Weekend Update: Loads of interesting charts

Financials confirmed a sell/short signal on Friday closing below XLF $ and it joins the SPX, Nasdaq and Real Estate on equity short/sell confirmed signals.  The Dow, Energy and Russell remain on long/buy signals.  Precious metals and miners remain on long/buy signals and corn and wheat remain on sell/short signals.

Next I want to show a few monthly charts that I believe show the possibility of very long, sustained bull market for the underlying instrument.

First is FCX.  The Portfolio was stopped out after a nice gain, but should it either retrace its move up or break above $6.33 (see red/green indicator above on the FCX daily chart), then I’ll re-enter FCX.  It’s indicators on this longer time frame have yet to signal a buy, but we are beginning to see positive divergence. On long term charts like this, the buy confirmation comes a bit after the actual trend change.fcx monthlyNext is gold, but the same holds for silver (collectively precious metals).  Gold has begun to show confirmation of its long term trend change even on this monthly chart.  But, even with this confirmation, Gold is only on the front end of what should be a very long rally.gold monthlyNext is POT. I’ve been patiently waiting for it to test the $10.59 pivot.  Like FCX it seems to be putting in a very large double bottom.  Unlike FCX, POT has not made a slightly lower low, which I would prefer to see.  I’m keeping a close eye on POT for swing entry.  The agriculture sector has been beaten up terribly and like CORN and WEAT, I’m looking for a meaningful swing trade. pot monthlyAnd finally, the SPX monthly chart.  I posted it back in the spring and noted that the bear cross signaled a significant swing trade for the bears.   Now the question is whether we’ve witness a primary wave [4] sell off and now we should the key indicators trend back toward over bought levels, or have we seen the top of primary wave [5] and Cycle 1 and a much longer term correction is still underway.  I’ve highlighted the key indicators that overwhelming still favor the bearish case.  However, there are two indicators that present some hope for the bulls.  The 2nd indicator from the top has yet to break down from its over bought level.  It is typically the last straw and is a follower; but, as you look back in time you will see there were several times that the other indicators broke down, but it remained over bought and proved to be correct over the longer term.  And the last indicator before the SPX price chart shows the building of positive divergence vs. price.  spx monthlyThe 30 min chart for the SPX highlights two immediate term possibilities: a bullish inverse head and shoulders that measures roughly 150 points and a bearish head and shoulders that measures about 90 points. Both necklines remain in tact, but the bullish case cannot afford another red day.spx 30

The following three charts I believe make a case for at least an immediate term bounce for the SPX.  First is the NYMO weekly chart.  It displays both positive divergence by its key indicator above the price as well as positive divergence of the NYMO weekly vs. the SPX.  Both of these have historically pointed to at least an immediate term bounce.nymo weeklyThe NYSI and NASI weekly charts are next.  Neither of these indicators have approached the levels reach in 2008/09.  Both the NYSI and NASI weekly charts show the signals for an immediate term  bottom.  All three indicators have turned up from over sold areas and they have printed white candles after reaching at least -450 for the NYSI and -650 for the NASI.

NYSE Summation Index:nysi weeklyNasdaq Summation Index:nasi weeklyEverything shown above can be used to support either the bullish count or the ultra bearish alternative count.  There is also a third option that both of these two counts are looking for one more push down to complete the leg assumed complete as labeled below (see head and shoulders on 30 min SPX chart above).  However, based upon the charts I’ve shown above, I favor an immediate term bounce for the SPX.  I’m looking for a move to approach SPX 2000 regardless of whether the SPX moves on to new highs or rolls over and sees the bottom fall out.spx dailyThe ultra bearish count below is looking for the completion of intermediate wave (2) of primary wave [C].  There is the chance that intermediate wave (1) still needs one more push down to complete.spx daily count

About alphahorn

I received an MBA from Columbia University’s Graduate School of Business in New York and am a Wall Street veteran. I’ve worked for a number of investment banks including Smith Barney and First Boston/C S First Boston in New York. Over the years, I have developed my own Proprietary Swing System and I combine that System with my own Elliott Wave Analysis to trade.
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