Bond CEF Update: Liquidity is Plentiful

Guest Post by Tom McClellan

Bond closed end fund A-D Line
April 24, 2014

Back in September 2013, I was calling attention to the liquidity problems to which bond-related closed end funds (CEFs) were alerting us.  The financial markets got over those liquidity problems, and now the message is that liquidity is very strong.  The stock market should be the ongoing beneficiary of that strong liquidity, for as long as it lasts.

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Nasdaq 100 Still on Plan?

Yesterday we noted that the Nasdaq 100 was still on its bounce plan to 3600.  Then Apple came out with cheery words about how under valued its stock is (I do not necessarily disagree) and zoom, there goes the NDX… and it is still 100% on plan; and the plan is bearish.  Not that it cannot change (these are the markets after all), but nothing has changed yet.  NDX is getting up into a lot of traffic in the 3600 area.

ndx

Gold and Silver Slam Support

Gold and silver dropped hard into support zones.  Silver’s support zone meant only everything, and thus far it holds.  I am not sure to what degree Ukraine hype plays into this.  What, was Ukraine not going on a few hours ago when the metals got hammered in London?  Anyway, we can chase hype around forever but the fact is that these metals hammered projected support zones and bounced this morning.  Time to be paying attention to what they do now.  Here’s silver…

silver

Gold Price 1270

[edit, 9:53 US Eastern]  Somebody’s already bought almost a day’s worth of SLV (last 10 days’ avg. volume) in the first 20 minutes.  GLD more than half its 10 day volume.  I guess it was not just the amateurs waiting for support to be tested.  Just hope it’s not Ukraine related.

Well, NFTRH was not able to say whether or not the gold price would stop at the obvious support target of 1270 or not, but it was obvious that it would be tested.  From #287:

“The long anticipated support line [1270] draws gold like a magnet. Whether it will hold is for soothsayers and gurus to answer in advance. But it is likely to be tested.”

The other day I read something from a gold booster who writes with a certain authority, a certain surety that gives the impression that the way he calls the gold market is the right way and above all others.  After all, he kept the troops bullish all the way down last year with Indian Wedding this and bullion banks that.

The other day he called people looking for lower prices on gold “amateur technicians” even though 1270 was obvious.  Chalk one up for the amateur technicians.

gold

TSX Venture Index Support Test

The TSX Venture index (CDNX) tested important support last week and thus far this week is positive.  I actually bought my first ‘.V’ today in a long while.  Canada’s TSX is bullish and this is Canada’s wild wild west where speculation is concerned.

cdnx

TSX-V, weekly chart from NFTRH 287

Nasdaq 100: Still on Plan

At this point today is just a resistance point on the recovery rally off what may now be considered a neckline at 3425.  Something as bearish as a Head & Shoulders, if it comes to be, would have needed a counter bear trend burst of enthusiasm to make a right shoulder, and that is what happened over the last week or so.  Well the burst, not a shoulder (yet).

Our target was 3600 and NDX certainly has the ability to take a short term pullback and then hit and exceed 3600.  But the overall setup remains bearish even if another leg upward comes about but puts in a top lower than the would-be Head.  That would be a fine shoulder.  The pattern does not actualize until the neckline way down there at 3425 is taken out.  But it’s something to keep in mind.  That could be some healthy downside maybe sometime this summer.

ndx

What Will 12.31.14 Headlines Look Like?

Guest Post by Elliott Wave International

The financial forecasts around the end of 2013 brimmed with optimism. Here are just a few examples:

  1. Many scoff at notion stock bubble exists — Associated Press, Nov. 19, 2013
  2. Economy Entering New Year on a Roll — Bloomberg, Dec. 25, 2013
  3. ‘We have entered a 15- to 20-year bull market’ — CNBC, Dec. 30, 2013
  4. Economy poised for strong 2014 — Atlanta Journal-Constitution, Jan. 1, 2014
  5. Market Prediction: Bull will keep charging in 2014 — USA Today, Jan. 2, 2014
  6. Bull Market has Years Left Based on S&P 500 Valuations — Bloomberg, Jan. 6, 2014
  7. Economist tells Denver audience to be aggressive over next four years — Denver Post, Jan. 9, 2014

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