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Title: Public Chart Lists - StockCharts.com
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!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Daily Candlestick S&P 500 Larg
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In addition to that, prices broke the down trend from two failed recovery rallies in October and November, while simultaneously catapulted above overhead resistance, which was the upper boundary of an Ascending triangle price pattern on the SPX daily chart.
I have listened to a lot of technical traders in the past two weeks and most of them have salted there verbiage with bearish overtones. Despite, a barrage of pessimism among invertors and traders, I have continued to remain bullish on this market. The reversal signal came on November 21, when we saw a bullish engulfing reversal transpire on the daily charts. That pattern got a follow through as prices rocked higher. From there, prices pulled back forming the right shoulder of an inverse head and shoulders pattern manifested on the hourly charts. The successful backtest of the broken intermediate trendline on the daily charts, served as support while prices moved in a lateral range forming various triangle patterns. Those triangles (continuation patterns) broke out on Friday.
We believe that the rally will carry prices to key resistance on daily charts. Take a look at the 60-minute charts of the DJIA, S&P 500, and the QQQQ below, and you will notice how the upper boundary of the minor trend channels in that timeframe intersect with horizontal resistance from the November 4 minor highs (election day in the US). The upper channel is rising resistance, which is pointing straight at horizontal resistance. That means that the 1007 level on SPX and the 9650 level on the DJIA will eventually ram right into a double dose of resistance. I suspect that this will occur just prior to the 4Q GDP being announce in January. I am betting that price running into resistance, while having to digest terrible economic data, will be too much for the market to bare and extinguish the rally.
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!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Daily Candlesticks PowerShares (Q
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In late January and February, I anticipate that the ride will end, as the market takes a detour, driving right into the back roads of a desolate area, on very bumpy road, with plenty of pot holes. I'm looking for more wild swings for multiple right shoulders to form on the daily charts. Then I expect the complex inverse head and shoulders pattern to be completed come March, and subsequently breakout.
Could I be wrong? Of course. If the technical picture changes I will be forced to reevaluate my analysis. But so far, this analysis has been spot on, and I won't abandon it unless my indicators say otherwise.
Two More Bullish Signs
The ADX has been a very valuable indicator to us in 2008. It forewarned of the September sell off in late August, by producing a bearish cross on the DI lines as the ADX began to rise. The Aroon confirmed the ADX indicator by flashing a sell signal on September 4 and the MACD on September 3. This past Friday marks the first time we have see a bullish cross of the DI lines on the index daily charts since late August. I believe after this initial run up, that the DI lines will begin to weave back and forth, while the right shoulders are being constructed. Once completed, I think prices will move higher as the positive DI line soars. Right now the ADX line (black line) is still falling, suggesting prices will rise as volatility declines, but no long term trend will be validated until the ADX line bottoms and begins to make its way back up and then rises above 20. Therefore, I submit shall not occur until after the right shoulders are complete.
The weekly histogram on the indices have moved above the zero line this week. That means that momentum has shifted in favor of the bulls. Next to a divergence, I think this is the most important signal in technical analysis. This histogram's push above zero allowed the MACD to get a bullish cross on the weekly charts, and we also saw a bottom failure swing on the RSI of the DJIA this past week.
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!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! a Daily S&P 500 Large Ca
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The S&P 500 got a bottom the prior week.
60-Minute Targets
If the triangles on the hourly charts play out they should take us up to the key resistance zones I previously mentioned. The S&P 500 triangle measures 103 points (918 - 815 = 103). By adding that on to the pivot point of 918 we get a target of 1021 (918 + 103 =1027). So there is the possibility that prices may slight overshoot resistance. But had you bought at support near the 857 level, and chose to hold to resistance at 1007, you will make a 17.5 % return. Lets do the math, 857 X 17.5 % =150 points + 857 =1007. Those of us that bought the right shoulder near the 815 level will see a rise of 23.5 % if prices rise back up to resistance at 1007. And those dare devils that bought the the bullish engulfing pattern will come closer to a 28 to 30 % return.
If you bought into the triangle on SSO (proshares ultra S&P 500 (page 4) near the lower portion of the triangle you may wind up with a 35 % gain. Remember SSO moves 200 % in whichever direction the S&P 500 swings. Buying the triangle in the mid 23 range on SSO, could allow prices to be carried up to 31.73 or even higher if the S&P 500 overshoots it?s target. Those of us who are already playing the ultra proshares DDM, SSO, QLD, UWM, since the right shoulders might produce a 40 or 47 % gain. Not bad if my scenario plays out, but I must remind you I am speculating that prices will move to key resistance. Think about that for a moment. We bought the right shoulder in December and anticipate holding until January 23 or so. That means a massive gain could be potentially realized in less than two months.
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!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 60-Min PowerShares QQQ Trust (QQQQ)
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If you failed to buy the right shoulders on the hourly charts, and blew off the triangle, you may get another chance for an entry point. Because the triangles may backtest to support on the 15-min charts at 918 on the S&P 500 and 30.50 on the QQQQ. The 15-minute charts are over-extended and poised for a throw back to support. This is a bear market rally and so we can expect huge ruturns until sanity comes back to the market.
I have been talking about crude oil last two weeks. And if you played the double long crude oil ETF (DXO) with us this past week, so say a 55 % gain in just one week. Crude Oil rose by 23 % and USO put in a fine 22.50 % this past week. Crude oil broke it's declining trendline on December 31 and you can see all the crude oil charts on page 8 and 9. We played the 15 minute chart on DXO and USO last week that had a inverted head and shoulders pattern on it (see page 8 for that DXO chart) The S&P 500 was up 6.76 % this week, so I think you can imagine that I?m just ecstatic about this weeks returns.
Lastly, I have added the 60-minute charts of the ultra proshares along side of the daily charts on page 4. Study them and the hourly charts on page 1. It will help you visalize my speculative price targets and scenario for the future.
There is a detailed brand new video at thechartpatterntrader.com that explains our thoughts. It will be posted momentarily.
The best of trades this new year.
Maurice
thechartpatterntrader.com
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 60-minute S&P 500 Large Cap Index ($SPX)
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 60-min Dow Jones Industrial Average ($INDU)
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! weekly S&P 500 Large Cap Index ($SP
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We already have the first leg down of a recessionary quarter with 3 Q GDP being finalizied at - 0.5. It takes two consecutive negative quarters of GDP to officially put us in a recession. And with what took place this past September in the credit markets, there is no doubt we are in one. A skeptic present with the evidence, will change his mind if he is rational. The locking of the credit markets and the amount of the lost jobs at that time, is what did it for me. You may recall it was in September that we started seeing the massive job losses that accompany a recession.
The 60-minute charts have formed a minor rising trend channel, which should allow prices to break out of the triangle patterns in that same timeframe. The 918 level on the S&P 500 needs to be taken out. And I believe that it will be. The triangle patterns continuation patterns that more or less move in a lateral range. These triangles are very long handles that have formed after the breakouts of the inverse head and shoulders patterns on the hourly charts. I thought the handles would be much shorter, but the market is building a strong base of support by forming these extended handles in the form of triangles.
The 15-minute charts broke two levels of overhead resistance putting to rest the descending triangles that formed in that time. The S&P 500 broke the second level of resistance today and then backtested. Prices then plowed higher after bouncing of that springboard of support. Study the 15-min charts on page 1. The key level of support which was successfully test again 857, is important because 851 is where prices backtested the broken trendline on the daily chart.
Lastly, the S&P 500 daily chart needs to move above 900 in order to break the downtrend from the attempted rallies in October. If that occurs, then overhead resistance at 918 will be the next barrier. That 918 level is the upper boundary of our ascending triangle pattern on the hourly chart.
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!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Weekly Dow Jones Industrial Aver
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I continue to remain bullish. However, the 10/20 d EMAs still haven't recovered on the daily charts. But if the MACD breaks above the zero line, they should follow suit. Moving averages are lagging indicators. But prices did close back above the 20-d SMAs on all the averages. Currently they are finding resistance at the 50-d SMAs.
I didn't play the recent 15-minute price swings, opting to enjoy Christmas shopping and the season instead. But I did hold my positions during that time. we continue to see the S&P 500 put in higher lows in spite of the continuation pattern on the hourly chart. Despite the moving averages that are drifting sideways prices seem unphased.
We even got more bad economic data today as consumer confidence dropped to an all-time low and some dismal housing news, and yet the market continues to shrug of bad news.
I remain long on the ultra proshares DDM, SSO, QLD, and the ultra russel fund (UWM). Additionally, I am long oil again via USO and DXO. The proshares are on page 4 and 5. I added the hourly charts of DDM, QLD, UWM on page 4. The energy charts are on page 7 and 8.
New video at thechartpatterntrader.com
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 15-min PowerShares QQQ Trust (QQQQ)
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 15-min Dow Jones Industrial Aver
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Mr. Kevin B. Bantz Chief Investment Officer Havasu Hedge Funds 3039 Starline Drive Lake Havasu City, AZ 86403
iChatAV(AIM): mrkevinbantz Yahoo! Messenger: mrkbantz Skype: kevinbantz
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