Market Bias

Wednesday November 11, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Bearish Tweezer Top
P&F Pattern: Bullish Ascending Triple Top Breakout
S&P 500 Resistance: 2140 2130 2110 Support: 2060 2000
Bearish Full Moon

A special Thank You to all that have served proudly this Veterans Day.

Life Goes On

While the news writers continue to tell tales and the doomsayers predict doom, life goes on. Things are never as bad as they seem.

Alibaba (BABA) said that sales on China's “Singles Day” doubled what they were last year and did so in half the time. We keep hearing all about the bad China data, but realistically I doubt the data means much. China has a huge emerging middle class and they are transitioning to a more consumer based economy, if consumer sales are strong, all other metrics are valueless. Sales drives manufacturing, as well as the rest of an economy. Low inflation and full employment will drive growth for years, perhaps decades, any bad data along the way is just blips in a much longer, larger picture.

Apple (AAPL) began selling music downloads to android users Today, potentially a huge profit source, sales of the new iPad Pro also began Today. While Credit Suisse downgraded the electronics Goliath on channel checks of reduced iPhone parts orders, I am of the belief that reductions in deliveries of parts is more manufacturing adjustment rather than a sign of weakness, We heard this story before and somehow Apple profits always seem to keep improving, the sum of its parts being way more important than any single product supply line. Apple keeps adding new revenue sources such as apple pay, and Android music service, new products such as the apple watch and iPad Pro, This is a great company with a bright long term future. Any short term issue uncovered by an analyst is probably just some sour grapes. History usually ages those grapes into fine wine.

If the economy is so weak we would most certainly not be talking about a Fed rate hike next month, they must be seeing something that we don't. Perhaps we can get a glimpse simply by looking no further than at Berkshire Hathaway (BRK-A) everyone knows this company as Warren Buffets giant Conglomerate, they just posted record profits. Let me say that again in a different way. Berkshire Hathaway just announced that they made more money than in any other quarter in their history. Weak economy? Bah Humbug.

Companies like McDonald's (MCD) and General Electric (GE) are printing new highs almost every day, buyouts and mergers are common and tell us that companies think that other companies are a bargain here. New industries are asserting themselves as we see money rotating out of older dying industries and moving into newer younger ones, such as coal money moving into solar. Money is being invested in innovation albeit slowly. Companies like Alphabet (GOOG, GOOGL) and Apple (APPL) are growing and developing new technology. The fact that companies like Tesla (TSLA) and Solar City (SCTY) even exist Today is testament of our economy shoring up for future growth. Things are not as bad as the pundits would have you believe. We are still only half way through the recovery cycle and there is a boom time down the road still to come.

Next Chart Class Thursday at 4 PM EST – Japanese Candles Part 2

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Wednesday November 4, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Mat Hold Continuation
P&F Pattern: Bullish Ascending Triple Top Breakout
S&P 500 Resistance: 2140 2130 2110 Support: 2100 2060 2000
Bearish Full Moon

Statistics vs Damn Lies

As we pull closer to a new all time high once more the bears and bubble busters fill the news feeds with impending doom. If the market was overvalued in August, it is just as overvalued now. Tech bubble? Housing bubble? Earnings bubble? Slowing economy? Bad China data, Impending European stock collapse, QE bubble, Fed bubble, Dollar collapse. We have heard it all before, we will hear it all again. Fear, loathing, and manipulation by idiots raging in full fury against the machine, the masses, and the common wisdom. Market machination mumbo jumbo. Is anyone besides me just sick and tired of the baloney? How and why is this nonsense even allowed or possible? Because people and individual traders allow themselves to be duped by sharks who pretend to know better., or as a result of good plain old ignorance. I am never shocked at what people do not know, in Essence we is dumb. Insert joke about history and something or other doomed to repeat it here.

When the correction began back in August I posted articles and explained that the last few corrections only lasted about five or six weeks and to watch the end of September into the beginning of October for the sell off to reverse. That happened pretty much on October first. I knew it and was able to predict it with success not because I am smarter than anyone else, no, the reason was because I looked up what happened last time and the time before that. I posted the charts and showed it around. As with all things stock market look for repeatable patterns. The market is actually a lot more predictable than you think.

Another example is the Best Six Month Strategy posts, I even gave everyone an updated list of exactly what sectors and industries participate in this seasonal occurrence. One Month ago I generated a watch list consisting of the twenty three ETFs that comprise this strategy. At my nightly “Rants” I taught everyone exactly what type of chart to use to determine buy signals. Starting back in September I went through all of them and explained how all twenty three groups were still on sell signals and to watch them like a hawk. As of right now 20 of the 23 are up for the month or roughly 87% of them worked. As of a Month ago zero were above their 50 day moving average, or in favor, as of Today 21 of 23 are now above their 50 DMA and are on buy signals, that's over 90% accuracy.

Historically, over the last twenty years the S&P 500 has been up 75% of the time in November and 74% of the time in December, This has many names, we hear these rallies described as the “Turkey Run” or “Turkey Rally” during Thanksgiving week. The week running up to Christmas and beyond is called the “Santa Clause” Rally. Collectively the October through the end of December is called the “End of Year” Rally. These all occur with over 75% regularity, and while there is always the possibility of an outlying year, or off year, the odds are still in your favor. The stock market is a game of money that is risk managed with statistics and probabilities. The simple trick is to manage your positions against a specific support and to make trades where the odds are in your favor. Think of it like counting cards at a blackjack table and when the card count is in your favor, you increase the bets.

The best time statistically to buy stocks is when their charts are in Accumulation phase or Bullish Phase and when the overall market is also in one of those phases as overall market direction accounts for over 50% of any individual stocks move. When the price per share is above it's 50 DMA and the 20 DMA is also, yet both are below a long dated moving average like a 100, 120, 150 or 200 DMA that is an accumulation phase, when the price per share breaks out above all of those moving averages that is called bullish phase. As long as an individual stocks CCI is still below 2000 and RSI is below 70 the probability of additional upside is good. So you can believe all of the Captain Bubbles and Yogi Bears, or you can believe the statistics and damn statistics, LOL.
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Monday October 19, 2015 by Big W
Market Phase: Recovery, Market Bias: Bearish
Last Candle Pattern: Bullish One White Soldier
P&F Pattern: Bullish Ascending Triple Top Breakout
S&P 500 Resistance: 2140 2110 2060 Support: 1990 1960
Bullish New Moon

Still Better Than 1987

Since Today is the anniversary of the 1987 market crash known as Black Monday where the market crashed over 20% in about twenty minutes I cant say that Today has a Bullish bias. However if we survive Today with a minimal amount of damage, then Tomorrow should be bullish. Statistically this week is good to go shopping for depressed stocks especially technology stocks and small caps.

Morgan Stanley (MS) missed expectations on their earnings by more than .20 on a .63 cent basis, bond trading revenue was to blame. Or maybe they just screwed up, after all not everyone can be as good as Goldman Sachs (GS) and only miss by a penny. Meanwhile Hasbro (HAS) beat by .06, Haliburton (HAL) beat by .04, Valeant Pharmaceuticals (VRX) beat by .06, in all thirty five companies either met or beat expectations and twenty eight missed. That would be a 55% beat rate not awesome sauce, but hardly horrible.

China GDP came in 0.1% lower than advertised at 6.9% down from last Months 7%, This is the first time in years their GDP came in below 7%, so naturally the bears are all out on parade with mantras of “I told you so” and “we are doomed”. While I don't subscribe to this thinking, the data will certainly affect Today's tape. Might I suggest possibly buying into the weakness.

Commodities are getting railed This morning on the weak China data, Oil, Gasoline, and Copper are down over 2% along with precious metals and Grains. The US Dollar is gaining some here coming off that 94 low.

Being twelve business days away from another Debt Ceiling disaster by the House Republicans doesn't help, and still no Highway Trust bill either. These non actions create uncertainty within the markets. The Fed however is beginning to look smart in light of recent economic news.

Asia and Europe trade was mixed as the US markets opened down this Morning. In other news Greece is doing much better, LOL

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Thursday September 17, 2015 by Big W
Market Phase: Bearish, Market Bias: Bullish
Last Candle Pattern: Bullish Three Inside Up
P&F Pattern: Bullish Double Top Breakout
S&P 500 Resistance: 2036 2000 Support: 1900 1860
Bullish New Moon

Feddy, Feddy, Bang Bang?

Today we will hear from the Fed as to what they have decided to do raise the rate or leave it alone. I thought that it would be interesting to compare Today to previous Fed rate hikes. Let's compare 1994 and 2004 to Today;

Unemployment was at 6.6% in 1994 and 5.6% in 2004, Today it is at 5.1% so this is not really the issue.

The Labor participation rate was at 66.6% and 66.16% vs 62.6% Today, so labor participation was much higher the last two raises.

Earnings Growth was at 2.8% and 2.0% vs the current 1.9% so it was stronger the last two times.

Inflation was at 2.1% and 2.8% vs 0.3% now, so not there yet. Very weak and Yesterday we posed a negative -0.1%

Core inflation was 2.27% and 2.02% vs 1.24% Today, we should be more concerned about de-flation.

US exports as a share of GDP was 9.6% and 9.5% vs 12.7% now. No issue.

IMF Global growth was 3.34% and 5.38% vs 3.45% Today. Meh.

GDP growth was 3.4% in ’94 and 4.2% in ’04, Current GDP is at 2.7% significantly lower, and here is the biggest problem.

While employment is trending well, you can see that many of the other measures are not strong enough. The question is do we really want to risk going back into a recession over this? That's exactly what happened when the Bank of England raised their rate too soon, and they immediately plunged back into recession. Then they had to cut rates back again. We know what will happen because we have data that goes back decades and we have data from other countries central banks. So why don't we learn from history, because we choose to ignore it.

In my opinion the Fed has not met the criteria based on their dual mandate to do anything. What do you think? We will get the next installment of “As The Fed Churns” at 2PM Today, stay tuned.

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Monday September 14, 2015 by Big W
Market Phase: Bearish, Market Bias: Bearish
Last Candle Pattern: Bearish Dark Cloud Cover
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2036 2000 Support: 1900 1860
Bullish New Moon

Slim Pickings and Ugly Charts

The Chinese economy still has the doldrums, weak industrial output data and possible lower GDP is weighing on global indices. Oil is selling off, Gold is weak, and everyone is just so sad. Any and all rallies should be sold until further notice.

The SPX is in a true bearish alignment and we are within about 18 points of the 20 day moving average resistance, Friday the SPX stopped dead on the 13 EMA as well. I would be very surprised to see any substantial rally here, hell, I would be surprised if we had an up day at all.

Some traders have pointed out that the SPX is in a pennant or wedge formation and have asked me isn't that bullish? Normally it would be, however since it formed following a leg down from 2100 to 1870, I would classify it as a “Bear Flag” or 'Bear Pennant” and expect it to break down. Also I would think that a retest of support is required to firm a bottom.

Congress is supposedly working on a kick the can down the road budget bill to avoid a government shutdown. I am dubious of success. There is a fairly large group of about thirty congressmen that seem hell bent to shut down the government no matter what the leadership wants. Who knows what they can or will actually do. It never ceases to amaze me how these lazy bums can ignore things till the eleventh hour then run from crisis to crisis. They should all be beaten with a cat-o-nine tails then fired.

Lastly we have the Fed meeting this week with a statement on Thursday, the news feeds are getting creative, one headline read “Fedmagedden” It made me laugh. The world will not end no matter what the Fed does. Come to think of it the world will not end no matter how bad the news is out of China.

We need a final dip and the perma-bears to have a big parade, that will be a sign that the correction is coming to an end. When the news organizations dust off the doom sayers and dimwit curmudgeons, and trot them out as market experts, that would likely be a good time to begin the stock accumulation process. I don't think we are there yet, but soon, perhaps the end of the Month.

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Friday September 11, 2015 by Big W
Market Phase: Bearish, Market Bias: Bearish
Last Candle Pattern: Bearish Dark Cloud Cover
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2036 2000 Support: 1900 1860
Bearish Full Moon (Last day)

Peace To All On this Tragic Anniversary...

US economic news out this week told us some things, first that US Consumers are borrowing more as credit spending increased to over $19 Billion, that's less than last month but shows an ever increasing trend. Since 70% of our economy is consumer based this is good short term, but one cant help but wonder how are they going to pay that debt back with wages so weak?

The Jolts report shows that there are 5.75 million jobs available in the US , that is the highest amount in over six years, so why aren't companies hiring to fill those positions? My guess is that the wages or salaries are too low and people are simply not willing to change jobs or take those offered slots for peanuts. Unemployment claims ticked downward again meaning that the overall jobs market is still improving, just very slowly.

Both import and export prices dropped and producer prices (PPI) remained unchanged at 0% movement. We have no deflation yet, and no inflation as well. This may be a deciding factor for the Fed rate raise to be pushed off down the road to December or till next year. Raising the rate into a 0% environment may force us into deflation, not a desired effect.

The US Dollar is stuck here and has failed multiple times to get above its 50 day moving average, this may help some commodities. Copper is breaking out above its 50 DMA in response. However oil has remained below its 50 DMA and Goldman Sachs just lowered their target, inferring that a  $20 level was possible. Bah, we may see WTI Oil fall below that $44 support level Today. With inventory builds in Natgas and Oil we may actually see the Brent-WTI oil spread fall to parity once again.

Economists are chattering about all varieties of Japanese and Chinese stimulus. Adding more of this and tweaking some of that, mostly banking voodoo tricks. Honestly it looks more and more like they are scratching their heads and butts about what to do. Maybe I am old school, but it seems to me if you are going to stimulate, then stimulate, put actual money to work rather than playing around with bankster trickery. It never seems to do what they expect it to and the unintended consequences always bite back like karma in all of its marvelous glory.

Economic news out of Europe seems to be a little better and better lately, last week we heard that Greece actually had positive GDP, Germany last week out performed on exports, including cars. Today we hear that Italy caught a jump in industrial output of 1.1% perhaps the Euro zone is finally in recovery now. We can always hope.

I do not expect good things from the US markets Today, even if we bounce some, beware the invisible force field that surrounds the SPX 20 DMA ass that will most certainly be resistance. Since it is Friday I expect profit takers and selling because nobody want to hold over the weekend any more. We should see money move into penny stocks

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Thursday September 10, 2015 by Big W
Market Phase: Bearish, Market Bias: Bearish
Last Candle Pattern: Bearish Dark Cloud Cover
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2036 2000 Support: 1900 1860
Bearish Full Moon

Logicly Ugly

I am not sure what to write, or what to tell you. The market is what it is. Many traders have said to me that they are sick and tired of this market, and they are losing patience and are just sitting it out. They don't see any reason to buy anything and are just disgusted. I don't disagree with them. I might remind you that cash is a position, and many times is a very good position to be in. Getting small, raising cash, selling into the rips is the more traditional way to get out or take risk off.

However if you are brave and want to continue to trade the market there are many strategies to use, There is of course the tough stock strategy where you look for stocks that just don't care about the market and continue to work, and are above their 50 day moving average.

Another strategy is to look for low dollar and penny stocks with good charts, as a mater of human nature when the big boards sell off many traders will gravitate and deploy money into this group as a means of making some of their losses back. There were quite a few biotechnology names that looked good.

You can always play defensively and look for good charts of companies that sell or make anything you can eat, drink, smoke, wash with, medicines, and toilet paper or personal products and services. Traditionally the low beta stocks with a dividend rounds out the requirements. It looked like MO and RAI may fit the bill here.

Or you can hedge your longs by shorting something against it, either by use of pairs trades like Long HFC and Short HES against it, or by shorting an Index directly like short SPY, or using an inverse ETF like SPXU EPV EDZ HDGE. We have over the last few weeks discussed all of these.

Swing and trend traders become day traders that do not hold overnight or over weekends, again this is human nature. We motivate well under fear. We should endeavor to not be motivated by fear so much as logic, if the market conditions are such that more down side is possible, employ a correct strategy with logic. At this point we need to see a retest of the lows at SPX 1870 ish or expect a new lower low. Carry on and use strategy. Fear is for the weak minded and the superstitious.

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Thursday June 25, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Bearish Evening Star
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2140 Support: 2080
Bullish New Moon

I am not quite sure why the market is down Today. Unemployment Claims were good, Personal Income and Spending are up, and the Personal Consumption Expenditures Index or PCE Prices – Core only moved a fractional 0.1% The Supreme Court Ruled to keep the American Care Act subsidies intact. So why all the fear and selling? Market valuations are not unreasonable and the indices are bullish on the charts. Is this all Greek to anyone else?

Asia and Europe sold off in the overnight session and so perhaps Today we are the tail being wagged and they are the dog. Seems like the Greek negotiations are moving the markets way too much for the actual impact that will happen if there is a default. I thought that traders had had enough of the Greek drama by now, perhaps not. France seems to think a deal is still possible, Germany does not. I don't care, and quite frankly neither should you.

The American Automobile Association or AAA said that they expect a record number of Americans to be driving for vacation over the July 4th weekend. Consumer spending is up nicely, Gasoline prices are still reasonably low here, employment is rising along with wages. So why are the markets stuck in neutral? Doesn't make a whole lot of sense to me.

I mentioned the SCOTUS ruling on Obamacare leaving the subsidies alone, this is having a positive effect on Healthcare (XLV), and Health Care Equipment (XHE).

Oil has been holding the $59.50 to $60.00 level for the last two weeks and seems to be in consolidation waiting for the moving averages to catch up, yet Oil Services (XES, OIH) are selling off. I am beginning to think that some of the oil patch companies are looking attractive after some basing and bouncing along the bottom.

Home builders (XHB, ITB) still look attractive here, along with many pin action plays like Home Depot (HD), Lowe's (LOW), and the Tile Shop (TTS). Not everything is Rosy, but then again not everything looks as bad as some would have you believe.

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Wednesday June 24, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Three Outside Up
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2140 Support: 2080
Bullish New Moon

The Mortgage Bankers Association’s Purchase Index, or the MBA Mortgage Index is a measure of new applications and is considered a leading indicator of the housing market, came in up 1.6%. The GDP third Estimate, which is the official “adjustment” of the original number came in weak, as expected, down -0.2%. These are both non high impact to the market, so don't get yer panties in a bunch over either.

The UK FTSE Index was up slightly in the overnight session, while the rest of the Euro zone was down hard over 1% across the indices. Asia fared much better India's Sensex 30 was down -0.27% while Japan, Hong Kong, and Australia were up slightly, China's Shanghai Composite rallied almost 2.5%

The US Futures fell after the revised GDP number was announced, as well as reports that the Greek negotiations remain unfruitful. Keep in mind that the NASDAQ and the Russel 2000 are still both on breakouts with new closing highs.

Lennar (LEN)  home builder reported quarterly profit of 79 cents per share for its latest quarter, beating estimates by 15 cents. Revenue also topped forecasts, with new orders jumping by 18 percent over a year earlier. As some of you that come to my nightly rants know I have been talking about the homebuilders since last week, LEN was one of them. I suspect that many will report good quarters, this is a case where companies with stronger fundamentals should do better.

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Tuesday June 23, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Three Outside Up
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2140 Support: 2080
Bullish New Moon

The Durable Orders number came in horrible reporting down -1.8% we are told by the commerce department this is a combination of weak oil industry spending and that US oil drilling rigs has dropped in relation to the price of oil. Civilian aircraft orders fell dramatically, Boeing said their sales dropped over 35% for the Month of May, We are also told manufacturing orders are weak as well. Durable Goods without Transportation rose slightly to 0.5% The Federal Housing Finance Agency FHFA Housing Price Index rose 0.3% and New Home Sales was strong at 546K  this is the best number in seven years.

The market opened up for the first hour of trading and is now pairing gains. Even stronger manufacturing and economic data out of France and Germany was not enough to keep the rally going Today. People are still fearful over the Fed and Greek drama.

In reality the US economy is doing better, or at least according to the data, US fundamentals are still sound and improving. And yet the US markets are the laggards compared to Europe and Japan. We may in fact find ourselves playing catch up with those markets over the Summer. Summer always has the potential for a rally as traders take vacations and the retail trader has more impact than usual, and retail traders tend to be more bullish then the professionals.

Then there is this strange term I am beginning to see used, reflation, not inflation, but reflation. This is what they are calling the good price increases in the economy, like home prices. Although some of this is due to foreign investment in US real estate. It's estimated that wealthy foreigners purchased more than 100 Billion dollars worth of US homes and properties in the last year.

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Monday June 22, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Three Outside Up
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2140 Support: 2080
Bullish New Moon

The NASDAQ and Russel 2000 both printed a new intraday all time high Today, and may give us a new all time closing highs as well, we shall see. The S&P 500 is within 0.4% of its all time high, the Dow Jones Industrial Average is almost within 1%. Where are all of the naysayers and bears now? The news feeds are still full of them warning us about all of the various calamities that are about to happen. Top of the list is the Greek crisis, Greek default watch, and the impending apocalypse. European contagion, the China collapse, inflation, deflation, the dollar, the bubbles, the diseases and poxes about to descend on humanity. Well all righty then, as long as bears abound, we can watch the markets go higher.

Greece has all but said they will eventually give in to the European Troika demands, but are negotiating the best deal that they can. Traders have become so numb to this dance I doubt that any actually care any more. Deal or no deal, default or don't default, just go away. Please just go away.

Europe was up strongly Today, the German DAX an the French CAC both added 3.81%, the Euro Stoxx 50 was up over 4%, the Spain IBEX added 3.87%, and the Italian MIB added 3.47% They are mostly still below their 50 day moving averages, yet certainly showing signs that the current dip may be ending.

In US economic news Existing home sales printed 5.35 Million homes sold for the Month of May, up from 5.09 million, and the best number in over five years. More proof that the US housing market is recovering nicely, a slow steady improvement until the Fed rips the rug out from under the recovery by raising the discount rate. Tomorrow at 8:30 AM we will get the Durable Orders number, that can impact the market more than any other economic news out this week. Watch that for any significant improvement. More about the Best Penny Stocks To Buy

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Thursday June 18, 2015 by Big W
Market Phase: Warning, Market Bias: Bearish
Last Candle Pattern: Bearish Evening Star
P&F Pattern: Bearish Column of O's
S&P 500 Resistance: 2140 Support: 2080 2070
Bullish New Moon

Even if the SPX closes above the 50 and 20 day moving average Today I will still need to wait for the confirmed breakout before changing the Phase back to Bullish. We have had a confirmed breakdown of both moving averages and now must be considered resistance until proven otherwise.

Unemployment Initial Claims were down sharply from last week, and the trend has been to the downside for many months now. As far as I am concerned this economic metric is normalized and of little consequence to the market. However some traders just seem to keep hanging on to it like some bejeweled talisman. Get over it people, Unemployment claims don't mean jack anymore.

The Consumer Price Index or CPI is much more interesting anyway. As you know CPI measures inflation, and we actually got some Today, about 0.4% worth. It is worth noting that people have this negative view of inflation like its the worst thing that can happen but the reality is that a little inflation is good and a lot of inflation is bad. Also keep in mind that there is a second metric of Core CPI which is the less inclusive number that does not count food or fuel pricing. This is useful to us so as to distinguish if short term food and fuel pricing is moving up or down or if everything is. Since Core CPI only moved 0.1% then we know it is just the more volatile products that are currently adjusting.

Current US Account Balance came in better than expected at -113.3 Billion Dollars if you annualized that number it translates to the US importing about 1.3 Trillion dollars worth of stuff more per year than we export. Yeah, that's great that the number is going down, but I wish people were more focused on that number than Unemployment.

We are still waiting on the Philadelphia Fed number, Leading Indicators, and Nat Gas Inventories which all sound important and yet are all of little to no impact at all. The banks are all playing spin the wheel, or spin the bottle about the eventual Fed rate hike. I am still of the belief that we would do more.

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Wednesday June 17, 2015 by Big W
Market Phase: Warning, Market Bias: Bearish
Last Candle Pattern: Bearish Evening Star
P&F Pattern: Bearish Column of O's
S&P 500 Resistance: 2140 Support: 2080 2070
Bullish New Moon

The Mortgage Bankers Association  (MBA) Index was down -5.5% this is the measure of mortgage applications, makes some sense as mortgage rates went up, slowing the pace of applications. This is one of those things that I said be careful what you wish for. The Fed has not raised tits discount rate yet but the 10 year Treasury bonds have sold off some pushing rates up anyway. If mortgage rates continue to go up that will absolutely put a crimp on the recovering housing market.

The Fed will speak to the rate at 2PM Today, expect hawkish words and no actions taken. Once again I will reiterate that the economy simply does not meet the requirements for a hike. Words are cheap and hawkish appeasement will certainly be the tone of whatever is said, don't expect a rate hike anytime soon. I don't care what the experts say, just like Jon Snow they know nothing.

Crude oil inventory at Cushing Oklahoma fell  by over 2.6 million barrels easing storage worries once again. This shows organic demand and draw downs of inventory over the last Month is an indication that the US economy is strengthening some. Oil prices have stopped going down since February and while oil is not exactly climbing to new highs here we have certainly seen the bottom.

As the SPX 20 day moving average continues down ward threatening to cross below the 50 DMA we see continuing downside momentum. It seems that a bearish cross of the 20 DMA is going to happen forcing the SPX like the rest of the European Indices into a Distribution phase. You can call this sell off whatever buzz word you feel comfortable with, a dip, a small correction, a bear run within the secular bull market, a rose by any other name. Expect more selling and lower lows for the next few weeks. The June Swoon is certainly living up to its name and reputation. Perhaps July will be better.

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Tuesday June 16, 2015 by Big W
Market Phase: Warning, Market Bias: Bearish
Last Candle Pattern: Bearish Evening Star
P&F Pattern: Bearish Column of O's
S&P 500 Resistance: 2140 Support: 2080 2070
Bullish New Moon

US Housing Starts were down a little from last Month at 1036K, economists expected at least 1100K, not the end of the world. Building Permits however rose sharply to 1275K highest in 8 years, this is significant because as you all know you need the permit first before you actually start building. I believe that this show the housing recovery is still very much intact. Coupled with Yesterdays National Home Builders Association NAHB Housing Market Index rising to 59 is a good sign that housing will continue to do better in the second half of the year. Hopefully rising interest and mortgage rates won't derail it.

The Greek Government is standing it s ground with its EU creditors, They are firmly anti austerity. However a recent poll of the Greek people would accept more austerity rather than leave the Euro zone, 56% to 35% Personally I am 100% sick and tired of hearing about Greece. A tiny little country with the GDP of a flea causing all of this unrest and ruckus in the markets. Maybe Europe can sell them to Russia and be done with it. The Greek story is pulling down Germany's Investor Confidence which has been dropping steadily throughout this negotiation period, currently at 31.5 down from 41.9 in May. During that same period the German Bund's have been selling raising Germany's interest rates along with the drop. Seems that the Germans are as fed up as I am.

Of note this week was the judgment of the AIG case. This is were former CEO Hank Greenburg sued the Government for bailing out AIG. It seems that the wisdom of Solomon was involved here. US Judge Thomas Wheeler wrote “The Board of Governors and the Federal Reserve Banks . . . did not have the legal right to become the owner of A.I.G. There is no law permitting the Federal Reserve to take over a company and run its business in the commercial world as consideration for a loan.”  So by all appearances Mr. Greenburg won the case. Judge Wheeler also wrote “The inescapable conclusion is that A.I.G. would have filed for bankruptcy. In that event, the value of the shareholders’ common stock would have been zero.” Based on this the Judge ruled Greenburg and AIG get nothing, zero, boopkas. Considering AIGs role in the financial collapse and the fact that they were one of the top bad actors causing the recession, this seems more than fair that they get nothing, they should thank their lucky stars that the Fed did what it did at the time or they would have surely gone the way of the Dodo bird. I still think they should be broken up and spun off into many smaller separate companies along with all of the other bad actors including the banks and the insurers.

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Monday June 15, 2015 by Big W
Market Phase: Warning, Market Bias: Bearish
Last Candle Pattern: Bearish Evening Star
P&F Pattern: Bearish Column of O's
S&P 500 Resistance: 2140 Support: 2080
Bearish Full Moon – Last Day

After last week's head fake and what appeared to be the start of another rally, our hopes here dashed as the 20 day moving average turned out to be resistance and on Friday a high reliability bearish Evening Star reversal formed. Perhaps I was too quick to jump the gun and put us back into Bullish phase, it is fairly obvious to me now that the June swoon is not over. The 20 DMA is now bearing downward toward the 50 DMA and seems imminently going to cross below putting us into a distribution phase soon. Today's gap down at the open is decidedly bearish and we have no catalyst in sight to regain upward momentum.

June is statistically a horrible month for the markets and this year proves why, it is the transition month between the first half and second half of the year. First half economic data was weak and thus far not improving enough for the bulls to consider it a true read. We know that the second half will be better and stronger, but the experts all seem to agree that it is not better fast enough or strong enough to sustain the rally. It is time for a down cycling of the charts and a small correction, nothing to fear as this will rest valuations lower and allow time for earnings to catch up.

Economic news Today is weak, the Empire manufacturing number came in at -2.0 the worst print in years, this is a measure of manufacturing health in the great State of New York, it was expected to come in around 6.0 and now additional weakness underscores the poor first half numbers. Capacity Utilization is down to 78.1% off 0.2% from expected. Industrial Production is down as well printing a -0.2% into a positive expectation. The only good news here was the NAHB Housing Market Index at 59 showing home prices are still rising. Just not enough to overcome the current market despair.

Companies are still moaning and complaining about the strong US Dollar hurting them, now they have added a new twist as well, Foreign currencies weakness, things like the Euro and the Russian Ruble that have fallen dramatically as the Dollar rose. Giving companies that get a good portion of their sales from foreign shores a sort of double whammy of profit cuts. I warned you all to be careful what you wish for, and a strong Dollar is one of those things, now we are reaping those sour seeds. Almost makes you wish for the days of the weakening dollar and growing profits doesn't it? I will now give you all the same warning about the Fed rate, for those of you that are banging the drums so loudly for the fed to raise rates, be warned that there will be unintended consequences if done too soon. Currently the only sure thing in the US economic recovery is that housing and home prices are stable and improving, a rate hike could derail that whole thing and plunge us back into recession, but what do I know? I am just some jerk who writes a blog.

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Friday June 12, 2015 by Big W
Market Phase: Warning, Market Bias: Bearish
Last Candle Pattern: Bearish Evening Star
P&F Pattern: Bearish Column of O's
S&P 500 Resistance: 2140 Support: 2080
Bearish Full Moon

Today starts the beginning of the news cycle for “Greek Default Watch”, ugh. Will the sensationalists stop at nothing to impose fear? Yes, the bubble headlines are back as well. Did any of them even see that Michigan Sentiment was up four points to 94.6? I think not. Their shallow egg shell minds can not comprehend beyond the edge of their nose.

Energy commodities are down again, so now on a bearish reversal along with stocks. Though the US Dollar is not up either. Gold and precious metals have reversed down also. Bonds and Treasuries are rallying for a second day. I am almost at the point of stepping away for a while and watching how this all plays out. There is no definite trend, and certainly no catalyst for us to wait for, only the doom and gloom of the so called journalists, and of course Greece.

My advice is to stay small and play small positions. With all of the uncertainty there is no reason to be bold here. Better to be timid and wait for a better opportunity than to rush headlong into the mystic and cryptic now. I have been at this game for a long time and there is nothing as frustrating as a trend less market. It will shake your confidence and rattle your nerves. This is probably a good time to take a break or go on a vacation.

Today brought us a rising Producer Price Index or PPI number of 0.5% signaling that input pricing for manufacturers and companies rose a little last month. A tell perhaps to a little bit of inflation, this is a good sign not to be feared. After all a little inflation is a sign of a stronger economy.

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Thursday June 11, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Morning Star
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2140 Support: 2080
Bearish Full Moon

Unemployment Claims came in just fine at 279K do not let anyone try to say that is a bad number, its well under 300K isn't it? I was amazed that the sensationalists were actually trying to spin this as bad because it was higher than last weeks number. As I have stated before this is a normalized range and not even worth looking at, wake me up if it jumps above 300K , till then ignore it.

Meanwhile in other news the Retail Sales number beat expectations at 1.2% at 0.1% above expectations it is not indicating a return to 4% GDP but improving is better than falling. US Export Prices were up a little this Month at 0.7% better than the negative number we posted last Month. Business Inventories climbed again by 0.4% showing industrial output is good. Overall good economic news for Today.

The US Dollar held and rebounded off that 95 level as expected, and Oil  and other energy commodities failed to rally again Today. With WTIC Oil and Gasoline having gaped up Yesterday some profit taking was expected, As I have told everyone many times after a gap up it is typically followed by a down day. These charts still remain bullish as gap ups are bullish continuation patterns.

The International Monetary Fund or IMF walked away from the Greek negotiations, so much for Yesterdays rumor. Now we just have to wait and see what the Greek Government decides. I still feel no matter what action they take it is already baked into the market. Best to ignore Greece from now on.

Of the 30 sectors and Industries that I follow we added one above its 50 DMA here bringing the total now to 17, a majority. The Retail SPDR ETF (XRT) went above its 50 DMA Today on the good Retail Spending number and  pleasantries in the news feeds about how the consumer is coming back and is not dead after all. Total net worth of US households was reported at $84.9 Trillion dollars a new record high. Now if we could just get some of those rich bastards to spend a little, we would be OK.

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Wednesday June 10, 2015 by Big W
Market Phase: Warning, Market Bias: Bearish
Last Candle Pattern: Falling Three Method Continuation
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2140 2100 Support: 2080 2070
Bearish Full Moon

The European indices have all rallied since the open. The UK's FTSE and Spain's IBEX up modestly while the Euro Stoxx 50, France's CAC and Germany's DAX are up strong. US Futures are up. The MBA Mortgage Index (Applications) rose 8.4% last week, the only economic news of consequence Today.

For the second day in a row Oil. Gasoline, and NatGas are going higher while the Dollar dwindles. Treasury bonds and notes gaped lower. Gold, Silver, Platinum, Palladium, and good ole Doctor Copper are moving up, if only into dead cat bounces. As a general rule when Treasuries sell off the money usually rotates back into stocks.

Trading on the SPX Yesterday opened on the 120 DMA, sold off to its low of the day (LOD) exactly to the 150 DMA , rallied up till exactly the 100 DMA at its high of the day (HOD) and then closed just slightly above the 120 DMA . Those three moving averages have remained in a very tight yet bullish alignment (Smaller to larger, top to bottom) since October of 2012, and show no sign of deviating from their trajectory. While the June swoon may not yet be done with us, I believe that this moving average alignment will hold, therefore the secular rally will continue. As the market opened the SPX RSI (Relative Strength Index) bounced back above 40, also a tell that the up trend is intact. If Today's gains hold we will have a very bullish Morning Star pattern and a bullish bias once again. AT the same time unless we trade up to the 50 DMA we will have three days of candlesticks fully below that moving average confirming the breakdown into Warning Phase. The rest of this weeks trading will decide. If we rally and hold the 50 DMA then I suspect we will see a Doji on 20 DMA on the weekly chart and perhaps a continuation of the rally next week.

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Tuesday June 9, 2015 by Big W
Market Phase: Warning, Market Bias: Bearish
Last Candle Pattern: Falling Three Method Continuation
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2140 2100 Support: 2080 2070
Bearish Full Moon

Energy Commodities are up strongly Today Brent Oil, WTI Oil, Gasoline, and Heating Oil are all up more than 3% Natural Gas is up more than 4% and the US Dollar is even up slightly. The market doesn't know what it wants to do here, down a little, up a little, who knows?

Treasury Bonds and Notes are down again Today signaling a possible move from bonds to equities about to happen. As interest rates rise I will once again mention regional banks as the best way to play a rising interest rate environment.

Greece is still pretending to negotiate, Europe was down again for the sixth day in a row, and everyone is concerned about China. Geez Louise, we just can't catch a break with all of the uncertainty going on, and still no real catalyst showing significant improvement. Economic news was not bad with an increase in Wholesale Inventories of 0.4% and Job Openings of 5.367 million, that's a record high for jobs. Still not enough to rally the market here.

Declining stocks outnumber the advancing ones by double Today, there are 20% more new lows than new highs, there are more stocks now below their 50 day moving average than above, and yet we have more buying than selling by a few points. Volume seems light still and we really don't know exactly where market support actually is. The SPX opened right on the 120 DMA , the low of the day so far was 2072, coinciding exactly with the 150 DMA as well as the S! Pivot Point line, currently is holding 2080 a known previous support level. Although so far Today the SPX RSI is below 40 for a second day showing that the bullish trend is, or should be over.

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Monday June 8, 2015 by Big W
Market Phase: Warning, Market Bias: Bearish
Last Candle Pattern: Falling Three Method Continuation
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2140 2100 Support: 2080 2070
Bearish Full Moon

The Turkish market is selling off after their election and the incumbent party failing to win a majority of votes. President Erdogon and his AK party have 45 days to form a coalition government or another election will be held. This has caused political uncertainty and therefore the sell off. The Turkish Lira has dropped to a record low against the US Dollar as well.

Germany's DAX Bourse (Index) has officially entered a correction, as it is now down more than 10% from its high. The sell off in German Bunds (Treasury Bonds) began the selling and the German equities followed them down. In the wake of this Co-CEOs Anshu Jain and Juergen Fitschen have resigned from Deutsche Bank (DB). The bank said former UBS CFO John Cryan will be taking the job. After three years of lackluster performance, investors are happy about the change; the stock jumped 8% Today, the most in three years.

China's imports plunged as exports dropped for a third straight month. The trade slowdown points to a slowing economy and there are calls for more central bank support. But remember in these times bad news is good news, and the Shanghai Composite jumped more than 2% how bizarre. .

The G-7 summit is wrapping up Today and it appears that they are all pushing for EU leaders to finalize a deal with Greece, and climate change, but mostly Greece. Greek negotiations will resume now that the G-7 meeting is over.

Now with the SPX below its 50 Day moving average for a third trading day, I have changed the market phase to Warning from Bullish, while this may be a bit premature as Today will be the first day where the Japanese candle is completely below the line. It seems prudent givin how the market has been acting lately. I am of the belief that a June Swoon will happen, raise cash, take profits, get small, play defensive, and good luck to all of us.
You can always buy some volatility through UVXY ProShares Ultra VIX Short-Term Futures ETF it is a 3X levered way to play the VIX, plenty of volume here and again, make sure you put a stop of some type.

Unfortunately my eyesight is not as good as it should be and my fingers are quite fat, so this is not something I do often. When using a levered product like EDZ UVXY or EPV a smaller position with essentially neutralize an account well. If you are holding tough stocks that don't drop excessively a $1500 position can protect a $10,000 portfolio, HDGE is not levered so a full position is required.

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Friday June 5, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Falling Three Method Continuation
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2140 Support: 2100 2080
Bearish Full Moon

The Nonfarm Payrolls number came in very strong with 280K jobs added for May, that was 55K more jobs than economists expected. Wages are on the rise as Hourly Earnings for May also jumped by 0.3% The bottom line is that America is going back to work and wages are getting better. Along with this a whole host of hawks are now once again beating the drums for a Fed rate hike, they just can't get it through their thick skulls that its not going to happen for at least another six months. I just don't understand their need to push the issue.

We have all heard the old Wall Street adage “Sell in May, and go Away” however this year May continued to hold up, the next possibility is that we have a “June Swoon” which makes more sense as statistically June is one of the weakest Months of the year for the market. The DJIA has been down eight of the last ten years in June, the S&P 500 seven out of the last ten, and the NASDAQ also down seven.

A swoon is when the market is dipping or correcting depending on your long term view. With some of the major Indexes below their 50 day moving average the market currently has a definite bearish bias. Most of us have raised cash, gotten “smaller” are playing “Defensive” stocks and all of the usual moves as this dip has unfolded.

However, what if you have some nice dividend payers that you just want to hold on to, especially those monthly income payers? One strategy may be to play something short against those longs just as the mighty Hedge Funds do. Most people do not have a large enough account, or do not have a margin account set up, so traditional short plays or buying PUT protection just wont work.

There are a few inverse ETFs that may fit the bill. Keep in mind that these inverse ETFs do have significant fees and are not for long term holds, however for short periods of expected decline they can work quite nicely. You buy and sell it just like any other stock. There are three that seem to work reasonably well, although in all honesty I have not actually traded all of these.

HDGE is the Active Bear ETF, the fund automatically manages a basket of shorts for you volume is good. This is the best choice for newbies as it is not levered and moves slow enough to keep track of easily.

I have traded EDZ a 3X levered Inverse emerging markets ETF using this hedge strategy with some success. You must be quick and nimble, and place a trailing stop or stop limit as thew ETFs will expose you to short risk, which can be unlimited. A stop of some sort is a must. Just in case the trade goes against you.

If you think Europe is gonna sell off more than the US market there is the ProShares UltraShort MSCI Europe ETF the symbol is EPV. It is a 2X levered Inverse ETF and can move very quickly in your favor, or against you if you choose the wrong market directionality. Not for the newbie trader and definitely not for the weak of heart. This is a very short term trading vehicle, usually not more than a couple of days, then take the money and run. Volume of late is lackluster with an average of only 12.5K daily, but I don't think anyone will get stuck in it.

SDOW is the ProShares UltraPro Short Dow30 ETF and is a levered way to short the SPX.

You can always buy some volatility through UVXY ProShares Ultra VIX Short-Term Futures ETF it is a 3X levered way to play the VIX, plenty of volume here and again, make sure you put a stop of some type.

Unfortunately my eyesight is not as good as it should be and my fingers are quite fat, so this is not something I do often. When using a levered product like EDZ UVXY or EPV a smaller position with essentially neutralize an account well. If you are holding tough stocks that don't drop excessively a $1500 position can protect a $10,000 portfolio, HDGE is not levered so a full position is required.

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Wednesday June 3, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Three Inside Down
P&F Pattern: Bullish Double Top Breakout
S&P 500 Resistance: 2140 Support: 2100 2080
Bearish Full Moon

Economic news Today once again came in OK not great. The MBA Mortgage Index or in laymen terms mortgage applications came in weak down 7.6% from last time. ISM Services printed at 55.7 down from last Months 57.8 and less than expected, however still showing expansion not contraction. That was the so so news the ADP employment number showed we added 201 thousand jobs better than last month and better than the revised downward expectation. Keep in mind that anything above 150K is considered expansion. The trade balance for all of the hemming and hawing over the strong US Dollar dropped almost ten billion dollars last month, a huge improvement by anyone's standard or expectation. Crude inventories at Cushing OK, had another draw down showing demand is picking up. All in all, not horrible. Things could certainly be much worse.

The Dollar and commodities are down Today, this is unusual as we normally see them trade inverse of each other. Perhaps this is a sign of economic strength? During periods of a normal growing economy these things tend to trade together. It is only because of economic downturns that create the risk on vs risk off because of “Flight to safety” trades. If money is coming out of both the dollar via bonds and energy commodities, that may be a tell that money is about to rotate into stocks, or mattresses. I think stocks are a better choice here.

Yesterday we learned that the automakers are doing great, sales are up, so are margins. And both Americans and Europeans are buying new cars and trucks. The industry in on track to sell approximately 17.8 Million vehicles this year, that's actually better than before the recession. Americans just have to have those brand spanking new overpriced pickup trucks. Buyers are emboldened by low gasoline prices, sounds like the consumer has been duped again all the while the car makers coffers grow fatter, the good news here is that good car sales will help the steel, aluminum, auto parts, and many other associated industries. Ultimately this is good for the economy if not so much for the consumer.

The news cycle was not so deep Today, apparently hopes rise for a Greek bailout deal as Germany's Angela Merkel is stepping in. Jamie Diamond CEO of JP Morgan bank (JPM) is Americas newest Billionaire. After all why shouldn't our original Banksters get even richer? Such a nice reward for all of that criminal activity of the past few years. Americas economic policies continue to bring "economic distortions" keeping that very old idiom alive “The rich get richer, and the poor get poorer” quite alive.

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Tuesday June 2, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Three Inside Down
P&F Pattern: Bullish Double Top Breakout
S&P 500 Resistance: 2140 Support: 2100 2080
Bearish Full Moon

The first trading day of June was up, statistically posturing for sideways action or gain for the rest of the Month. 2100 remains strong support for the S&P 500 so far. While the chart is posturing for a rebound up off support I doubt the market will do much Today, opting to wait for Tomorrows ADP payroll number instead. While most economic news has once again been getting better, traders remain skeptical, and put an over valuation on employment numbers. Employment has been on a steady upward trajectory for the last six years, and unemployment claims prove that as they have been in a steady downtrend over the same time period. Yesterday we saw a glimpse that wages are going up and housing and construction is slowly getting stronger as well. Yes, It is a long slow recovery and has been for the past few years. That slow growth economic environment will likely continue for the next several years as well. Reminds me very much of a popular old Grateful Dead song “Trucking” with Gerry singing “What a long strange trip it's been”. If you don't know it, it's worth googling.

Software and Technology (IGV) (XLK) and Semiconductors (XSD) got a boost from the Intel (INTC) buyout of Altera (ALTR), Healthcare (XLV) and Biotechnology (XBI) continue to rock the Casbah, And Utilities (XLU) seem to have woken from their first half slumber.

Real Estate, Homebuilders (XHB) and REITs (VNQ) showed some strength Yesterday along with the Transports (IYT). The market truly seem to be following that same song and “Just keeps trucking on”.

The US Dollar is still threatening a breakout above its 50 day moving average as the energy commodities remain weaker. The chart of good old Doctor Copper is now broken even though we heard rumors that copper pricing was firming up on Chinese demand. Price is truth my friends.

The relevant topics that traders will be talking about Today include less deflation fear in Europe as their CPI rose slightly by 0.3% and their core CPI less food rose to a nine month high of 0.9% as well. The Greece vs. Euro-zone negotiations are still ongoing with two new proposals, one from each side, still miles apart, still of very little consequence currently. Germany's unemployment rate dropped again and is now at a record low since reunification, although 6.4% is still not a great number, it shows more slow improvement for Europe's largest economy. The Japanese people got a pay raise as their wages increased faster that the cost of living. The Yen is still at a low against the US Dollar. And finally India cut its central bank rate yet again, that the third cut so far this year, seems they are less worried about inflation and more concerned about growth lately. Sounds like we can all use just a little more growth. Read Now

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Monday June 1, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Three Inside Down
P&F Pattern: Bullish Double Top Breakout
S&P 500 Resistance: 2140 Support: 2100 2080
Bullish New Moon (Till Tomorrow)

After last Thursdays huge drop on the Shanghai Stock exchange due to margin tightening, China rebounded strongly Today up just under 5% after a report suggested that they may double bond swap capacity, and the official PMI is at 50.2 up above the mid-line and showing economic expansion. Meanwhile Euro-zone data shows their PMI at 52.2 up since April and May.

Greece remains defiant in the wake up their upcoming IMF payment, Prime Minister Alex Tripras wrote that 'the absence of a breakthrough wasn't Greece's fault but due to the "absurd proposals" of certain institutional actors'. I think it will be interesting to see how this plays out, the market is braced for inaction on any outcome.

During the first quarter of 2015 it appears that Pimco has been buying the 30 year Treasuries. The Pimco Total Return fund (PTTDX) more than doubled its holdings of the long bonds adding nearly ten billion dollars worth.

Personal Income rose 0.4% better than expected, PCE prices game in better than expected by 0.1%, the ISM Index number comes out later at 10 AM EST but the high impact numbers to watch for this week are the ADP Employment Change number due out Wednesday at 8:15 AM and of course the Nonfarm Payrolls number on Friday at 8:30 AM EST, both numbers are expected to be quite robust in the 220K to 235K range. The economic hope is that consumer spending will rise as wages rise. Seems many Americans are more likely to pay down some bills or squirrel the money away at the moment, but we will see now that the nice weather is here. Check Out These NASDAQ

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Friday May 29, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Three Inside Down
P&F Pattern: Bullish Double Top Breakout
S&P 500 Resistance: 2130 Support: 2100 2080
Bullish New Moon

What a mixed bag of mumbo jumbo we have this Morning. GDP shows contraction of -0.7% for the first quarter revision. It could have been much worse. The talking heads are blathering on about the bad winter weather, spending cuts, port strikes, formula failures, and incorrect seasonal adjustments. Oh where is sanity? In the illustrious words of Robert Wuhl, “It doesn't matter” The markets will likely just shrug it off after all bad news is good, right? So the immediate impact is that the Fed now has to delay a rate hike further down the road, which as debunked by yesterdays article doesn't mean anything either. As Shakespeare wrote “It is a tale told by an idiot full of sound and fury signifying nothing”. Everyone is focusing on the next quarter, its all about the earnings stupid. Can corporate America keep growing its sales revenue and earning into the second half? There is the million dollar question. Predictions vary as the prophets and pundits theorize that they will even if companies have to layoff a zillion people and stop buybacks and dividends. The almighty growth shall be sustained at any and all costs, the shareholders must be appeased and the commoners be damned.

I propose that the experts are nothing more than over rated mushrooms being fed by their own bologna. Let me explain what I mean. The general consensus among the so called experts was that a company like Gamestop (GME) had very little chance of survival with such a broken business model, after all, everything is moving to the internet and an old school brick and mortar company that buys and sells games has no place in this more modern economy, how can they possibly survive? Not only did they survive they are doing just great here, The video game retailer earned 68 cents per share for its latest quarter, 7 cents above estimates. Revenue was better than forecast, and they gave an upbeat forecast for the current quarter and full year. Pretty much the exact opposite results that everyone expected, and the funny thing is they did that well right in the face of that stronger dollar we hear so much about. I contend that what one man can achieve another man can achieve, or as pertaining to stocks what one company can achieve another company can achieve. This whole we had a bad quarter because of the strong dollar crap has got to stop, no you had a bad quarter because you failed to execute you lazy company you!.

We heard the same blather a few years ago from Jim Chenos about those Redbox kiosks and DVD rentals, remember that? Outerwall (OUTR) formally Coinstar, the company behind the Redbox's now all over the place is doing just fine, matter of fact they are sitting just off their all time high with sales and earnings growth. These examples prove that financial TV talk show pundits are a dime a dozen and worthless. Make your own decisions, do your own homework, construct your own idea, why ? Because anyone, including you are probably smarter then they are.

The second half of any year is typically always better than the first half, you have heard me say this many times. Experts get paid to say all sorts of things, most of which are lies. Reporters write all kids of sensational stories to get your attention, truth be damned. Each of us must did a little deeper than the headlines and use reason and logic to navigate the terrain. I have been saying that the traders have been squirrelly lately, one reason is because over a third of them are so very young, they don't know any better. The average age of a typical trader is thirty years old, so you can determine that many have never even seen a Fed rate raise ever in their careers. They are not old enough to know better. We need to be smarter than them.

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Thursday May 28, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Three Inside Down
P&F Pattern: Bullish Double Top Breakout
S&P 500 Resistance: 2130 Support: 2100 2080
Bullish New Moon

There are things that happened that you need to be aware of. Fist of all in China there was a tightening of margin lending that negatively impacted the Shanghai Composite Index which dropped 6.5% in the overnight session as a result. The Hong Kong Hang Seng Index dropped 2.23% as well. You may know that China eased rules allowing more foreign investment so this may be a case of the lord givith, and the lord taketh away. Either way this may very well be a catalyst for another large downward distribution day here in the US markets.

In contrast to the Chinese markets Japan rallied for a tenth straight day as the Yen has been dropping against the US Dollar. The Yen is down almost 30% against the Dollar since the beginning of 2013, it also hit the lowest since 2002. This is making Japanese goods and services more attractive to outside markets and fueling the Japanese stock rally.

According to the European Central Bank, Greek contagion might actually be a real thing. They said “in the absence of a quick agreement on structural implementation needs, the risk of an upward adjustment of the risk premium demanded on vulnerable euro-area sovereigns could materialize." In other words, if Greece doesn't reach a deal soon, then bond yields in other European countries could go up. While this sounds terrible, in practical application it may cause temporary sell offs in Euro stocks however I would certainly not consider a default the end of the world and in all likelihood be completely forgotten to history within a few weeks just as the Iceland and Argentinian defaults were. But we have to admit , myself included, that it “Does exist”.

All of the soccer related FIFA indictments are having a knock on effect of railing the Qatar stock market. I don't know if there is a trade to be had at this point and quite frankly I doubt there will be any overflow to other market indices other than those on the Qatar exchange. Lets be honest if its not baseball, American football, basketball, or hockey related American traders will mostly just ignore this news. Who cares about soccer anyway?

Today we may see if the US Dollar intends to gain above its 50 day moving average or fail, this will directly impact commodities in the opposite direction. In a similar vein I did some digging on past Fed rate hikes and statistically when the Fed first raises the rates after a recession stocks continue to rally along with the dollar almost all of the time. So maybe we should stop all of the Fed worry and negativity and look forward to it instead. Put all of this “Pulling the punch bowl away” crap to bed once and for all. No matter how much the Fed induced bears tout their righteous indignation it is all bluster and bologna. We need to pretty much tell them to go make a sandwich and eat it. Read PR

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Wednesday May 27, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Three Inside Down
P&F Pattern: Bullish Double Top Breakout
S&P 500 Resistance: 2130 Support: 2100 2080
Bullish New Moon

Sorry there was no blog article Yesterday, I was quite under the weather and apparently woke up dead.

If, like me, you stayed in bed all day we had a big old distribution day and confirmed bearish reversal. The usual suspects were blamed. Greece says it cant make its next IMF payment, Euro bonds sold off, The Spain elections, the Fed, US Dollar strength, the market is overbought, or stretched, and bubbles abound. There were others but who cares? Like Yogi said “Its Deja vu all over again”. We hit a new high ten SPX points above the previous high and traders are taking money off the table because, you know, see above.

Of note so far is that the economic news all came in better than expected. Durable orders came in -0.5% however that was better than the expected drop, if you remove transportation the orders number increased by 0.5% so there's that. Case-Shiller showed the US is on track for about a 5% gain in real estate prices, the FHFA Housing index gained 0.3% New home sales were up at 517K, and consumer confidence ticked up to 95.4. All relatively good compared to the last quarter so far. However in this bizzaro world in which the markets live lately, good news is bad and down we went, because, well the Fed.

The US dollar gapped up and pierced the 50 day moving average, which I suspect is more a sign that other currencies are getting weaker not that the dollar is that strong. The Euro gapped down and dropped substantially and the Japanese Yen dropped and made a new low. There were rumblings about the Chinese Yuan also dropping to a new low. Weakness for the Loonie, Swissie, Auzzie, and Kiwi also did not help.

Commodities fell across the board Brent Oil, WTI Oil, Nat Gas, Gasoline, Heating Oil, Gold, Silver, Platinum, and yes even Doctor Copper had a rough go. Palladium held its own, which is typical. Of particular interest is Ethanol which also dropped but may actually be showing a “Concealed Baby Swallow” Pattern here on the daily chart.

The long bonds rallied hard indicating likely a “risk off” trade going on, but I don't know if it will have legs as the TLT ETF is at a double resistance here and the VIX was also at a resistance area. Caution is the word of the day as we wait, watch and see if the SPX holds the 50 DMA and /or the 100 DMA. If we break down below the 50 DMA you know the drill, sell and raise cash, get smaller and wait for the market to once again find its support. More Info

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Friday May 22, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish Double Top Breakout
S&P 500 Resistance: 2130 Support: 2120
Bullish New Moon

First of all a happy Memorial Day weekend to all of you. I wish everyone who has lost a loved one in the service to our country peace as we resolve not to let their sacrifice be in vain, but to rise up in their stead and continue the fight for liberty and justice for all.

Don't get too excited about trading Today as statistically the Friday before Memorial day is quite lackluster as everyone is leaving for the three day weekend early, profits are usually taken as nobody wants to hold over the weekend, pssst, are you holdin'? Go take a nap, or start a barbecue, there will not be anything exciting to see Today.

Is anyone besides me just plain old sick and tired of the news organizations politicizing everything? We got the CPI numbers Today and as expected, and as previously explained, the inflation numbers came in low, very low in fact. CPI was 0.1% and Core CPI came in at 0.3% however core CPI was expected to be 0.2% and some news organizations are literally making the argument that because of the high inflation the Fed has to raise the discount rate. I am of the belief that these people went to school in a stoned out stupor. Actual charted inflation over the last two years is 0.006% and  over the last year alone is actually just slightly negative. Even if you annualized that Core CPI number you would get 3.6% a far cry from what anyone would call hyper inflation, and certainly in no way a battle cry for Fed rate hikes. I hate how a strictly economic thing which should be basically boring and left to the far demure sections of any newspaper is up front and center above the fold simply because they have politicized it, the hawks will stop at nothing to get those rates up barbecue it translates into profits for themselves and the financial companies that fund this nonsense. I am convinced that at some point they will bring religion into it somehow. I can just imagine some right wing think group coming out with something like “more than 80% agree that Jesus would raise the rates to help the poor”. Mark my words, that's next if they can't scare up the rate with inflation. Sure scare up the rates with the threat of eternal damnation, that always works.

If large cumbersome companies like Hewlett-Packard (HPQ) and Deere & Co (DE) can beat on earnings then obviously things are just not that bad. Both companies sell out to the world and the strong dollar didn't hold them back any. This gives rise to my theory that companies are using the dollar as an excuse for their lack of execution and performance. It is simple and easy to blame the dollar for any and all failures of management. It just goes o show just how pathetic some companies CEO's and Boards really are. Supposedly they didn't see it coming, didn't do anything about it, they are just lazy mooching jerks sitting back and collecting giant salaries and bonuses for doing as little as possible. Many will ask for tax breaks and subsidies next, I despair. More Info

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Thursday May 21, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish Double Top Breakout
S&P 500 Resistance: 2130 Support: 2120
Bullish New Moon

Unemployment claims are now irrelevant, they are back to normal levels as far as claims are concerned, Its not even worth watching this indicator anymore. Existing Home Sales came in a little weaker than expected, yet was still quite robust at over 5 million. Philadelphia Fed number was down and ugly, but the one indicator that is actually forward looking, the Leading Indicators number, came in at 0.7% better than the 0.3% that was expected. I particularly like to focus on the Leading Indicators because out of every economic number that ever comes out that is the only one that is actually predictive of what may happen in the next upcoming quarter. The only news left for this week is the Consumer Pricing Index (CPI) out at 8:30 AM Tomorrow. There is no significant inflation, so be not afraid.

The US Dollar is down as expected having hit its 20 day moving average, and that may very well be resistance forcing the dollar into a range for a change. The dollar weakness was a boon for oil also as predicted, actually all energy commodities are up Today Oil, Nat Gas, Gasoline, Heating oil, with the exception of ethanol, which has already had a decent run up since February and is now on a dip.

I am surprised that Gold and Precious metals are not up stronger here, but they beat to their own currency drum lately. Doctor Copper is working.

Bonds and in particular the longer duration Treasuries are looking like they are basing here, or at the very least leveling off as equities continue to grind up ward. After tapping on that SPX 2130 level three times since Monday, a close above means bullish continuation. Another 10 SPX points looks like its in the cards, then on to 2150 which is the first Fibonacci extension number.

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Tuesday May 19, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish Double Top Breakout
S&P 500 Resistance: 2130 Support: 2120
Bullish New Moon

Gotta start this bright Sunny day off with a Booyah as Housing Starts and Building Permits spike up above expectations. Housing and real estate is not dead after all. While this is considered medium impact economic data for the market, it shows that more people were out actually buying houses early this spring.

The US Dollar has rebounded strongly again Today signaling a bullish reversal off 93.00 it is currently right at its 20 day moving average and so we shall see if this is for real or just a dead cat bounce. Oil, gasoline, heating oil, gold, silver and the ususl suspects in the commodity sector are showing downside, as expected with a stronger dollar. Natural Gas is the notable exception up strong Today after breaking out above 3.00

Europe rallied fairly well in the overnight session with most of the individual country indices like CAC, DAX , IBEX up over 1 percent. The UK reporting actual negative inflation, so much for the Central Banks warning of higher inflation to come. It truly makes you wonder where these bozos got their economics degrees from, a cracker jack box?

On Friday the US will get its inflation numbers (CPI) and we now have to assume similar results as the UK, very low or negative. While many of you keep trying to convince me that food prices are going up I have to remind you all that input cost of softs and grains are down, as well as energy and fuel costs across the board. So while you might actually be paying more for steak and brand name items that is likely due to real estate costs in your area and large food producers who constantly raise prices on their brands every six months regardless of what it cost to make them. As all things consumer, some places are more expensive to live and shop than others, high cost of living urban centers like New York, Chicago, Atlanta, LA, etc. may be charging more for food, but not because of inflation. Ponder that for a minute, I have faith that you will get it. It's corporate greed, not actual need.

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Friday May 15, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish Double Top Breakout
S&P 500 Resistance: 2120 Support: 2075
Bearish Full Moon

I believe that the market is about to fulfill its breakout and leg up. Yesterday's new all time closing high of the S&P 500 will set off some old school investors and traders as the Point and Figure chart shows a new Double Top breakout. The Dow Jones Industrials are poised for a breakout of its own if that index closes above 18300, NASDAQ is already on a P&F breakout. The laggard in the group is the Russell 2000 which would need to close above 1250 for a bullish column reversal and close above 1280 for a breakout. While many day traders and retail traders have no idea what P&F even is, many old school money managers do and use this older charting method, most feel that it eliminates noise and shows clearer and more reliable trends. Respect the old school.

While the market looks bullish the actual economic news is less optimistic, resulting in a divergence between fact and indices. Empire Manufacturing came in very low at 3.1, Industrial Production was -0.3%, Capacity Utilization lower at 78.2% and even Michigan Sentiment fell to 88.6 from 95.9 all of this points to a weakening economy so why is the market rallying here? The answer is simple the market is forward looking or predictive by six to nine months, and while the current economic news may indeed be weak, the second half will heat up some and improve. We just have to keep the faith, much like believing in magic will keep Tinker Bell alive, I believe, I believe, I believe.

Weak economic data will keep the Fed from doing anything hawkish for a while longer, expectations for that inevitable rate hike are now pushed off to at least the end of the year if not pushed off to next. The hawks are going to go bananas and we will be able to watch their heads asplode as they scream and dissent. I say let them, its probably good for their blood pressure to let off some steam, they can scream all they want if the economy does not meet the criteria, there is nothing they can do but complain.

Be careful which sectors you play if you want to trade for a leg up here, not every group is participating. Laggards include Pharmaceuticals (XPH), Health Care Equipment (XHE), Telecommunications (IYZ), Retail (XRT), Oil and Gas Exploration (XOP), Transportation (IYT), Real Estate (VNQ, REM), Capital Markets (KCE), Homebuilders (XHB), and surprisingly Utilities (XLU) some of these groups should be working this time of year and simply are not, I suspect an outlying year after an exceptionally strong showing by many last year.

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Thursday May 14, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2120 Support: 2075
Bearish Full Moon

I warned those of you shorting into this mess that the market will reverse when it can hurt the most people. All of the pundits and economists touting all of the next shoes to drop was a sign of bullishness. Once again we are knocking on that 2120 SPX resistance level. Just as the market does not want to go up, it surely does not want to go down either, quite the conundrum.

We discussed how money has been pulling out of bonds and that usually leads to the money going somewhere else, usually equities and commodities. That appears to be exactly whats happening here, we will know for sure if the SPX breaks out above resistance to a new high, then its a risk on trading environment. This is exactly the opposite of what normally happens in May further confusing what to expect going forward.

There was a good article on Bloomberg Today how Debt traders are calling the Feds bluff and pricing in no Fed rate hike for the rest of the year. I have been telling you all that for a while now. The implied odds for even a rate raise in December is now below 30% Its just not going to happen, no matter what is said, words are cheap and rhetoric meaningless. Their will be no action this year, no matter how much your crazy Uncle says so.

While unemployment claims were down again that is not the reason for the rally here, unemployment is now a non issue, just ignore this going forward, its back to normal. The real news was that the Producer Price Index or PPI came in at -0.4% much lower than expected, this tells us that input costs are down allowing more profitability. PPI is a high impact event for the market and now you can see why.

The dollar is holding below 95, oil is holding at just around the 60 mark, and gold, silver, and precious metals are grinding higher, potentially going to break out above their 50 day moving averages. Rumors of strong gold buying in Germany as a cautionary hedge against inflation and recession may be driving this rally.

After digesting all of the economic news out of Europe Yesterday traders decided that it was good and Europe rallied across the board last night, most of the Euro zone indices are just below their 50 DMAs here and finding support on or near their 88 DMA . Consider Europe on a dip and will likely rebound back into bullish phase. How can they not with the European Central Bank actively easing.

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Tuesday May 12, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Bearish Three Inside Down
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2120 Support: 2075
Bearish Full Moon

The current story being told by the S&P500 is as follows; touch support, rally, touch resistance, dip. This last week even added a new twist after touching support gap up and rally, then after touching resistance gap down and dip. Resistance is firmly at 2120 and support is at 2075 and or the 100 day moving average. The 50 DMA doesn't matter, economic news doesn't matter, mergers and acquisitions have no effect. I believe that the uncertainty of the US economy going forward is in question. Typically the market is forward looking and predictive. As of late the markets crystal ball is on the fritz and its Magic 8-Ball is cracked and broken, even the chicken bones won't tell their tale. All I can tell you is that when the market has a fixed horizontal resistance line and an ascending support line that forms an ascending triangle pattern, which is bullish. I am still staying long in my positions and hoping for an upside breakout. If the chart breaks down below support then I will get small and raise cash.

There are more bears out there than you can shake a stick at, which likely means that the markets will hold up, this may just be the contrarian in me, but as long as there are bears the market may still climb a wall of worry. Hollywood paints a picture of traders as stoic, strong, brazen, brave, and daring to face the markets with nerves of steel. The reality is they are more a sad, scared little child, taking profits at every slight rise. Spineless slinks, hiding behind worthless pundits and shills who know nothing. They say that fortune favors the bold.

The US Dollar has now broken below its 100 DMA and while still holding that 94-95 level is looking more and more like it may not hold. The Euro has bounced up off that 1.05 level and there is reason to believe that trend may continue.

Brent Oil is up strongly Today reversing off the 20 DMA and WTI reversed Friday off its 20 as well. The good Doctor Copper has resumed its upward trajectory as well reversing upward off its 10 DMA.

US treasuries continue to sell off some here the longer the duration the larger the drop, the 30 year Bond has made a new lower low and broken below support. Short and ultra short duration notes are still holding up well. Sometimes money comes out of bonds and goes into equities, sometimes it goes into mattresses. You can almost feel a change in the direction of the wind coming, but to what direction, I nor the market seem to know.

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Monday May 11, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Three Inside Up
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2120 2110 Support: 2095 2075
Bearish Full Moon

Everyone was warning about how the market would sell off after Fed Chairman Janet Yellen's (affectionately called “Old Pumpkin Puss” by many in my chat room) comments about stock prices were “Quite high”. Historically Fed chair advice on the markets have been wrong, most recently Ms. Yellen cautioned about how stretched the Biotechnology sector was and low and behold here we are a few months later and thirty percent higher. Warnings about asset bubbles and valuation can often be a contrarian indicator. Back in December 1996, former Fed Chairman Alan Greenspan warned that investors were undergoing a bout of "irrational exuberance," In the year following those remarks, the S&P 500 rallied 28 percent. In March 2007, then Fed Chair Ben Bernanke, expressed confidence that the subprime crisis was likely contained. As it turned out, not so much, and as you all know we crashed and burned shortly thereafter. I don't think anyone should focus on Fed stock market predictions, its not their area of expertise obviously.

A few days ago I asked the question of “What could go Right?” and now we may have a glimpse of that future. The European economy is now expected to grow at an even faster pace than the US and that the weaker economies of the Euro zone are also now picking up some. The China Central Bank eased rates over the weekend, and there may still be actual stimulus to come. The US economy is showing signs of strengthening after a weak first quarter, the sun is shining, and there is even some evidence of higher paying jobs picking up and wages increasing. Not everything is coming up roses just quite yet, but a small improvement is better than none. Many economists have been warning about how corporate earnings might even turn negative, and now those same dingle berries are saying that they will not.

Real estate and housing are still not rebounding as fast as the mystics and statistics say it should, that is not to say that it is not rebounding, just at a slower pace than expected. That is to be expected as an entire younger generation is in debt up to their eye teeth with college debt and have seen two housing market corrections in their lifetime. Couple that with the need to stay mobile for job prospects and at least we can understand why housing is not rebounding as fast as after previous recessions. Less stability in the job market and less employee loyalty demand more caution. Millennials are not willing to put down permanent roots, or pay for those roots unless they feel much more confidence in their ability to keep and stay at a good job fr longer periods of time.

As far as the markets go, I am not that concerned that Today is weak and uncertain, Mondays rarely turn out to be good trading days, I am more interested in that the market action will be Tomorrow and Wednesday. And yes, I am watching that SPX 2120 level closely. Read More

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Monday April 27, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Stick Sandwich
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2120 2110 Support: 2075 2060 2040
Bullish New Moon

There will probably be more follow through on Last weeks breakouts, I expect the NASDAQ and the S&P500 to continue to gain ground, or at the very least open up with gains. Ultimatly we will find out if Today's traders are mice or men.

Brent oil and WTI oil have pared their gains back toward their support and breakout levels watch Brent at $64 and WTI at $54 respectively, and lets see if the Dollar holds its 50 day moving average at 97.32 Oil, NatGas and energy are down at the moment, and the dollar is up. Remember that nothing goes straight up or down, there is always lots of zigs and zags.

Analysts are bullish Disney (DIS) and Apple (AAPL) Guggenheim, expects good things from Disney's new films "Avengers" and "Star Wars." Brean Capital initiated a Buy on AAPL on expectations of greater iPhone sales when they report Today after the close.

Corinthian Colleges (COCO) is shutting down all operations Today after a long fight with improper financial aid dealings and having its accreditation challenged. The final straw came last year, when the Department of Education put Corinthian on heightened oversight. I have been warning that the for profit colleges are nothing more than glorified scams especially preying on our Nations Veterans.

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Wednesday April 8, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Three Inside Up
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2120 Support: 2060 2040
Bearish Full Moon

As China hits a new seven year high we see the iShares China Large-Cap ETF (FXI) on a huge breakout above previous resistance at $44.00 while at face value you would think that China is rallying, it is actually Hong Kong and the shares of Chinese companies listed on the Hong Kong exchange that are actually rallying. Besides the FXI Global X China Industrials ETF (CHII) surged 13.3%, Guggenheim China Small Cap Index ETF (HAO) jumped 10.4%

Individual Chinese company stocks are rallying like mad as well take a look at YOKU YY WB JMEI ACH SINA SFUN QIHU BITA LFC SOHU PTR ATHM JD NTES BIDU CTRP BABA and many more. Will this continue? Hard to chase most here, but the overall trend I believe may stay for a while.

European stocks may be on the verge of a similar type move as the FTSE index has now broken out above a ten year double top much like the US indices have, it is as if Europe is following behind the US by a couple of years, if that is true, we should see nice upside gains of European stocks going forward.

Let's not forget Japan here either the iShares MSCI Japan (EWJ) is on a nice breakout and leg up also as exporting companies like CAJ SNE TM have done well so far this month.

Bloomberg had an article of how the oil inventory had the biggest draw down in a decade. This has me scratching my head as US oil inventory had another build of more than 10 million barrels. They must be talking about BRENT oil and certainly not WTI either that or they are smoking some left handed cigarettes and not sharing any. The United States Brent Oil ETF (BNO) is down Today almost -5% and WTI is off more than -5.5% so I am leaning toward Bloomberg just being dead wrong.

After the Fed minutes the US Dollar rallied from about 97.90 up to 98.30 on hawkish appeasement. Just a though here as the US markets continue to figure out what they actually want to do, perhaps look elsewhere for alpha. Even lowly worm Russia is doing better at the moment.

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Tuesday April 7, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Three Inside Up
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2120 Support: 2060 2040
Bearish Full Moon

I could not have been more wrong Yesterday, I predicted a distribution day and we rallied instead, Mea Culpa. Today looks like we are setting up for more upside follow through, so the market may be down. I am getting as bad as one of those talking bobble heads on TV. When the charts are at an inflection point this sometimes happens, There is confusion in the craft, or congestion, if you prefer. It is when the charts read the opposite of a Doctor Seuss book, clear as mud. It is hard to see clear trades through this obfuscation.

Mood and sentiment almost seem bi-polar we get distribution without fear, buying with no catalyst. Sell off on good news and rally on bad. I can see only one true upside catalyst for the markets and that is the start of earnings season. Naysayers and bears abound, one firm Estimize is estimating negative growth with -1.1% S&P growth and -1% in revenues, if that is true we are in for the worst earnings season in over five years. This is prompting the Bubble people back out into the open. Warnings that the damage is already done for the quarter and that many companies are going to have strong comments about how the US Dollar has hurt their bottom lines. Many companies have already warned of this, I suspect even companies with zero currency effects will use the dollar as an excuse as well. It will surely be the quarters scapegoat.

The news feeds and blogs are full of fear mongering in all forms, from the a fore mentioned market bubbles, to pending corrections, terrorists, false flags, impossible economic data, and the tyranny of the IRS. Yes there is even talk of Greece again, one salad and a Gyro please...

The only thing I fear is the incompetent US Congress. So far there has been zero work done on raising the debt ceiling, putting together an actual budget, as opposed to the zealous right wing neoconservative wet dream that they currently have. Talk of sabotaging the Iran deal, and of course all of the other usual suspect diatribe that we know will fall out of that cesspool.

Asia and Europe rallied strongly in the overnight session, Spain became the third Country with negative bond rates, and the US futures are pointing to a decent upside open, but again, after Yesterdays mess who knows what will actually happen after they ring the bell?

Looking at the pre-market I would not be shocked to see what worked yesterday sell off Today and vise-versa. Many gold miners look down including Barrrick (ABX) and Sibanye (SBGL) and of course the usual ETFs. Fed-Ex (FDX) and Greenbriar (GBX) are up on news, and the oil patch is anyone's guess, and Go Daddy (GDDY) is still a No Go Duddy.

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Monday April 6, 2015 by Big W
Market Phase: Warning, Market Bias: Bearish
Last Candle Pattern:  Bearish Three Inside Down
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2120 Support: 2060 2040
Bearish Full Moon

Today there will be pain and confusion as I expect another stock market distribution day. There seems to be a bit of a disconnect between what Europe and Asian markets are doing and the US markets. Traders are so skiddish about the US at the moment, weakening data in general, oil supplies in Cushing Oklahoma, and US dollar strength continue to put pressure on US companies profits and margins. While there appears to be very little actual fear the consensus is that we need to sell off more to mirror economic throughput. Last Friday we saw the weakest Non Farm Jobs Number in years asserting that job growth is still at a slow pace along with economic growth.

I have been saying how the Fed will not raise rates anytime soon in the face of deflation and economic weakness, the odds makers agree and using implied volatility calculated less than a 10% probability of a rate raise in June, and less than a 30% probability in September as well. So much for all of that hullabaloo. The Fed actually said that when they do raise the rate it will be a small increment. Why must traders be so insecure? These spineless weasels are the ones currently selling and so we all must raise cash and get smaller or hedge our longs into their lack of confidence. We should be rallying now through May and instead we can write off this years Spring rally as a pipe dream.

The Euro and the British Pound are slowly recovering some from their recent shellacking, and the dollar is forced sideways at best, this puts a bid under gold and precious metals and oil for the moment. Gold, silver, platinum, and palladium futures are jumping pre-market.

Refiners are either ramping up to maximum capacity, or about to as margins and oil inventory rise. That in turn may force gasoline pricing down on oversupply rather than on Brent Oil pricing.  WTI oil futures are up strong pre-market as well.

When and where the steam blow off ends is anyone's guess the market is in Bizzarro mode so expect strength when you would normally expect selling and vise-versa. Be cautious as we possibly enter the range of a Distribution phase for the first time in a long while.

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Thursday April 2, 2015 by Big W
Market Phase: Warning, Market Bias: Bearish
Last Candle Pattern:  Bearish Three Inside Down
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2120 Support: 2060 2040
Bullish New Moon

Economic news was actually very good across the board Today, there were less job cuts, employment is up, the trade imbalance was improved, factory orders were up, and nat gas inventories drew down. All good news, and yet all considered low impact. Now all the chatter among the talking heads is we keep adding jobs into the weakness. Remember how up until about a year ago it was all about the “Jobless Recovery”?

The action on the tape is still rather pathetic, in a week that should have been very strong during a seasonally strong time period, we can't hold any gains. This is proof of continued selling into any strength. It all seems so very counter intuitive to me. This years best six month strategy is turning out to be not so great, we started out in October just fine, but by January the market weakness became pretty clear, since the beginning of the year the markets just cant seem to hold gains. Are the optimists losing hope?

The market is giving us just enough green on the screen Today to give us a false sense of security and dangling a carrot in front of us that maybe that SPX 2055-2060 support area will actually hold, I can feel traders across the Country crossing their fingers and whispering to themselves “Please hold, please hold, please hold...” Tune in Monday, same bat time, same bat channel.

Just when you though things could not get any stranger, Nuriel Roubini pens a fairly bullish article about Europe basically endorsing the ECB quantitative easing plan, coming down hard on Germany and Austerity, and giving us insight into the Social and populist movements in Spain and elsewhere. He recommends they do actual stimulus to bring down unemployment. Wait, what?  Nuriel Roubini, the original prophet of doom, is bullish?

The market is closed Tomorrow for the Good Friday Holiday, wishing you all a great weekend, and a very Happy Easter to you and your families. Ciao for now.

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Wednesday April 1, 2015 by Big W
Market Phase: Warning, Market Bias: Bearish
Last Candle Pattern:  Bearish Three Inside Down
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2120 Support: 2060 2040
Bullish New Moon

Probably time to raise cash and go defensive, the market has stalled, and the prophets of doom abound. The Spring rally is a bust. There will be no Easter Bunny rally hop this year. Mixed data and weaker earnings are scaring the US indices into submission and it seems that no amount of confidence will talk us up.

It looks like I fell prey to a bull trap, we all did as Monday's hope turned very quickly into despair.

All the experts agree that we will experience a slowdown of earnings growth this quarter and next and I can find no evidence to the contrary. King Dollar is kicking to many balance sheets in the Wontons, and that is more likely to continue rather than fade.

The second half of the year will be better and stronger as is the expected norm. Yet nobody is willing to wait for it, talk of correction is once again in the morning air. While I doubt this will be the big one, the charts seem imminently to want another down cycle. Who am I to disagree?

Play hedges, shorts, or defensive plays, just pretend May came early this year. Raise you in NJ and get smaller on any core investments. This may even be a good time to re-balance your mutual funds and scoop half or so into a money market fund for a while. Keep any and all dollar cost averaging plays in place, and sit tight for now.

Individual chart plays are fine as long as you don't bet the ranch on anything in particular, and remember that penny stocks tend to do well in bear cycles.

Sometimes you just cant fight the herd mentality and have to go with the flow of herd traffic. You all now that I am for the most part a perma bull, or at least I play one on TV. Right now I have to turn market neutral or negative until we see next quarters earnings reports, then I will re evaluate along with everyone else.

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Tuesday March 31, 2015 by Big W
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern:  Bullish Tweezer Bottom
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2120 Support: 2060 2040
Bullish New Moon

All I can say is that the Lord givith and the Lord taketh away. Today is shaping up to be a taketh away day as US futures fall. Yesterday the commodity and materials stocks rallied hard, I am afraid as the US dollar continues to rally those gains will be sold off. The only question is by how much? A key figure is half, if we give back more than half of Yesterdays gains that will cause a bearish reversal yet once again. If the market can stave off giving that much back we can then potentially grind higher.

I have been warning about how the strong dollar will eventually hurt US Export sales, that day may be here as King Dollar is putting pressure on commodities and those related businesses. The pricing of aluminum bauxite, iron ore, coal, natural gas, oil, gold, is weak and getting weaker, gluts in supply abound. Many industries such as the small oil drillers and coal mine operators are in a Catch-22 here. They have to decide if they want to keep operating at a loss or walk away from their investments. Most have decided to keep producing into commodity weakness adding more supply into the glut, this in turn will weaken pricing further. In many instances it will cost them more to actually shutter production than it will to keep operating at a loss. The question then becomes how long can they continue to operate this way before they are forced into bankruptcy?

Efficiency is helping, especially with the drillers who have figured out how to drill for far less than they used to, reduced profits are forcing companies to figure out how to do things for less so they can take smaller losses. Operating capital has so far not been an issue as the markets have provided liquidity through secondary offerings. All of the warning about the banks taking huge hits on oil company lending so far has not happened. Break even costs have dropped allowing these smaller companies to survive the weaker prices. Many believe that if an energy sector collapse was going to happen that it would have by now. Perhaps we Americans are tougher and more clever under pressure than everyone realized, after all necessity is the mother of invention.

Where are our elected leaders in all of this? After all should they not be taking some active role to help at least stabilize the imbalances and calm the masses? Unfortunately they are all out to lunch, and I don't mean that they are eating a meal here. I mean that they have taken a Lesse Faire, hands off, good luck with that whole economy thing approach as State Legislatures seem focused on Religious and social issues rather than anything economic. They are fiddling with their fund raising while Rome burns, leaving the heavy lifting entirely to the Federal Reserve who, contrary to popular belief, will absolutely not be raising rates into this weakness. The Fed is playing some politics of their own placating the hawks among the Fed Governors. A pox on all their houses.

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Monday March 30, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Bearish Evening Star
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2120 Support: 2060 2040
Bullish New Moon

I have a feeling that Today will bring us a strong rally rebound off the SPX 100 day moving average. If we do rally hard Today this will be the sixth time in four months that the SPX will have rebounded off of this level. I see three fourths of a Tweezer bottom in place and bright green US futures following rallies in Asia and Europe. The question is whether or not the gains hold.

I am sick and tired of all the negativity in the news lately and I have a feeling so is everyone else. Every day as I read the news I get number and number, nothing phases me anymore. It's as if we are traveling down the road singing lions and tigers and bears, Oh My! Planes falling out of the sky, along with the Euro. Politicians perpetually lying through their teeth. Banks deregulating themselves and screwing up their own profits. Congregations and State Legislatures gone wild. Constant warmongering. I am almost to the point of believing we would all be better off if we just turned off the TV and the news feeds and just read the charts. The market will typically climb a wall of worry anyways, so why worry about it?

The US Dollar is rebounding, as expected, off its weekly 13 day exponential moving average, it may just have got it's Mojo back. And using the same chart $BRENT $WTIC $NATGAS $GOLD and even the Euro (FXE) show resistance and down after hitting that same weekly 13 EMA.

Banks, but not necessarily the Money center banks may recover this week as the KBE banking ETF shows double support on the 13 EMA and the 20 SMA here. Other sectors worth watching to rebound off their respective 50 DMAs are Aerospace (PPA) Homebuilders (XHB) Healthcare (XLV) Pharma (XPH) Semiconductors (XSD) Software (IGV) and of course Biotech (XBI).

The first week in April is typically very strong watch for institutional buying especially on Wednesday and Thursday of this week. Good luck to all of us.

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Friday March 27, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Bearish Evening Star
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2120 Support: 2060 2040
Bullish New Moon

The US GDP Third estimate came in at 2.2% slightly less than forecast yet much better than than the last two years. Businesses held back on inventory and equipment buying yet consumer spending is still pretty darn good. Corporate profits were down in this quarter by a similar amount they were up last quarter, the Lord giveith, and the Lord taketh away.

US Dollar headwinds remain as many companies warned that the strong dollar will hurt profits, especially the big multinational corporations like IBM PG HON INTC. The fear in the markets here is that business spending will continue to be cut back thus slowing the pace of the economy. Slower orders means less profits and less hiring.

Current quarter weakness was due to dollar strength, a really bad winter, Oil pricing malaise, and that port strike which slowed the movement of raw goods. Economist are now predicting next quarter growth at about 1.4% or additional slowing of the economy mostly due to the strong dollar. I warned all of you “King Dollar” types that a strong dollar will hurt us, now we will all see exactly how much. Now you all will be wishing for “King Oil” LOL.

Look for strength in the home building and housing markets as sales will perk up quite a bit now that Spring is here. Tax returns will spur spending as well, so all is not lost just slower. Think of it like on a road trip and all of a sudden you drive through a small town with a speed limit of 30 miles per hour, you gotta go slow as you mosey past the lovely little burg for a bit, but don't worry that 65 MPH sign is not far off. Remember there are always those darn bumps in the road.

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Thursday March 26, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Bearish Evening Star
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2120 Support: 2060 2040
Bullish New Moon

Unemployment continues to trend lower, the economy is still growing, housing is doing better now that spring is here, and the stock market is still squirrely and without certainty. The question is what are the underlying causes? Greece? Cypress? The Fed? The Euro? Oil? Congress? Terrorists in the Middle East? Earnings? Income inequality? Or something more sinister hiding just below the surface? Dark money and high frequency trading? We may never understand the dark forces at work here, or perhaps the answer is stunningly simple.

We should ask ourselves some basic questions here, such as what could make the market rally? Do we have or expect an upside catalyst? Larry Kudlow has always said that “Earnings are the Mothers milk of the stock market” are earning good or bad? Are they growing or receding? What is the overall sentiment of where earnings will go between now and the end of the year? Is the economy trending better or worse? Many questions indeed, and so few answers. Is it human nature to be dour or joyous?

The current psychology of the market tells us that sentiment is waning and uncertainty abounds, notice I said uncertainty and not fear, with the VIX at so low a level we can at least take that word off the table and out of use. Even companies and groups that have been enjoying relative success are seeing their charts begin to break here. Perhaps the impasse is due to lack of new money available to come into the market? There is plenty of money available, literally trillions of Dollars, Yen, Euros, Pounds, Francs, and even Rubles and Shekels, so whats the holdup? Why can't the tale of greed and profits lure any more money in? Are we seeing a sea change in the overall allure of capital markets in general?

Ponder this thought, if income inequality has gotten so bad that even the wealthy realize that the common people simply do not have enough money to buy their products, the whole house of cards comes crashing down. Perhaps it is that singular fear alone that is keeping the market from going higher. All the while the wealthy and the corporations have been cutting and cutting and getting leaner and meaner, as well as adding to their giant pile of gold, the middle class, working poor, and the indigent have struggled. Wages have stagnated, in fact many who earned good salaries in the past are working two and three jobs now only to be actually earning less than they used to. They will not borrow money to buy unnecessary items any longer. Many people have simply given up the fight entirely, believing that Capitalism is a sham, there is no longer an abundance of the faithful. As John Steinbeck wrote “Man is the only kind of varmint sets his own trap, baits it, then steps in it.” Maybe we really stepped in it this time.

History of the market tells us that March and April are strong rally months, same as October through December. We saw upside at the end of last year essentially ending the year at he high. We saw some upside in February and now we have a double top scenario on the S&P 500 index as seen on the SPY chart. Someone mentioned last nigh that we are only a month away from the “Sell in May” time period, perhaps this Spring we get no gains. We get consolidation or sorrow, this happens in outlying years. If a robust second quarter does not happen, we will remain stuck range bound and rudderless for a long time.

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Wednesday March 25, 2015
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Bearish Evening Star
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2120 Support: 2060 2040
Bullish New Moon

We had mixed economic news Today, Mortgage Applications were up 9.5% from last month, Durable orders were down -1.4%, way off the expected 0.4% increase. Durable Orders impact the market more and so down we go. We also had another Crude Oil Inventory build of over 8 million barrels. The Market Bias has changed to bearish as the SPX crossed below its 20 day moving average on a bearish reversal.

The US Dollar continues on its way down as well as below its 20 DMA here, I believe the dollar may find support around 95.00 ish. Oil is rallying Today and WTIC is currently back above $48. however Oil is right at its 50 DMA which should be resistance. Fears about running out of room in Cushing Oklahoma may now be closer to reality as there is only about room for 12 million more barrels before they start going to buckets in peoples backyards. Reaching maximum capacity of oil storage would definitely affect production as production will be shuttered.

Yesterdays news of seven year high New Home Sales shows the US economy is still moving forward, and will continue as the weather improves, Durable Orders will come back as well, but apparently not just yet. As I have said on many occasions the economy is always weakest in the beginning of the year, and typically improves during the 2nd, 3rd, and 4th quarters. This happens most years and in all likelihood will again in 2015. There is no need for fear we are just not ready to rally to new highs just quite yet, it is frustrating because we all know the markets usually rally march to April. Unfortunately the issues with oil and the dollar are persistent headwinds that are most definitely holding the market back here so far, and of course uncertainty about the Fed rate hike, and Greece, oh, poor Greece. What to do?

The media will be dusting off and dragging out all of the naysayers they can find, they will prop them up on display and proclaim “The end is near” just like they always do. Just keep reminding yourself that we are still only halfway through the recovery cycle and buy the dip.

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Tuesday March 24, 2015 by Big W
Market Phase: Bullish, Market Bias:  Bullish
Last Candle Pattern: Bullish Morning Star
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2120 Support: 2090 2060 2040
Bullish New Moon

The US Dollar is down slightly again and Oil is up slightly again, so the market should be green slightly again, it sounds like a song “Slightly again” perhaps the latest James Bond movie theme song as international events may shape our day. Or perhaps we control our own destiny?

The US economy added over three million jobs in the past year, gasoline prices were down substantially, and according to the Automobile Club of America US drivers drove more miles than the previous seven years and will drive more again this year. This has spurred spending on new cars and SUVs as well as vacations and Christmas presents. Travel spending is expected to rise another two percent this year.

Money saved on gas is being spent elsewhere as predicted, if prices hold steady here Americans will have about $700 more to spend on other things. Light truck sales were up 11% last month. Wal-Mart said that their non fuel sales rose about 2% in the last quarter.

CPI came in at 0.2% just as expected, but at least we don't have deflation any more. An annualized 2.4% sounds just about right for a change. This will make Yellen and the Fed happy. I can hear all of the hawks chirping about it now.

The ECB may be happy as well, citing their bond buying as helping Euro-Zone PMI jump to 54.1 that is about as good as its been over the last four years and this may buoy the Euro for a bit. Earlier this month the Euro-zone's economic growth forecast was raised about 0.5% this upgrade caused new all time highs on a number of European indices including the FTSE, CAC, and the DAX.

Last on the list for Today is the dreaded China data, we have all heard this before, China Data!, China Data! Reuters economists polling showed China PMI at 50.6 as opposed to the official 50.7 Really that's it? That's all you got? A 0.01 discrepancy? To quote Joe Terranova from Fast Money “The Data Doesn't Mata” not when you are talking about such a small difference, besides, starting in June we will get stronger China numbers anyway.

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Monday March 23, 2015 by Big W
Market Phase: Bullish, Market Bias:  Bullish
Last Candle Pattern: Bullish Morning Star
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2120 Support: 2090 2060 2040
Bullish New Moon

So far Today Oil is up and the Dollar is down, hence the market will be green.

Saudi Arabia has said that it is pumping oil pretty much as fast as it can right into the oil inventory glut. What does that tell us? They obviously want oil pricing to go lower, either that or they are desperate for petrodollars. I don't think they are desperate at all, they are very calculated in what they are doing, They are intentionally railing the price of oil to hurt drillers worldwide, they are letting everyone know that this is their game and nobody else is allowed to play. Collectively we should push back against this economic enemy by embracing alternative renewable energy as fast as possible. All the cool Countries are doing it, Scotland, Germany and even Costa Rica. Costa Rica announced that they have been able to use 100% renewable energy to generate their electricity needs so far this year.

It is still beyond my comprehension that we are using one hundred year old technology in the twenty second century. People talk about hydraulic fracturing as the new technology that will make America boom for generations, I don't think so, in fact I see it as a means to keep us at the tit of big oil for another generation or two. Where some may see a boom, I see a leash, and a short one at that. Why must we remain in the dark ages for two more generations when we have the opportunity to break free from our economic bonds right now?

Congress put out the dumbest budget yet in an attempt to keep us in the dark as well, with increased Military spending, What are we protecting? Oil wells here and abroad? If we could just stop thinking like our grandfathers for even just a little while we might be able to see the opportunity in front of our faces. Advances in solar, wind, geothermal, hydro-electric, bio-mass, and battery technology give us the chance to change our world and our economy so much for the better its staggering, all we have to do is re-allocate money to invest in this brave new world.

Instead of buying planes that we don't need, and tanks that nobody wants, and pissing away money to foreign countries that likely don't even like us anyway. We could re-imagine the US economy, a better, stronger, longer lasting, smarter way that creates permanent US jobs that can not be outsourced. Investing in a renewable economy now, creates a strong renewable economy for the future of all of our children for as many generations as the world can sustain.

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Friday March 20, 2015 by Big W
Market Phase: Bullish, Market Bias:  Bullish
Last Candle Pattern: Bullish Morning Star
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2120 Support: 2090 2060 2040
Bullish New Moon

Well here we are, the SPX within ten points of taking out its all time high once more, only this time we are loaded for bear. We have CCI, Stochastic, RSI, MACD, and just about every other indicator showing strong buy signals and a long way to go before entering overbought status. So once again I am going to mention 2150 as my target for April. The spring is wound, the hamster fed, a fresh energizer battery installed, the crank cranked. Bears beware.

The bears are truly getting desperate, as I am reading through the news feeds and blog commentary here are a few headlines “Global Earnings Plunge Most Since Lehman”, “Why We’re Drifting Towards World War 3”, “the Good Side of Deflation”, “Crude could hit $15. Here's why”, “IMF Fears "Taper Tantrum"; “Dollar Shortage Revisited”. The negativity is abundant and in my estimation, completely worthless. Some people are so desperate to convince us that some cataclysmic correction or crash is about to happen they will say and sensationalize anything and everything. They are throwing anything they can against the wall and hoping something will stick. Not this time boys, we are wise to your shenanigans, and besides the weather is too nice except blue sky's, sunny days, and warmer temperatures.

Now that Spring is here, expect home sales and car sales to pick up, Construction projects to begin, Oil demand and consumer spending to rise and barbecues to get winter wiped off of  them and fired up. This is the downside of the hill when all things economic speed up, and markets rally. Everyone bought new sneakers and are ready to run. Well that's at least what NIKE (NKE) said with their earnings Last night.

Oil is up and the dollar is down so all is right with the world Today. Enjoy this while you can because we never know when some bear will come up with something plausible that the talking heads will latch on to. I love the sound of bears in pain, it smells like victory. Stock Report

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Thursday March 19, 2015 by Big W
Market Phase: Bullish, Market Bias:  Bullish
Last Candle Pattern: Bullish Morning Star
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2120 2090 Support: 2060 2040
Bearish Full Moon – Last Day

Two steps forward and one step back, Cha-cha-cha. The financial markets must be watching Dancing with the Stars, because its musicality is spot on, the direction changes are sharp, and it is quite entertaining to watch. It turns and spins and whirls as if beating its own tune.

Each down day has been in itself a buying opportunity for day and deuce traders. Why not again Today? Surely patterns mean something, this weeks action probably means schizophrenia. The dollar is up, oil is down, and the GLD, GDX, and GDXJ are still pinching.

Some sectors are still working into Today's weakness, Biotechnology (XBI)continues to lead, valuations, book values, and profitability mean nothing to this high flying sector whose momentum continues to carry the experimental medical group higher and higher. Semiconductors (XSD), Healthcare (XLV), Pharmaceuticals (XPH), Health Care Equipment (XHE), Retail (XRT), Software (IGV), and so far even the lowly REITs (VNQ) are moving green as the overall SPX sells off. NASDAQ is up while Technology (XLK) is down.

Congress is debating the budget, and that alone is enough to have everyone reaching for the Tums bottle. Unemployment claims came in lower again, Leading indicators show growth, Natural Gas inventories dropped again, and the Philly Fed number is weak.

This is the last trading day before Tomorrows Triple Witching meaning that stock index futures, stock index options and stock options all expire on the same day. Statistically a down day by many metrics. Best guess we finish out up for the week and above the 50 DMA still firmly in bullish phase, next week should be better as the SPX weekly chart has us reversing upward off the 20 DMA.

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Wednesday March 18, 2015 by Big W
Market Phase: Bullish, Market Bias:  Bullish
Last Candle Pattern: Bullish Morning Star
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2090 Support: 2060 2040
Bearish Full Moon – till Tommorow

The Fed spoke and said nothing. They removed the dreaded word “Patient” from their rhetoric, it never ceases to amaze me how grown adults can cry over a single word, much less a mundane word like “Patient”.  Yellen mentioned a temporary weakening of the economy. Down is up in this bizarre market and we immediately rallied. The reality of why is beyond my grasp of understanding. Are we to believe that if the Fed said good things about the economy we would have sold off? Now everyone is debating whether the rate hike comes in June or September? I am now convinced that the markets and money is all managed by Eight year old children, who are so immature and insecure they cant decide what to do.

Amazingly enough the chart essentially was correct, the SPX literally touched the 50 day moving average then bounced as the Fed spoke and now appears to want to close above the 20 DMA as well. Sometime I wonder if the chart is the predictor and the news follows or if the chart follows the news? Or is it happy coincidence that they sync up like they do? No matter, as of right now its full speed ahead and damn the torpedoes. Statistically the market rallies on expiration weeks and this week seems to be following history, up, up, and then down Friday?

OK, so we now have a green light, buy the dips and sell the rips going forward, or buy the dip and take the trip till May. Energy, Industrials, Materials, and yes, even Utilities. Use a seasonal chart for entries and go make some money.

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Monday March 16, 2015 by Big W
Market Phase: Bullish, Market Bias:  Bullish
Last Candle Pattern: Bullish Morning Star
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2090 Support: 2060 2040
Bearish Full Moon – till Thursday

Ever feel like you're getting slapped around? Friday the SPX touched the 50 day moving average and dropped like a rock, then it touched the 100 DMA and rebounded, Today we rally. The market is like a ping pong ball getting batted around like nobodies business. Hard to make any sense of it here, Head-fake, head-fake, head-fake, what is real and what is an illusion? The Vortex (7) is showing rebound, along with many other indicators, and the VIX is showing that it hit resistance and is now falling. What a cluster.

The Treasury is officially out of money and is now borrowing from Peter to Pay Paul, and not a single word out of Congress about raising the debt limit. They are not even thinking about it. Yet the market is rallying. The market just doesn't care. How the hell are any of us supposed to navigate this mess? We did not break down below the 50 DMA so stay long.

Oil is down strong and may close below the $44 support threshold, it looks as if it even retested $44 as resistance now and fell back. With all of the hoopla about demand and inventory space the market in its infinite wisdom, or its infinite manipulation has decided oil is going lower. Nothing to be done about it folks, watch $34 for next support.

The US Dollar could not get above and hold above $100 and has begun to dip here. The Euro is rallying instead, whether or not this is the top and bottom nobody knows. Let the currencies trade sideways for a while, that will work fine.

Some European indices have hit fresh all time highs, like Germanies DAX, much like the US DJIA and SPX have a few weeks ago. Funny how we rallied right along with the dollar and they rallied right into the weakness, almost makes you think that currencies have no impact on equities.

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Tuesday March 10, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Three Inside Down
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2150 2120, Support: 2060 2030 2015
Bearish Full Moon

The news feeds will have us believe that the down-slide happening here in the market is all because of a possible Fed rate hike. With every article that I read I am more convinced that is not the case. Think about it seriously for a second, the raise would be 25 basis points or 0.25% is such a small increase in interest rates worth over 500 Dow points? Or 1000? Why? Such a small increase will not affect companies earnings all that much. Furthermore I seriously doubt that the Fed will actually raise the rate during a time of deflation. US CPI has been running in the negative for a few months now, we currently have deflation. Typically the raising of the Fed rate is a tool to fight inflation and not deflation, a rate hike now would risk further deflation, a far greater risk. The Fed is smarter than that, while Janet Yellen has appeased the hawks with rhetoric, she is well aware that a rate hike now would exacerbate the problem not correct it. No the Fed has said Later rater than sooner, and so there is something else afoot here.

As of Sunday the US Treasury Department is once again out of money, Treasury Secretary Jack Lew has already sent a letter to Congress informing them to raise the debt ceiling lest we default on our debts and bills. Everyone in Congress knows this is about to happen and exactly what measures have they taken to insure our continuous operation? Of conform with the Constitution and pay our debts and bills incurred? Nothing, they have done nothing at all, not a peep, not a mention, nothing on the schedule, nothing announced, nada, zip, zilch. Last time we found ourselves in this circumstance, Congresses inaction resulted in a downgrade of the US credit rating, costing us, the taxpayers millions. I think this is the reason for the sell off in the market. We are likely to sell off harder and faster until Congress acts. The reasoning is simple, a looming US default is far more dangerous than a silly little Fed rate hike.

Congress appears to willfully be sabotaging the US, with regard to both foreign policy and economically, We have seen their disgusting politicizing of each and every opportunity, this is no exception. Companies, fund managers and traders alike all know another dog and pony show will hurt the economy yet once more and that is why we are selling off here. Potentially this may be resolved by the weekend, but not without much ado and fanfare. As the SPX drops below the 50 day moving average and into a Warning Phase, it will continue lower in a series of distribution days until the debt ceiling issue is resolved. That is what is going on here.

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Monday March 9, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Three Inside Down
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2150 2120, Support: 2060 2030 2015
Bearish Full Moon

Honestly I am stumped here, I do not understand why the Market was down on Friday nor do I have a clue why it is up Today. Momma told me there would be days like these.

On Friday we received excellent economic news for the US, The jobs report came in very strong at 295K new jobs added and unemployment dropped to 5.5% and the market sold off almost 300 Dow points. Today we hear rumblings of the Greek deal falling apart, Hawkish statements on the Fed now raising the discount rate sooner, rather than later, and we are rallying on that? Its as if the markets have gone mad, there is an old adage about wall street that “Price is truth” what I can't figure out is what truth is it trying to say?

Apple (APPL) is announcing the launch of the iWatch, is that the reason? Were there terrific earnings Today, not so much. Oil is up, could be it. Milder temperatures and sunny days are forecast fro a good part of the Country this week, perhaps that is the reason alone. We may never understand or know truly why. Officially I recommend vigilance and diligence as this may be a head fake before more selling, or it may be a “Mutual Fund Monday” as funds chase performance. Time will tell. The chart will eventually tell us the story, just not Today.

If you are worried about more downside to come, raise some cash Today, if not, just hold and wait. Eventually the market gets it right, meanwhile have a cup of coffee and let it play out. Read More

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Friday March 6, 2015 by Big W
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Three Inside Down
P&F Pattern: Bullish New High Double Top Breakout
S&P 500 Resistance: 2150 2120, Support: 2090 2060 2050
Bearish Full Moon

It looks like we have a full on distribution day Today as the market sells off on remarkably good news. We received a very strong jobs report Today and lower unemployment yet again. The trade deficit is also dropping. Yet the market does not seem to care. Fear and loathing have replaced reason and sanity. Not much we can do, just sit tight and wait for the market to find support. Remember Keynes who said “The markets can remain illogical longer than you can remain solvent”.

Oil is trading lower Today as the 20 day moving average appears to be support, this coincides with a large move up in the US Dollar. A combination of the strong jobs report and the beginning of Europe's bond buying have weakened the Euro yet again. The Dollar breakout above $97 has put the kibosh on most commodities. It seems the Euro and the Dollar are racing to parity, full speed ahead and damn the torpedoes. This type of currency environment is bearish.

The unemployment rate has dropped to 5.5% and that would be good news if half of America did not believe that the number is tainted. So many people have this unfounded belief that the Government is producing false numbers, all I can say to those people is that “Those that do not believe in something, will fall for anything”. I don't often get the opportunity to quote Malcolm X, but in this case it rings true, when someone suspends their belief in facts they are ruled by fear, uncertainty, and superstition. This is antithetical to the Vulcan logic required to trade. Until this temporary insanity subsides the bears will be in charge.

So instead of the Dollar falling off a cliff and gold going to $10,000 as the mystics and statistics said it would, we are now faced with a very different outcome, as all of the “King Dollar” junkies are rejoicing in the strong dollar the Dollar rally is now producing deflation, a far worse scenario. Time has now proven once and for all that the Hyper inflation and dilution of the Dollar that we have heard people warn and scream about over the last six years has in reality been replaced with exactly the opposite effect. I bet you never saw that coming. Now what? All of the snarky pundits are now all proven wrong and life goes on.

One good strategy suggested to me by a Market Maker acquaintance of mine is to buy strong cash flow companies as they benefit form the stronger dollar. Companies with Price to Free Cash Flow Ratios of 15 or less are a good place to start, lower is better. One such example would be Prudential Financial (PRU) with it's 2.00 P/FCF Ratio, sales growth, and improving fundamentals. I am not recommending PRU as a buy here rather to use as an exemplar for your due diligence. If Cash Flow is not something you normally look at when researching companies, I suggest you look more closely now in this environment.

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Tuesday March 3, 2015
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: NEW Bullish Rising Three Method
P&F Pattern: Bullish New High Double Top Breakout
S&P 500 Resistance: 2150 2120, Support: 2100 2090 2060 2050
Bullish New Moon till March 5th

Another new all time closing high on the SPX and another Rising Three Method Bullish Continuation pattern. That likely means profit taking Today. Every time we have a new all time closing high the market sells off a little. Today will be no exception. When I use the term grind, that is this dance that we do with the market, it is much like the teeth of an old saw than are bend in various ways, it still cuts and eventually gets the job done, But looks ugly with teeth bending in both directions. The NASDAQ is still poised to take out its previous closing high of 5048, and ultimately will best its all time intraday as well.

This is not your Daddy's NASDAQ Today's tech sector index is not hugely overvalued companies with minimal assets. In 2000 when the “dot com” bubble burst there were dozens of internet companies who's only assets were about Fifty thousand dollars worth of computer servers in a leased space, or virtually zero assets if you had to liquidate and sell all of that equipment as used. The over valuation of the intellectual component caused the bubble. Some of these basically worthless companies traded at insane valuations and market caps, it was not unusual to see P/E's of 5000, now that's a bubble.

Today's tech companies are in a much different and better place, They actually have assets now, and huge amounts of cash on their balance sheets. Oh, and as of Today a still reasonable valuation, or at least most of them do anyway. This is the equivalent of night and day when talking about stock market bubbles. With a current P/E of under 18 this is not a bubble, I don't really care what Bill Gross said.

Again the key things to watch are the US Dollar and the price of oil. A steady or falling Dollar is bullish. Bullish oil is bullish the market.

The markets may once again get distracted by the political theater being played out on Capitol hill with Israel's Benjamin Netanyahu giving his supposed war drum speech. Squirrel, where? Yes the market will be squirrely as “Bibi” lies. Beware the shiny objects.

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Friday February 27, 2015
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish New High Double Top Breakout
S&P 500 Resistance: 2150 2120, Support: 2100 2090 2060 2050
Bullish New Moon till March 5th

Technically the SPX cant seem to get above the 2150 level of resistance, yet is unwilling to drop below the R2 Pivot point of 2102 as current support. The market is speaking volumes without saying anything. As Guy Adami says “The market doesn't usually give you this long to get out” and so as a matter of principal remains bullish. The SPX's 10 day moving average has caught up with the price and may also act as support here. Double support and blue sky above. It all sounds so nice and bullish, yet headwinds remain.

The Greece deal is done and gone, watch for the sequel in a couple of months. Conflict in Ukraine is subsiding and off the front burner, The Fed has taken itself out of the equation and Oil is holding up lately. So whats the problem, why aren't we rallying? The GDP second estimate came in at 2% pretty much as expected and a damn sure better than negative. Consumer confidence rose to 95.4 Pending home sales shows growth of 1.7% and the one weak link is Chicago PMI which came in below 50 for the first time in years at 45.8 that's a problem showing possible contraction of industrial production in the Chicago area.

Brent oil is rising strongly and looks like it want's more upside here, the spread between Brent and WTIC is also rising and is now at about $12, quite a difference from below par a month ago. Gold is holding and possible rebounding off $1200 support and the dollar is trading sideways and range bound still. Watch that Dollar though as its now back above its 20 DMA and the Bollinger bands which were nice and tight are now opening up suggesting the Dollar may want another leg up here possibly to 100.00

Earnings continue to show growth and performance. Housing still recovering, most sectors are working here. So why aren't we rallying? Well there is this little matter of a partial Government shutdown that may happen Today. That is whats putting the brakes on here, and has been all week. Silly congress, shutdowns are for jerks. More Info

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Thursday February 26, 2015
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish New High Double Top Breakout
S&P 500 Resistance: 2150 2120, Support: 2100 2090 2060 2050
Bullish New Moon till March 5th

For years the screams of the ignorant masses espoused how inflation and hyper-inflation will most assuredly be the result of an expanding Fed balance sheet. Cries of “They are printing money” reverberated on all of the news feeds, Such nonsense filled the air as they all decried the Fed, The Treasury, and all of the gold bugs all attempted to out do each other as to how badly the US Dollar would fail. Peter Schiff screamed that “The Dollar will fall off a cliff and gold is going to $10,000” Pundit after pundit roared about the market crash that was of course eminent. “Buy commodities” we all heard from Jim Rogers and others. Even politicians like Ron Paul has beaten the drums of distraction with charges of “Audit the Fed” and “Buy Gold”. Guess what? They were all wrong and will continue to be wrong for some time to come. We never actually got much of any inflation, commodities for the last three years has been where money goes to die. And in fact we actually now have  a different problem altogether. Deflation, yes actual deflation, imagine that, not only were all of the naysayers wrong, they were 100% wrong and the exact opposite issue is now what the American economy now faces.

Economics 101 explains that inflation happens because of demand. Demand only happens when unemployment is very low. When everyone is working and earning, and most importantly as wages rise that gives more buying power to the masses which in turn creates demand, demand creates inflation. Once you understand this basic concept, then the next thing needed for the equation is to also understand that an expanding Fed balance sheet does not create more dollars and is and most assuredly does not dilute the dollar. People have argued against this concept with a vengeance, these same people have been wrong all along and so now reason and critical thinking require, no demand, that they change those false beliefs and accept the truth.

Deflation can actually be far worse than inflation, think of it as the value of all of your assets going down instead of up. The value of your house for instance, the value of your gold and other precious metals holdings, and yes even your stocks may fall as a result. Bonds are not immune as well as all of your assets that would normally depreciate like vehicles, only now they will lose value at a faster rate. Deflation if left unchecked can be the cause for a recession, or a depression.

How do we fight deflation you ask? The best way that I can think of would be to write and pass into law an infrastructure stimulus bill. Create demand for goods and services, put money into the economy, and increase the velocity of the money in circulation. In essence the exact opposite of austerity, or spending cuts. Logically as all of the “so called” experts were entirely incorrect about inflation, it is a known certainty they have all been entirely wrong on spending as well. Interest rates on treasuries are at multi-generational lows and it would be easy enough to borrow at very low rates, perhaps even negative rates to fund this stimulus. Europe had to learn this the hard way as they fell again and again into recession. Even now there are many that still cling to the fanciful notion of austerity. Austerity does not work, it has never worked, there is not a single occurrence in history showing that it works, and yet, the idea that somehow if its done enough times and for long enough that somehow magically it could work.

Magical thinking as opposed to critical thinking is a huge problem in Today's world and not just with economics, but I will leave off here. I implore you all to never accept a magic fix as logical over tried and true methods, science and mathematics. Superstition never wins over logic.

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Wednesday February 25, 2015
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish New High Double Top Breakout
S&P 500 Resistance: 2150 2120, Support: 2100 2090 2060 2050
Bullish New Moon till March 5th

So far this week the trading action is about on par statistically, a week Monday followed by a strong Tuesday, if the market continues to follow the norm we should expect two more up days, followed by profit taking on Friday.

Are these statistically normal times? What with all of the news about Greece, Ukraine, Oil and the Fed? Actually yes, this is about normal as there are always issues and concerns blocking or obfuscating the continuity of the market. This week is really no different than any other statistically speaking. Perhaps with the breakouts on all of the major indices we should expect a pullback? Why should we? Is that the normal course of events after a double top breakout? Actually no, there is a much higher probability of more upside than of a pullback.

We are now well into the beginning stages of the March to April rally season with most sectors and major industries above their 50 day moving averages. Even the sectors that are weak here like Utilities (XLU) are only a small percentage below and will rise back above quickly as the market gains more momentum and strength. “A rising tide lifts all boats”.

I seriously expect the NASDAQ to breach above 5000 and above the old all time high within the next two weeks of trading, during that same time I also expect that the SPX will hit my projected target of 2150 that I posted back in December. I am now of the opinion that DOW 20,000 and SPX 2250 are both feasible by the end of the year as company earnings continue to grow at a steady rate and stronger economic news is expected for the second half of the year.

On Friday we will get the second estimate of the GDP and economic consensus is for 2.0% while this may or may not be accurate I can assure you that even a much weaker number will be far better than the same quarter in the last two years. First quarter GDP for 2014 and 2013 came in negative, Fridays number may well be much weaker than expected but will certainly be positive, I even doubt anything less than 1.5% is possible.

Oil rebounding to my estimated $75 per barrel target by summer plays into this theory well as all of the oil patch stocks will surely rebound at similar rates as oil does. Oil typically trades in a ten dollar range and maybe I should quote a target in a range perhaps $70 to $80 or $65 to $75 please do not make me out a liar if it gets close. Energy is a big piece of most major indices, and always makes a formidable rally general. Read Now

These are now on Seasonal buy signals; Do not take this information as a buy recomendation
Energy (XLE)
Oil & Gas Exploration & Production (XOP) (Drillers and Independent companies)
Oil & Gas Major Integrated (IXC)

These are close but not quite on full signals, so put these on watch;
Oil & Gas Services (OIH)
Oil & Gas Pipelines (AMJ)
Natural Gas Companies (FCG)
Coal (KOL)

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Tuesday February 24, 2015
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish New High Double Top Breakout
S&P 500 Resistance: 2150 2120, Support: 2100 2090 2060 2050
Bullish New Moon

Today will be all about the Fed as Janet Yellen will be testifying before Congress, as usual this is hyped to be quite the dog and pony show, not from the Fed but alas from Congress. The fools on the hill somehow believe themselves to be smarter and should have more say and oversight of the Fed. Nonsense, the Fed needs to speak to Congress like a brain surgeon needs to speak about medical techniques to a kindergarten class. Most of the members of Congress simply cannot understand what the Fed does or how it works, but they are cock sure that they know better. Give me a break, our legislative leaders can't figure out how to make a tuna sandwich. So Today's effort in futility will go on with all of the aplomb of a kangaroo court. Ignorant questions will be asked, political theater produced. The journalists covering her testimony will record in detail what Yellen's responses are hoping to glean any tidbit of actual information as to when or how much or what the criteria will be for that first rate hike. They will likely get nothing of substance, only more generalizations and innuendo. The fact is that the Fed will do as it sees fit and Congress can go pound salt, just as it should be.

The Fed has already flashed the market a green light saying that now infamous rate hike will happen “Later rather than sooner” this alone should be enough to keep the markets stable through the first half of this year. The second half of the year is always the stronger economically and as the GDP shows more and more strength the probability of a small hike will increase. The naysayers will scream of more money printing, easing, and other blather. Our previous Fed Chair Ben Bernanke was even accused of being a traitor for doing exactly what his job description and mandates suggest. The best advice I can give to anyone about what is said at Today's grilling is to just ignore it and it will go away.

The Fed is in good hands with the most qualified and experienced chairperson in its entire history, I doubt very much she will yield to any of Congress's hi-jinks or bullying. At the end of the day expect stability of character and nothing more. A steady as she goes approach to our economy will be preached. Formulas pondered and discussed, all in all what you should expect to see if you were to watch the actual proceedings is a room full of idiots, save one, full of sound and fury signifying nothing.

The markets will follow with that same steady as she goes attitude and since it is Tuesday may actually close with some green on the board. Good luck Today.

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Monday February 23, 2015                                                                                                                                                                                                                                  Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish New High Double Top Breakout
S&P 500 Resistance: 2150 2120, Support: 2100 2090 2060 2050
Bullish New Moon

The market is very bullish as all of the major indexes are currently now on Point and Figure Breakouts, The INDU, SPX, and the RUT are on Double Top Breakouts and new all Time Closing highs, while the COMPQ is on an Ascending Triple Top breakout, approaching the 5000 mark, from there a new all time high above the previous high of 5132.52 should be possible. It should get there within the next two trading weeks. As we have seen again and again, as soon as we hit new highs, some profit taking happens and we get a down day or so, many traders will not put new money to work here and wait for that pullback. So we will likely grind higher in small fits and starts. Unless a clear catalyst emerges.

The European indices are doing quite well also with the FTSE DAX CAC all at new highs of their own, while the MIB IBEX are on breakouts and columns of X's they still have a ways to go for all time highs.

Greece will no longer be an upside catalyst, the deal is done, and who knows what the exact terms are and or if it will hold or succeed. This is unimportant other than expect news about Greece to rear its ugly head once in a while and bomb the tape.

Fighting in Ukraine did not stop for even a second, that whole talks thing and cease fire agreement in Minsk Belarus was nothing more than political theater, so that also will not be an upside catalyst. Continued military activity will only fuel uncertainty.

The US Dollar is at least trading sideways for the moment, which is good, weakening would be better. The Euro may be basing which is also good, rising is better.

The Fed has taken themselves out of the equation with talk of “Later Rather than Sooner” with it's rhetoric. Janet Yellen will find creative ways to say good things about the economy without being too hawkish. This in effect is a green light for the markets but nobody is stepping on the gas, or at least not just yet, they may have their foot off the brake though.

Oil is the last of the four horsemen and will likely dictate the direction of the market for some time to come. This may be our catalyst folks, I expect the price of oil to rebound until Summer and with that the energy sector will rally as well, if that is not enough to rally the entire market it will at least be enough to stop any major sell offs. Oil touched the $48 handle earlier Today and I expect that short term support to at least hold for now. So goes oil so, goes the market.

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Friday February 20, 2015
Market Phase: Bullish, Market Bias: BullishLast Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish Triple Top Breakout
S&P 500 Resistance: 2100 2090, Support: 2065 2040 1990
Bullish New Moon

While the SPX plodded along this week at a snails pace, something happened over at the NASDAQ, it broke out with gusto. Now sporting an ascending triple top breakout on the Point and Figure chart. AAPL led the charge in technology. What a beast! Since it's Friday I expect profits to be taken. We still need a pullback off of the highs to rewind the spring. There is some hope that the NASDAQ will ultimately grind on toward 5000 and drag the other indexes kicking and screaming up along with it. Watch the next two weeks.

Wal-Mart (WMT) and Greece have something in common, nobody cares about either of them. Both are mediocre, pale in comparison to their peers, and think that they have more importance than they really do. At this point with Greece traders are so tired of hearing all of the worst case scenarios and probable outcomes, they have all become comfortably numb and have adopted a what it is, is what it is attitude. Wal-Mart had lackluster earnings and is now the reigning champion of companies that Americans hate. Apparently the mistreatment of everyone's friends and family that have the unfortunate luck of working for them is now coming home to roost. The announcement of raising wages is now too little, too late. This ploy will not fool anyone, it still sucks to work for them. How arrogant of them to think a small raise is going to fix a decade of abuse.

Oil is following its 50 day moving average down and NatGas has just pulled above its 20 DMA with the extended cold weather. Doctor Copper is holding above its 20 as well. The US Dollar and the major commodities are going nowhere fast. Yesterdays oil inventory build is a headwind. Gold is still hovering around the $1200 mark. See more ______________________________________________________________________________________________________

Wednesday February 18, 2015
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish Triple Top Breakout
S&P 500 Resistance: 2100 2090, Support: 2065 2040 1990
Bullish New Moon


Another lackluster day where the market can not rally to new highs, yet is unwilling to go down. Some profit taking and re-positioning is still happening, but alas no fireworks. Perhaps Today's economic news is tempering exuberance. Mortgage applications are down again strongly with a -13.2% drop. Housing starts and building permits while missing their respective target estimates were still reasonably strong. Producer prices dropped -0.8%, Industrial production was weak growing at a snails pace of 0.2%, Industrial capacity came in the same as last month at 79.4%, and the Fed basically said that they are in no hurry to raise rates.

Housing is at least maintaining the status quo, the trend is still intact just not improving fast enough to get anyone excited. Real estate is a good long term investing idea as it is still recovering from the recession. Housing and real estate have not even come close to rebounding back to where they were in 2007 so should continue upward for many years to come. Low interest rates have helped, but a paradime change of the younger generations is keeping demand down. Millennials and Generation X ers are still having enough problems getting and keeping steady jobs and don't see home ownership as a benefit, many want to remain mobile in order to chase employment.

Weather may be part of the malaise in housing as well, think about it who in their right mind would be out buying a hose in all of the snow that we have seen across the country, mush less the very cold single digit temperatures. There is a reason that housing sales are stronger in the Spring season. I predict the housing market will heat up with the thaw.

Oil came close to that $54 upper resistance and began to fall, it seems likely that it will stay in that $48 to $54 range for a while. Crude inventory Tomorrow at 11AM EST may give us a glimpse into actual organic demand as opposed to machinations. Quite frankly I would not get too excited no matter what the results are. Correlation suggests that the market wants to rally with oil, we have seen this many times before, it suggest that organic economic demand follows demand in gasoline and diesel fuel. This demand and pricing should improve between now and June. Watch for it.

March and April are typically strong rallying months for the market, February is, or can be transitional. We have just seen the SPX break back out above its 50 day moving average. At some point a re-test of that support will happen, after that is confirmed money should flow in and the rally's legs will begin to stretch. Until then expect slow moves within tight ranges. It is the season of the sideways crab.

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Tuesday February 17, 2015
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish Triple Top Breakout
S&P 500 Resistance: 2100 2090, Support: 2065 2040 1990
Bearish Full Moon (Last Day)

Traders really have a problem Today, what to do? Should I buy into the rally on the hope for a breakout above SPX 2100 resistance? Should I sell on the news that the Greek bailout talks seem stalled. Ukraine cease fire? Is the market toppy here? I suggest do nothing. Do absolutely nothing and wait for the market and the charts to tell you what to do. Don't listen to the pundits, those talking bobble-heads, Don't go with your gut, guts are rarely right.

Here is a simple strategy, keep your longs unless they signal sell criteria on their charts. Only buy something that has strong buy signals on their chart. Listen to no one and do what the charts say to do. We don't need crystal balls, or magic 8-balls, or chicken bones or dice. Yogi Berra said it best “You can see a lot by just looking”. An SPX close above 2100 means more up side to come, a close below SPX 2070 means a reversal downward. Let the cards be shuffled, and see what the hand shows. Play the cards you are dealt and never panic. Use Vulcan logic. There will be time and opportunity to react to whatever the day brings us.

Watch the US Dollar, Oil, and the indexes Today, something will either rally or reverse. Since this is the first trading day back from a holiday weekend it is very hard to tell what the traders will do here. By Tomorrow we should have a much clearer picture. A lot of news came out over the weekend, most of it is fairly inconsequential. How the street perceives it is important. Germany is standing her ground and so is Greece, but they are still talking, so anything is still possible. Will the cease fire in the Ukraine hold or will the fighting continue, no way to know, Russia was still rallying last I saw. What will Today's earnings bring us? Personally I am going back to bed, wake me when its all over.

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February Lucky Friday 13, 2015
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish Triple Top Breakout
S&P 500 Resistance: 2090, Support: 2065 2040 1990
Bearish Full Moon

The market broke out to the upside on the news that there is a ceasefire agreement out of Belarus, a first step to peace in the Ukraine. OK, so one of the four horseman of the market apocalypse stopped for a drink. Three more to go. So you might be thinking its all good we will just rally from here. Not so fast there flash, it is Friday the thirteenth and we all know that traders are a just a wee bit superstitious. It certainly would not surprise me if there was profit taking on a Friday, but add a thirteen to that and who knows? We had a good week, we broke out, traders are after all traders and they may very well decide to lock in their gains for the week and take a long weekend. The market is closed on Monday and human nature being what it is, take the money off the table and take the family away for the weekend. We probably get a down day. We might even rally up the five more SPX points to the all time high, heck we might even break the high, the real test is whether we hold the gains or succumb to the inevitable Friday sell-off?

Many companies had big up days this week and others hit new highs, they are all fairly over bought here and a down day is in order, Apple Computer (AAPL) for instance had three gap ups in the last four days and hit the top Bollinger Band, it's probably due for a down day, but since it is about twenty percent of the NASDAQ 100, it may drag the whole index down with it.

A down day is not necessarily a bad thing, with stocks it is inevitable, the more important issue is whether we can hold above what was previous resistance of 2065? It took four tries to get above that level and now should be strong support.

Oil rebounded as WTIC held it's 20 day moving average, now it may try to breach $54 again. An up day in oil may once again rally the market with it. NatGas on the other hand failed miserably at its 20 DMA as resistance.

The likely outcome Today is a roll of the dice, we may have a split index day, some up, some down. In this event there wont be much movement and a small transitional candle is possible. I give this scenario the greatest probability of happening. We could rally and close on new highs, this is the second most likely outcome. Lastly we could sell off hard and breach below the breakout level. This has the slimmest odds, but I cannot take it entirely off the table. I have to quote my oldest Daughter here who usually remarks it's always a 50/50 chance, either the market is up, or it's down. Good Luck all. More Info

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Thursday February 12, 2015
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2090 2065, Support: 2040 1990
Bearish Full Moon

There are four main issues that are currently driving uncertainty in the markets.

1. Greek and EU negotiations
2. Russian Ukraine negotiations
3. Oil
4. The Fed

Greece's new finance minister Yanis Varoufakis is negotiating with all of the Euro-zone ministers in Brussels, and while news snippets of a tentative deal, or not, leak out from time to time, at least they all agree that they are still talking. That's good, if they are still negotiating there is still a good probability that some deal or compromise may yet be done. The latest news is that they will continue talking until Monday, then the world can end. Either way we will have a resolution of this issue one way or the other next week.

President François Hollande of France, Chancellor Angela Merkel of Germany, President Vladimir Putin of Russia, and President Petro Poroshenko of Ukraine are all in Minsk, Belarus attempting to negotiate a cease fire in the Ukraine. Like the drama in Brussels, as long as they are all still talking, hope for a truce may yet be possible. This issue may not be resolved soon, or ever for that matter, rather it may be a continuing bone of contention much like the Israel Palestinian issue in Gaza. Over time its impact on the markets may lessen.

After Oil hit $54 and reversed downward again, all of the cockroaches and rats are jumping on the “Oil is going to $20” bandwagon. Citibank, Goldman Sachs, and some others are all calling for weak demand and lower oil. Meh, what the heck do they know? Goldman Sachs raised its oil target to $200 at the top in 2007. I don't know if Citibank has ever been right about anything. Why do people listen to these firms? It's not like they got real estate, CDOs, MBOs, EIEIOs, directives, swaps or anything else right. Correct me if I am wrong here, but didn't we have to bail all of these idiots out to the tune of tens of billions of dollars after all of the mistakes they made? Don't trust them now, or ever, they are likely shilling their own prop desk book here. Obviously they are still short oil. Short and greedy, nothing more. They are not your friends. If the chart shows a break down below $44 then Oil goes lower, until then, pretend that they are already wrong.

Last on the list is the Fed, which under the Direction of Janet Yellen is the least of all the problems, with a continued weak economy and wages the Fed will act later, rather than sooner, and yes they will raise the discount rate at some point in time this year, it will most likely be in the second half when the economy will be at its strongest and most ready to accept the hike, and the amount will certainly be twenty-five basis points or less, no way the first rate raise will be more than 0.25% No way, no how. Such a small move into a 4% or stronger GDP will not bring about the downfall of the free world.

All of these issues will eventually clear up, go away, fade, get put on the back burner, or just simply not matter any longer. As that happens the opportunity for the market to rally increases.

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Wednesday February 11, 2015
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Rising Three Method
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2090 2065, Support: 2040 1990
Bearish Full Moon

There were quite a few earnings beats Today so far. Some big bad bada bing beats. PEP TWX GNRC AOL MOS ZTS WU AKAM ARMH. As profits and earnings continue to roll out more and more wins, nobody seems to be noticing. Its as if they don't count anymore, what gives here? Are we so distracted by the antics of Greece and the Euro zone to see what is going on right under our noses? Is it a media conspiracy? Or is it a case of once again traders are distracted by looking at the shiny objects? It is more a case of focusing on what could go wrong as opposed to what can go right. Money managers are noticing and moving money towards the stronger companies they are all just being a little hush hush about it all, hoping nobody notices.

While everyone and their brother is laser focused on Oil, I am watching the Baltic Dry Index (BDI) which just hit a low not seen in twenty-eight years, and NatGas which is also at a multi-year low and maybe looking to bottom here, after all it's cold outside baby. Boston has record snow and is getting another foot of snowmageddon this week. The BDI is a tell for the dry shippers and a check of the SEA ETF shows a possible basing pattern as well. This is their time of the year to work so keep an eye on them. A few NatGas plays have breached above their 50 DMAs here and may be worth watching as well APA APC APL CHK CLNE DVN EQT WPRT. Not all, but some are showing signs of basing and reversals.

The upside momentum of the US Dollar is astounding, once again the USD looks like it found support at its 20 DMA and wants more up. Is this a sign of a strong US economy or more of a weakness in Europe? Does it matter why? I would not be betting against the King here. Doctor Copper is quite another story, after what looked like a bottom last week has now turned into a dead cat bounce as it walks down the 20 DMA and may want to re-test that $2.40 ish level one more time. Check Out

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Tuesday February 10, 2015
Market Phase: Bullish, Market Bias: Bullish
Last Candle Pattern: Bullish Stick Sandwich Reversal
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2090 2065, Support: 2040 1990
Bearish Full Moon

I have said many times how oil trades in a ten dollar range, The last two weeks prove once again how true this is. Iintra-day oil did trade a $43 handle, if you use a point and figure chart set to “Close Only” support reads at $44, so it makes perfect sense that we should see resistance at $54 which also coincides with the 50 day moving average. Now we must wait to answer the following questions, will oil break out above $54? will oil re-test $44, or will it break down below $44 and the next downside target is $33? Citibank is predicting $20 so the contrarian in me says oh, well then the bottom is probably in. I don't know how good their track record is, but I wouldn't trust Citibank to predict rain on a stormy day.

The SPX held its 50 day moving average so far. We need to see a close above 2070 before a re-test of the highs. We need a reason for stocks to rally. I can through out all kinds of interesting statistics like how the SPX over the last two quarters 69% of the five hundred companies beat on earnings and so far this quarter with about four hundred already reporting the beats percentage is 72% an improvement and overall point of reference. I could quote Larry Kudlow and say “Earnings are the Mothers milk of the stock market”. Or that general economic news has been trending better. The reality is that may not be enough in the short run to get the rally started. We need some sort of bang whiz excuse, some catalyst, some news, maybe Greece and the EU will kiss and make up. Maybe Czar Putin will have a change of heart on Ukraine, maybe we will get some “Good” China data for a change. Or more likely the Euro will stabilize here soon after a brutal nine months and find some support, or vise-versa perhaps the Dollar will consolidate and stop going up for a while. Or as what usually happens with the market the fear and loathing will subside and greed will once again take over.

We need to see the Transports (IYT) rally now after hitting support at $155 about four times now, Metals and Miners (XME) need to rebound, Financials (XLF) begin to see some love above its 50 DMA, Oil Services (XES) needs to start working after its multiple bottom at $25, and Utilities (XLU) find support at the bottom trend-line. Most especially the IYT and XME, when they begin to rally the Dow30 should begin to rock the Casbah as well. An old school Dow theory is that the DJIA, the transports, and the metals and miners all make up the 3 legs of the rally stool. You always have to respect the old school.

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Monday February 9, 2015
Market Phase: Bullish, Market Bias: Bearish
Last Candle Pattern: Bullish Stick Sandwich Reversal
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2090 2065, Support: 2018 1990
Bearish Full Moon

Europe appears to be getting railed after a spat between Greece and Germany over negotiations of the EU's Greek bailout. Germany insists that Greece hold every last little bit of the austerity deal, So Greece demanded war reparations from WWII. Oh snap! Apparently Germany has never repaid a loan made to them from Greece in sixty years. Oh and Germany owes Greece reparations for four years of occupation that devastated Greece's economy and banking system during the war. Somehow we knew Nazis were gonna come up in this argument. Greece is basically telling the EU and Germany that they have more to lose than Greece does. Talk about the mouse that roared.

And Russia's Stock market is roaring right along with Greece and oil. Russia is attempting to make trade deals that circumvent the US Dollar with Egypt and North Korea. Any rebound in oil will directly help the Russian economy. Enjoy the bounce while it lasts as their GDP is expected to shrink by 5% or more this year, the Ruble is close to record lows, economic sentiment is falling, and they have no access to financial markets in the US and Europe. The Russian bear wont back down, it never does, good luck Ukraine.

All of these revolting developments have traders on edge again, US futures are down as of very early this morning. And after the SPX hit its proverbial resistance once again on Friday the bias is bearish, a prelude to an ugly Monday. But who knows for sure? A rally in oil could buoy the markets again Today. The risks are real the fear is not. The VIX may bounce a few points here, but just that, a few points, the VIX just like the SPX is range bound in a channel and gives no indication of a breakout or breakdown, at least not for Today. Maybe the best strategy is to sleep late Today and Tuesday may give us the real story. More Info

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Friday January 30, 2015
Market Phase: Distribution, Market Bias: Bearish
Last Candle Pattern: Bullish Piercing Line
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2090 2070, Support: 1990
Bullish New Moon

Even though the SPX hit the proverbial support line of 1990 and is now showing a high reliability bullish reversal pattern, I am not convinced the market will actually reverse here. Call it intuition, more of a gut feeling that the over abundance of negativity will not be overcome so easily this time. A backlash of Austerity thinkers who are so afraid of the new found support for anti-austerity in Europe. Calls of the Commies are coming, the Socialists are coming, the Nazis are coming, the Euro will crash, Greek Contagion, OMG there will be a toilet paper shortage. Hoard Toilet paper, the end is near. Such buffoonery in the news feeds like I have never seen before. The right and the extreme rights heads are literally exploding with fear mongering. A sad fact of life is when they don't get their way they immediately attempt to scare everyone back to thinking like they do. Their master plan appears to be working for now, Asia is selling off, Europe is also, and we have seen the strong distribution days fear can generate in the US markets as well.

I pointed out the other day at one of my Rants that if you pull up a chart of the French CAC Quarante index you can not determine when President Francois Hollande and the Socialists won that election. You, nor anyone could do that, you have to look up or know exactly when the election was. In fact the French Index after a short two week honeymoon, began to go up, and there has been a substantial rally since. Fear in the markets many times is made up for political gains, not monetary gains. Such a foolish notion. Don't they know that greed will eventually win out?

The stock market in general actually does better when left leaning leaders are in office. More S&P 500 gains have been realized under Democrat administrations than Republican here in the US. Don't take my word for it, look it up, even Forbes magazine admits this. Anti-austerity is actually pro-growth policy, call it trickle up economic policy if you want. The reality is that when the working class goes back to work and earns more money the entire economy of every Country benefits from the stimulative effect. There is no reason to fear the natural and inevitable swing of the pendulum. Use it to your advantage and learn to trade it. Many believe and so do I that the US 2016 elections will be won by the left, that may be the ultimate catalyst for DOW 25,000 or 30,000 for all we know. Even if the US recovery is slowing, the recovery will continue and so will the secular bull market that we have been enjoying over the last six years, we are somewhere around the half way mark, dips and corrections happen even during the strongest bull markets and years.

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Thursday January 29, 2015
Market Phase: Distribution, Market Bias: Bearish
Last Candle Pattern: Bearish Reversal one Black Crow
P&F Pattern: Bearish Column of O's Reversal
S&P 500 Resistance: 2090 2070, Support: 1990
Bullish New Moon

We could be at a triple bottom support here, or about to be a triple bottom breakdown. Earnings have been disappointing with some bullish exceptions. Traders seem to be of the belief that the US recovery is weakening. Global growth concerns abound. While this is to be expected in the first quarter of the year, the markets seem to be predicting a more dour turn is in our future.

Ever the optimist, I still believe that this will prove to be yet another buying opportunity in what has been a series of buyable dips since 2009. However it does not make sense to buck the herd here. Sell the rips and look for shorting opportunities on those same rallies. The 20 day moving average has crossed below the 50 DMA and as such now puts the market into a distribution phase, the bears are clearly in charge at the moment. Watch the 1988-1990 SPX level to see if that will once again be support, a lower low Today or Tomorrow means more down to come.

The US Dollar is not done showing its strength yet, and commodities may be capitulating  to the king. Gold, Silver, Platinum, Palladium, Oil, NatGas, Corn, Coffee, et al. Are having difficulty maintaining upward momentum. If oil closes below 44.00 we will have another double bottom breakdown and potentially another $8 to $10 drop ahead. Even home sales can't keep upside momentum, although in all fairness, people generally do not buy houses much in December and January, when the spring weather comes the buyers will come back. Read More