Monday, September 6, 2010

Week-End Summary

Dear my readers,

Just checked my stats. It grew with 712%. Thanks for that. I need to note something: I believe that volume based TA combined with classic TA and some economics is a great tool to be on the winner side of the market, but it's not the holy grail. It's pretty sure we will win more than loose, but loss is in this business as well. So please don''t expect too much. I am not a guru.

We had a nice week, as won nice sum on our HUI and SPX trades.

As usual, let's see how did the mid-week and week-end forecast work.

I was for bullish turn. It happened with huge momentum, so my forecast vs. fact is a little different. I did not count with this huge price manifestation, so my forecast was less 15-20 points vs fact.
What is a remarkable in this progress, the break of 1100 without any issue.
Also, market could not complete the rally without making a GAP.

Classic TA:

1d Chart from last week-end summary:

Good luck!

  Midweek week 60 min estimation:

Applying basic ichimoku analysis and some TA we can easily put critical targets and stops and possible short-term bull and bear scenario.
60 min SPX scenarios for next week:

Other market indicators

Let's read short-term indicators: RSI is high, MACD on top, fast signal is on it's way to cross, stochastics in extreme highs, ULT is above signal line, ROC 20 started to signal upcoming correctino, CCI shows correction is on the way as well.. After a rally like this it's not a question. The question is correction timing and size. Before trying to answer that question, let's make our routine check on some 1-day indicators:

NYMO 13/34 cross is a magnet for smarts push large volumes in or out. Smarts usually use 1/3 of a given rally to be in with full volume. That's the safest but not the strongest part of a given rally. As you can see, it's just a question of time when a bull cross will happen.


SPA50 started to give some idea where the market goes.

Longer term scenarios:

1day classic TA gives a very good idea where are we know and where market goes in long-term:  RSI is still in a cold area. MACD has a confirmed bull cross. Stochastics has no bounce counts. Force indicator shows bull injection.VIX is extemely low, giving no space for long-term further growth of market. As it's a volatile instrument, I did not draw it's possible squiggles, only it's main trend. ROC12 is bullish, and TRIX has an imminent bullish confirmation TRIX is a slow, but reliable indicator. If it shows bull then it is here

Plenty of bull signals, with some overheated short-term status. Let's make some volume-based study in order to read what market tries to tell us, how big the correction will be and when will it come.

I am starting with my favorite giant, R3K 2 days chart:

 R3K 2-days chart tells huge volume insertion resulted long-term bull turn. Selling volume should eliminate to relative zero level and buying volume should grow with same momentum. Final bull-confirmation is at cross.

R3K 1-day chart:

1-day chart suggests confirmed bull. MVO suggests surge momentum of this surge has finished, market will have less fierce upward growth from now.

R3K60 min

MV Histogram shows no short-term bullish volume exhaution.SB oscillator shows no weakening in short-term bullish surge. Momentum indicator is still big, but shows some signals of exhaustion. Sentiment is above positive signal line. This value is in 80s, so needs 30 points of loss for a volume switch to short term bearish. 


From charts above, prognosis is to have some sideways move (next 6-12 trading hours) and a max 1-2.5% of correction (profit taking) for 8-16 trading hours or a little longer, then market will continue it's growth upward and attack AYH. Before that it must confirm this bull breaking 1130.

In case of a surprising bear case, our stops will be applied, still give some nice gain on this rally. Please observe I use no tight stop. This is a common mistake of non-pros;  tight, automatic stops and too high targets. It should be the opposite.


SPX 2-days:

 Histogram gives positive, bullish signal. SB oscillator indicates long-term bearish exhaustion. Volume lines show dramatic damage on bearish volumes, and, in parallel bull side volumes grow with same momentum, indicating safe bull turn. Volume line signals will give further confirmation at cross.Momentum turned into positive. It's also a bullish signal.

SPX 1-day:

1-day indicators show clear bullish signals on all indicators.


 R3K fakeout check is NEGATIVE.  Indicators show confirmed bull turn. For details about fakeout and it's volume-based TA check, please read my recent post. ( Please find fakeout-check chart for R3K below. SPX looks similar.


and gold-miners are in long-term confirmed bull status. Precious metals are tight in volume, manipulated and volatile, so we make our analysis on  2 and 3 days aggregated volume charts. Even most of the pros dont even try to trade PM in short term.

Please observe that 2/3 of our trade in GOLD and 1/3 is in SPX. I will buy more HUI tomorrow. We will not trade it's squiggles at all. We buy and hold tight.
Again, there is a huge volume streaming into gold and silver sector. Smarts buy precious metals. Volume study of XAU suggest a big surge in silver price change, also nice gains in gold miners, less but still surprising growth on gold prices.

HUI 2 days:

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