Monday, August 3, 2009

Lets Look At A Few Charts

Take a look at the three charts and draw your own conclusions. Some road signs are there and some are confusing because of the manipulation.

The first chart is the monthly I showed you last week.


1) RSI 5 and 14 appear to be leveling off just short of the trendlines.
2) Bull cross in F Sto and upward trending Slow Sto - not looking like a turn yet.
3) MACD about to bull cross (usually a confirming indicator IMO). MACD at -113.54 and signal at -114.41. Histogram almost positive at -.863. Will the HIST go positive?
4) MA10 is now upwards sloping.
5) Monthly MA200 is at 1016 just above the current price. See chart below for the last time the 200ma was penetrated (I love that word) in 1974.
6) Positive buy vol is declining.
7) TRIX is still headed south but narrowing (lagging indicator IMO).
8) SPXA50 is at 436. That is 436? 436? Yup. 436. The last time it was this high (438) was in April of 2003 right after the last bubble burst. Really? Yeah, really.
9) ChiOsc is stratospheric nearing pre-bubble burst levels.

So what does all of this say? Well, not much because there are conflicting signals. the chart has a ton of similarities to the end of 2003 when the last bottom happened. On the other hand you can cherry pick some similarities to the last top in 2007. Given the overbought scenarios in the WEEKLY and DAILY indicators, a turn should be happening sooner than later. I am still going with my prediction we top in October after a good move south soon.

For those that say this last bottom did this and this other bottom did that need to realize history is a good guideline, but this time is different. This is a true financial crisis like nothing we have ever experienced nor will we again in our lifetimes. We once had a savings rate of -1%. We were the world's consumer. Our consumer is dead and there is no one that can step up to take our place. There is nothing that I can see that will readily put 10% of our country back to work and more factors that will continue putting people out of work. The debt can not be supported and the failure of treasury sales is your first clue that this is ending. The HFT, accounting fraudulent, government sponsored rally we are experiencing is pure bullshit.

CHART viewed better here.

Bottom in 1974 - the last time the 200ma was penetrated (hugh, hugh - he said penetrated) in 1974. Just to give you an idea of "what happened the last time this happened" LOL.

The following is a chart from 1928 thru 1944. The last great depression. If we don't go crashing to new lows, I expect something like this to play out with what I would call an L shaped recovery over an extended period of time as everything resets and we work off the excesses in the system. In this chart you can also see the channels I have for the LT trends. The market is currently near the 50% line of this channel (thus plenty of room to fall with the 75% line near 450 and the lower line near 300).

GL trading.


  1. is that a Shanky Square ? :-) ( the opposite of a Kenny dot i guess )
    $$ 1- SPX Daily Indicator Chart[s165700978]&disp=P

  2. Why yes it is. It is a LOT BIGGER allowing for more room for error. It sure is more colorful and IMO much more creative. I have not (TM)ed it yet.

    Looking at things I may move my target back to Septemeber. May.


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