Personal Commentary

I have decided to discontinue this site.  There are those that feel that I am doing this to troll for customers or in some way to derive dollars from this site.  Sorry to disappoint you, I am not and was not.  I have kept the system proprietary because a lot of people paid a lot of money to learn the system and it would not be fair to them to give it away for nothing at this time or any time.   I am 77 and have enjoyed the past 25 years in retirement.  I think that I shall once again devote my time to other projects.  I hope that my posts have helped some of you and I wish you the best of luck in your trading and to your future success.

Sincerely yours,   Ira

April Gold Future (GCJ0)

Gold is currently trading at 1104.40.  There is now down side pressure being applied to gold and it has been unable to reach its first price objective at 1145.50.  Gold found support at the first price objective for the move down and tried to rally.  It has broken above the down channel and then closed below the upper line today.  Price has also hit the entry price for a very short cycle down.   The first price objective for this move should be 1088.   Price found support at 1050 on the long-term chart and that chart now has downside pressure being applied to it.   The next support level on the long-term chart would be 958.  Could this weakness in gold be the precursor for a continued rally in the U.S. Dollar?  If that is the case than The Euro could be in for more problems.

 

The Dow 30 and the S&P 500 Index (INDU & SPX)

The Dow closed up today at 10309.24 up 40.43.  There is still upside pressure being applied to price and the indicator is moving into the over extended area of the chart.  The price objective is 10343 and one would expect to find resistance there and a retracement of this move higher.  At least there should be a congestion area.   This is the first time in a long time that the dollar and the Dow went in the same direction.  Could the coupling be over for the time being?  Somehow I don’t think so.  We shall see tomorrow if one or both of them move in the same direction.  For price to start down again it would have to go through 10095 and then the first price objective for this move down would be 9873.  Which is just above the past support level for the longer term cycle retracement down at 9814.  The S&P 500 index (SPX) is in about the same condition.  Price there is reaching its first price objective at 1105.9 and the pressure is still positive.  The indicator is in the over extended are of the chart.  For price to move lower price would have to go through 1073 and then the first price objective would once again be 1046.

March U.S. Dollar Future (DXH0) 02-16-10

There has finally been some retracement of the dollar rally.  The dollar was down 0.73 and closed at 79.71.  The first price objective for this move down is 79.06.  The 60 min chart shows that price stopped at the target price for the move down on that chart.  There  should be temporary support at this level before the move down continues.  There is still downside pressure on the daily chart and upside pressure on the 60 min. chart.  The price action in the night session could cure the condition on the 60 min. chart.  The Dollar and the indexes are still locked.  As the dollar went down the indexes rose.  If there is more bad news from the Euro zone there could once again be a flight to safety in the reserve currency.  There is one thing that doesn’t bode well if you are looking for a major down move in the dollar.  with all the downside pressure being applied to price the dollar has held up fairly well.  There is still the cycle low at 02-25-10 that is before us.   For price to restart a move higher price would have to go through 79.78 and the target price for that move would be 80.15 with the first price objective at 79.90.  The longer term up move has not been voided at this time so the target price at 81.22 is still in play.

Some Fundamentals on the Drug Stocks

I don’t have the valuation model for LLY, but I thought that it might be interesting for you to see the value models for the other drug stocks I posted on earlier this week-end.  There could be various reasons that the drug stocks are acting a little better than some of the other stocks.  the health care debates have affected their overall performance, but valuation and dividend yield might be another factor  in their individual performance.  A look at the X dividend dates might also offer some insight as to price action.

Valuation models courtesy of  www.powerinvestor.com

March Corn Future (CH0) 02-14-10

I put up a daily chart on corn earlier in the week and thought that now would be a good time to put up a more complete analysis as there seemed to be some interest expressed in this futures contract.  One question I always ask myself when trading is, “why did price stop Here?”.  It reversed just before a price objective that has an 80% probability of being correct.  Upon a further look I find that it did follow the probability, but on a different chart for a different time frame.  I can find no logical reason for this happening, but it has proven to be a truism for me through my trading career.  This is one of the reasons that I use multiple time frames to trade.  Now to corn.

The monthly chart shows that price has gone through the entry price at 3315 and the first price objective for the move down on this chart is 2130.  There is currently downside pressure being shown on the chart.  For price to enter a major move higher it would have to go through 4375 and then the first price objective for this move higher would be 5795.   For the long-term look the cycles indicate and intermediate low at the end of July 2011 and another major low 5-31 2013.  Whether those lows will be at $1 or $15 can not be told at this time.  I don’t know how accurate this will be in the future, but it was right on the numbers for 4/30/2002, 1/31/2006 and 9/30/2009. 

The weekly chart shows that the first price objective for the retracement down at 3502 acted as temporary support for price.  There is currently upside pressure on this chart.  For price to start a move higher it will have to go through the entry price at 3782 and then the first price objective for the move up would be 4093.  The one that bodes well for the move higher is that with all the downside pressure applied to price on its retracement down that price didn’t even come close to the previous low.  Cycles indicate that the next low on this chart should occur around 5/14/2010. 

The upside price movement on the daily chart met resistance at the first price objective 3652.  There is still upside pressure being applied to this chart. but the indicator is trying to roll over and turn down.  We now know why price stopped above the first price objective for the move down at 3423.  It stopped at a price objective on a higher time frame.  Now we know why price stopped on the way up and why found support on the way down.  The lower time frame charts, not shown, show resistance at 3664 and support at 3551.  For price to start a move lower it would have to go through 3606 and then 3555 should act as temporary support.

I hope that this gives you a little better insight as to how I look at things.

March Future U.S. Dollar Index (DXH0) 02-13-10

Everything denominated in dollars is affected by how the value of the dollar changes.  The dollar rises and exports become more expensive for foreign countries to buy.  Large US companies that have large overseas income streams are negatively affected.  Right now the stock indexes are coupled with the dollar.  If the dollar rises the indexes fall, gold falls as do the other commodities denominated in dollars.  If interest rates rise the dollar becomes more valuable.  The financial condition of the PIIG (Portugal, Ireland, Italy and Greece) with their debt and weak economies has created a flight to the dollar as the dollar remains the reserve currency for the world.  Another shoe has dropped with what is happening in Singapore as noted in an earlier post today.  The charts seem to confirm dollar strength.  The question remains if the dollar can continue its rise.  Time to check the chart.

The DXH0 closed at 80.40 up on the day.  Price is oscillating around the second price objective for the move up.  For price to start a retracement down it would have to go through 79.94 and then the first price objective would be 79.05.  There is currently downside pressure being applied to price and price doesn’t want to go down.  The lower time frames show support at target prices on either side of 80. 

 

The S&P 500 Index (SPX) 02-13-10

The SPX closed Friday at 1075.51 down on the day.  There is still upside pressure being applied to price, but price can’t seem to get a foothold to move higher.  It has gone through the entry price for the move up that has its first price objective at 1105.90.  Price found support at the first price objective for the move down at 1046.  The lower time frame charts have price objectives and targets in the 1085 area with the highest target at 1094.  All below the 1105 level.  All three time frames that I looked have upside pressure being applied to price so if you are short right here be careful.  It doesn’t seem that price wants to move much higher, but time and some announcement will tell.

 

Drug Stocks 2-13-10

Well Point (WLP) announced that it was going to raise fees in California by 39%.  This created an outrage in California as well as in various governmental agencies.  This might be the catalyst that gets a health care bill through congress.  It might not be the weighty bill that is now there with its 3900 pages of rules, regulations, perks and pork.  It is up in the air as to whether other health insurers will follow WLP after the furor abates.   A look at the drug stocks may give a hint as to what is in store for us.  They rallied on the news that the current bill was stalled and it looked like it would not pass.  Now there is a question whether some type of bill will pass as a first stage to a complete health care package.

The S&P Pharma Spyder (XPH) closed up on Friday at 38.59.  It has been rising for the past 5 days and yet hasn’t been able to take out the previous high.  There has been upside pressure the entire move so there has to be some substantial longer term pressure keeping price from moving with a greater range.  The pressure indicator is still up and entering the over extended area of the chart.  Price reached the target price for the short cycle move down but did reach the first price objective for the longer cycle move at 36.60.  For price to start a move higher it would have to go through 38.87 and then the first price objective would be 40.57 Noted with the green lines.  The longer term price objective at 40.17 could act as resistance before reaching the 40.57 level.  For price to restart its move down price would have to go through 37.80 and then the first price objective would be 37.00.  These were not shown on the chart for reasons of clarity.

Abbott Labs closed Friday at 53.93 up on the day.  There were two factors that halted the upward movement of ABT.  The first is that it hit the second price objective for the move higher and the second was that it also hit the top of the channel.  Price found support at the first price objective for the small cycle move down at 52.87.  There is currently upside pressure being applied to price. For price to restart a move higher it would have to go through 56.21 based upon the current low.

Eli Lilly closed down on the day yet at the top of its daily range.  There is currently downside pressure being applied to price and the indicator is in the over extended area of the chart.  Price found temporary support just above the first price objective of 33.39.   For Price to restart and up it would ahve to go through 35.04 and then the first price objective for the move up would be 36.44.  There was a slight gap down on Friday that might get closed on Tuesday.

Pfizer (PFE) Closed down on the day.  Price is currently trapped between the second price objective for the move down and the target price for the move at 17.48. It has also broken through the lower channel line.  The is upside pressure being applied to price and there is divergence at the low.  The lows have been marching along target price for an intraday chart.  There are shorter cycles that project price to 17.96 and then 18.04.  For a major move higher to occur price would have to go through 18.67 and then the first price objective would be 19.74. 

Merck (MRK) closed up slightly on Friday at 36.92.  Price found support at the target for the short cycle move down.   Price remains in the up channel which is not shown on this chart.  There is upside pressure being applied to price and there is divergence at the low.  Price would have to go through 38.57 before a move of any substance could occur.  Then the first price objective would be 41.38. 

All the drug stocks that I follow have found support.  They all have upside pressure being applied with the exception of LLY.  The drug stocks should rally, but from the range of current price moves higher it doesn’t seem that this rally will go very far.

Comments from another source 02-12-10

February 12, 2010 Model Update

All models are currently in cash or money markets.  We went down
last week and had a little recovery rally in the middle of the
week.  Watch your moving averages.  The 100-day is now going
slightly negative (watch the numbers on the left as you move the
cursor across the line).  The 200-day is still slightly positive.

We are going to wait to see what happens with Greece and the
PIIGs (Portugal, Ireland, Italy and Greece).  One area that most
people do not realize that is a problem is Singapore. Singapore
has more debt than Greece as a percentage.  Singapore is the
banking capital of Asia and most people thought the city-state
was more prudent than the rest of the world.  Singapore could
drag all of Asia down except China.

As far as Greece, the German public does not want to bail out
the government union workers and citizens of Greece. The Greeks
and unions in Greece are telling the bankers of Western Europe
that you better bail us out or else. 

The situation in the United States is not much better with many
states that are insolvent plus soaring unemployment.  The recent
Treasury auction did not go well and it appears the government
may have bought a lot of the debt.  An out of control government
spending money like crazy means less money or capital for
businesses.  You are not going to have earnings growth in this
environment.   

Please check the web site and the members area this weekend for
more updates on the EWS and the global market situation.  We
should have a new report up there on late Saturday.  We have run
the EWS ETFs for last night and more inverse or short ETFs are
creeping onto or lists which is bearish.  We will run some
simulations tonight on the summer and early fall of 2008.  Based
on our notes from that period, the data looks pretty similar to
2008 before things moved downward.

More than a few gurus have said that 2010 is looking a lot like
1933. In 1929 there was the market crash then a partial recovery
then the next leg down.  We are concerned as well.  The one
possible positive difference versus 1933 is the public is mad
this time and ready to “throw the bums out.”  The problem is the
bums are spending money so rapidly that we may not throw them out
fast enough.

Courtesy of www.powerinvestor.com