Sunday, January 17, 2016

SPX: Death cross imminent and current EW count

A well known and widely followed trend following strategy  is the MA crossover(Moving Averages: Strategies).You can clearly see in the next chart that we are very close to a cross of EMA(21) below EMA(55) a.k.a death cross.

But wait a sec...Mr Market is a bit kinky and likes surprising us.We believe (based on our current count on SPX) that soon we will see a bounce towards around 2040

Saturday, January 16, 2016

Gold:SPX ratio persistent RSI divergence and lessons from the past

We believe that Gold will outperform SPX for the next couple of years.As we note to the following chart of Gold:SPX ratio,during the last three years of Gold bear market back in late 90's there was a massive divergence between RSI and price.This divergence lasted about 3 years before the start of the massive gold bull run from 1999-2011.Similarities with these days are obvious: Again a huge divergence on RSI and a rounding bottom of Gold:SPX. 3 years since the beggining of the current divergence will be on spring-summer 2016

Friday, January 15, 2016

Oil: Time for a pause of the current downtrend?(a.k.a Wave IV)

Our LongTerm projection for Oil remains unchanged(Oil update: Approaching a short term reversal point).Today we are presenting 2 of our favorite possible pathways for Oil

Pick your poison... 

Tuesday, January 12, 2016

Taking Copper down to CHINAtown

We believe that copper will follow (or lead) China(China: The Road to Perdition) to significantly lower levels.
The following chart is our current view on Copper (the chart is pretty much self-explanatory)

Sunday, January 10, 2016

China: The Road to Perdition (该毁灭之路)

Currently China's stock market is in a 5 wave down impulse wave.We believe that after breaking down from a weak support at current levels HSI will move fast towards around 18.500 initially.Then a small bounce and after that a push towards 15500-16000(end of Wave III).
 Zooming in 

Wednesday, January 6, 2016

Oil's slippery pathway

A quick update on our view on oil for the next couple of weeks.We believe that oil will soon rebound towards 39$ after briefly touching 33.5$.

Sunday, January 3, 2016

SPX around 2500 by year-end? Yield curve chart points towards 2017 for an equities top

Yield curve (Yield curve wiki) is  broadly perceived as a leading economic indicator.Specifically an inverted/flat curve has signaled many times since 1970 a market top and a subsequent recession

The above chart shows the difference between 10-year yield and 2-year yield.A zero or negative reading means a flat or inverted yield curve respectively.During 2000 top and near 2007 top of equities market the difference was zero to negative, signaling a market top.

As we can see from the above chart, 2-year yield is in a steep rising channel, when 10-year yield is in a descending channel.A projection of these two channels shows a convergence of them (a.k.a a flattened yield curve, a.k.a an equities market top)  in 2017.

Will 2016 be another painful year for bears or this time will be different?

Friday, January 1, 2016