Tuesday, July 29, 2014

Value Line Geometric Index: Destination Reached....

Value Line Geometric Index just reached (and bounced) a major resistance line from 00's.The previous 2 times (1998, 2007) that XVG touched that line, a severe bear market for equities ensued."Is it different this time"?

Friday, July 25, 2014

Gold and Palladium update

Gold managed to stay above 1290$ but below the descending resistance line from mid-July.In order to establish its upmove potential gold must move above 1320$.(Blue line represents a possible bullish scenario)

Palladium (PALL) is moving up(inside an ascending channel) currently above the mid-channel trendline.

Bonds out of the woods...

Finally bonds break out from a consolidation trading range...

And of course junk bonds(HYG)...moving towards 92

So guess  where equities are heading to....

Thursday, July 17, 2014

Bonds Update:TIP>TLT,LQD>HYG

Inflation protected treasuries (TIP) are in a  better technical state than 20+ year Treasuries(TLT) and Investment Grade bonds (LQD) which are in a far better position than junk bonds (sorry...high yield) (HYG).

TIP(bullish):As long as it stays above 113,5 it is bullish. 2 possible bullish scenarios.1 Scenario(Blue) TIP bounces at 114,6 and breaks out towards 118-118,5. 2 Scenario (Grey) TIP moves towards 113,5 where it bounces and possibly start moving towards 118-118,5

TLT(neutral-bullish): Neutral between 110,5 and 114.Above 114 bullish.Same 2 scenarios like TIP. 1)TLT bounces at 112,4 and breaks up. 2)TLT moves towards 110,5 and then continues its ascend.  

LQD(Neutral): Today or tomorrow is a make it or break it day for LQD.If it manages to break 119 it will probably move towards 120(blue).If it breaks 118,5 then it will move towards 118(grey).

HYG(neutral-bearish):HYG is moving towards 93,9 where it will probably bounce towards 94,5 (or even 95).HYG seems like forming a Head and Shoulders pattern with target at 92,5 and then 91,5(blue) (or even 90 (black)).

So tough times for stocks are coming?

Wednesday, July 16, 2014

Gold Update

A quick update on Gold.Gold broke yesterday the ascending trendline from early May and is now moving underneath that line.It will probably move for the next 1 or 2 days towards 1309 where it should bounce and start moving quickly towards 1267 and then 1241$.If Gold manages to stay above 1314$ it will have the opportunity to move towards 1340$

Sunday, July 13, 2014

Europe: 2 possible scenarios

2 possible scenarios for European stocks (VGK):

Scenario A (H&S)
Currently start forming a Left Shoulder:

If the above scenario plays out then targets are 45 and maybe  even 34$.We favor this scenario

Scenario B (Trading range ~54-60)
This is a rather neutral scenario although we believe that if it plays out , it will be followed by a gradual descend towards 50 and later on even 44$

Friday, July 11, 2014

Gold-Gold Miners Update

Just a quick update...
Gold is now in a short term uptrend heading towards 1380$ where it will probably bounce and correct towards 1315$

Similar situation for the miners (GDX).GDX has just broke a declining resistance line (weekly chart) currently at 26,18. GDX will bounce again at 28$(or  a little higher) and correct towards 26$ to test the break-out.

Tuesday, July 8, 2014

Palladium and SPX cycles

Palladium ($PALL) is in a clear uptrend after breaking out from a consolidation pattern early this year which is in line with our prediction for significantly higher prices of palladium in the following years (http://goldenopportunitytrading.blogspot.co.uk/2014/03/rising-tension-between-west.html).Palladium relative performance to SPX seems to follow an aprox 6 year cycle.Also there seems to be an interesting symmetry in this chart(pall:spx).If symmetry does truly exist we expect a relative outperformance of palladium over SPX until late 2017- early 2018.

Zooming in the PALL:SPX chart we notice that 
PALL:SPX is currently in a downtrend (SPX outperformance). However price of PALL:SPX already pierced 55 week EMA during late 2012 early 2013 and again
this year (April until now). We believe that Palladium soon will begin outperforming SPX.

Blue Line (very bullish scenario)
Green Line (Bullish scenario) 

Wednesday, July 2, 2014

SPX ready to correct and form a Left shoulder?

Yesterday SPX almost touched our target of 1980 (http://goldenopportunitytrading.blogspot.co.uk/2014/03/a-deja-vu-for-spx.html). SPX is getting overbought at daily and weekly timeframes (RSI>70) with negative divergence especially in daily RSI.

 VIX probably is forming a diamond reversal pattern, which means increased volatility for the next days-weeks, consistent with a deep correction.

We believe that SPX is almost ready for a substantial correction towards bellow 200 EMA(weekly) around 1750.

If this scenario finally plays out, 1980 will probably be the left shoulder of a huge Head and shoulders pattern for SPX.

Tuesday, July 1, 2014

2 scenarios for Agricultural commodities (DBA)

Agricultural commodities ETF (DBA) price is confined within a descending triangle from 2008.There is an approximately 3 year cycle from top to top and from bottom to bottom.If this pattern continues then the price may hit its final bottom at 24$ in mid 2016. (Bearish scenario).However if DBA manages to stay above 26$ and break the descending resistance line from 2008 it may then complete an inverted head and shoulders pattern and break out of the triangle towards 34$ (bullish scenario)
Bearish Scenario
Bullish Scenario