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.
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.
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.
Guest Post by Elliott Wave International
The financial forecasts around the end of 2013 brimmed with optimism. Here are just a few examples:
- Many scoff at notion stock bubble exists — Associated Press, Nov. 19, 2013
- Economy Entering New Year on a Roll — Bloomberg, Dec. 25, 2013
- ‘We have entered a 15- to 20-year bull market’ — CNBC, Dec. 30, 2013
- Economy poised for strong 2014 — Atlanta Journal-Constitution, Jan. 1, 2014
- Market Prediction: Bull will keep charging in 2014 — USA Today, Jan. 2, 2014
- Bull Market has Years Left Based on S&P 500 Valuations — Bloomberg, Jan. 6, 2014
- Economist tells Denver audience to be aggressive over next four years — Denver Post, Jan. 9, 2014
Just a week ago they were so scared, so disoriented. So the bear at biiwii got bullish while they fretted. Now the newly brave dumb money does what it does best as it chases the momentum in a rush of greed. It is funny watching these things play out. It’s 3600 or bust for NDX! You go bulls.
Last week we projected 2 out of 2 charts agree; Nasdaq 100 target is 3600 +/- so why should we be surprised that the bounce is continuing? It is only doing what it was supposed to do. Could SPX (lower panel) be up for a test of the highs?
Guest Post by Ino.com
U.S. STOCK INDEXES
The June NASDAQ 100 closed higher for the third day in a row on Thursday as it consolidated some of the decline off March’s high. Today’s high-range close sets the stage for a steady to higher opening when Monday’s night session begins trading. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Multiple closes above the 20-day moving average crossing at 3558.39 are needed to confirm that a low has been posted. If June renews the decline off March’s high, the 38% retracement level of the 2013-2014-rally crossing at 3345.52 is the next downside target. First resistance is the 20-day moving average crossing at 3558.39. Second resistance is the reaction high crossing at 3599.50. First support is Tuesday’s low crossing at 3404.75. Second support is the 38% retracement level of the 2013-2014-rally crossing at 3345.52.
Ukraine war hype, China demand drop, GOFO mysteries… these are the short term noise inputs on the gold sector.
US Treasury bond yield spreads, gold vs. commodities (i.e. the ‘real’ price of gold), gold vs. the stock market… these are some of the fundamental considerations that actually matter and they have taken a hit since January.
It is easy to say ‘I am bullish in the big picture’ (measured in years) but it is not so easy to actively manage in the smaller pictures (measured in days, weeks and months) with all of the above noise inputs and more bombarding the poor individual player.
We use shorter term charts to manage the shorter time frames. Daily charts have most recently indicated a bearish set up as bear flags formed across the precious metals complex (with the exception of silver, which never got going to begin with) last week. Weekly charts continue to indicate that an extended and oh so grinding bottom may be forming, but that includes the potential for ups and downs, also known as volatility.
There is also a lot of noise lately in the stock market. The US stock bull celebrated its 5th birthday last month. The last 2 cycles (the manic phase of the secular bull ended 2000 and the cyclical bull ended 2007) were each approximately 5 years long. Today let’s retreat to the calm of the long term monthly charts and get a snapshot of the big picture.
The S&P 500 has a measured target of around 2190 that we have had open as a possibility since the big breakout occurred in early 2013. A measured target is just that, a measurement; simple math. It is not a directive and therefore 2190 is not hype, it is just a possibility.
- Covered a short position against leveraged NDX bear ETF QID (sort of a hyper long position) and am going to take profits on triple long TQQQ too. I may keep a couple other specs for a little longer, but the market is already bouncing toward points that satisfy a ‘relief bounce’.
- I am well aware of the merger uproar surrounding Osisko and M&A seems like a bigger picture positive for the gold miners with Yamana and Agnico Eagle going tooth and nail with Goldcorp over this Quebec mine.
- Until the precious metals start fixing their daily charts and I see something other than GOFO mysteries on the macro fundas… I’ll watch for now. But M&A is a funda too.
- Time to have nice steady heart rate and evaluate bear positioning again on the stock market.