’ll need to see a bullish close on Monday to confirm that change and move into the bull camp, and that may be difficult now that we’re overbought on the NYSE Advance/Decline chart below.

I wouldn’t rule out a trend change at this point as there does seem to be a very large number of bears that were convinced this market was doomed, but I need to see a little more than a one day wonder like Friday’s action. I’ll have some long suggestions tomorrow that I’m watching but right now I’m still short, but with reduced position. It’s funny because when I saw the trend change I almost convinced myself just to hold onto the trading shares I added the day before. Anytime that I find myself making excuses for any positionI immediately go place the order to do the opposite of what I was trying to convince myself to do. It almost always ends up being the smart move.

I switched themes on zentrader and I’m not completely sold but I felt it was time to make a change.  I’m still playing around with the code on this them to see if it has the functionality that I want and it’s slow going. Basically I’m warning you that you may come and it’s one theme one day and another the next.

It seems that the action in bonds over the past week tells me that they want to pause before heading off to new highs. I’m sure many out there will say that the bond bubble has burst and that they’re toast. As of right now I tend to think this is just a little blip and TLT will see much higher prices in the future. By watching the RSI levels (80-40) we’ll get a good idea if this is just a pullback by watching how the chart reacts around the 40-50 level. If it’s going to remain strong it should bounce right off those levels and it may not get that low as dip buyers will be waiting at those levels. I’ll be watching the 20 ema (blue arrow) for first signs of support and that could be the area where were bounce as well.  

The only concern that this chart has is the amount of volume on the selling days which normally indicates distribution. However, the strength this chart has shown this year has me convinced we’re going to see 08′ highs at a minimum, and potentially a real bubble with a move into the 150+ area and beyond before the ” bond bubble” pops.

I’m sure many of you will remember this song and feel nostalgia while watching the video, but did you really listen to the words back in the day? There is some great wisdom here and I thought it was worthwhile to put it up here for those to take a 2nd listen and for those who may not be familiar with it. Enjoy the weekend and don’t read too much into today’s rally at this point.

My favorite lines are:

“sometimes your ahead, sometimes your behind, the race is long and in the end, it’s only with yourself”

“don’t congratulate yourself to much, or berate yourself either . your choices are half chance, so are everybody else’s”

This should have been up hours ago but we entertained tonight and it seemed to take forever to load. There is one actionable stock idea at the very end.
Enjoy and please share with your networks!

Hey guys, it’s back up now and should be stable from here on out, however the process wasn’t that smooth. I have a lot of stuff to clean up internally so posting will be light probably through the weekend. If anything significant occurs I’ll be sure to do a blog post and I may even do a video later tonight or I’ll wait until Friday to wrap up the week.

I haven’t seen anything that’s going to stop this market from getting down to the 9600 area, at the very minimum. Momentum remains with the bears and should stay that way for awhile. I’ve taken about 2/3 of my profit and I’ll let the rest ride until we get some type of washout to the downside, churning, or a reversal on my signal.

Just to recap my signal went bearish on August 9th, so that was the last day for you guys to get short or at the very least move to the sidelines for safety. Yesterday was only 87% downside volume pressure, so the fear just isn’t in the market at all.

Update 8/27: add another distribution wk to this year. 5 accumulation — 13 distribution

Just for fun when I was looking at a weekly chart of the S&P I started counting distribution weeks to see if I could garner any new insights into how, if any, affect it may have on the markets. This week was typical August trading and I don’t have a whole lot new to report given the slow trading. 

IBD defines a accumulation day as a close higher than the previous day with rising volume.  A distribution day is a close below the previous day with rising volume. You don’t often hear people talk about distribution weeks so I started to count the acc/dis weeks to see if the could foretell that the markets would do in the home stretch of the year (Sept-Dec). 

I just checked out the past 3 years for fun, here’s what I found assuming all my data is correct. 

Continue reading “Looking at Distribution Weeks” »