Both CSCO and FTEK were on the actual (brokerage) ‘positions held’ graphic included in the model portfolio page (though I still wonder why anyone would care what I, a most unremarkable stock player over the last year, hold) last weekend. FTEK was bought because of a bullish Symmetrical Triangle and CSCO was bought because of a bullish (ha ha ha) Falling Wedge.
Both released earnings this week. One (a micro cap having little macro implication) did errr… well. The other (a Goliath having big implications) pulled a gross out. I took the liberty of drawing in today’s candle, which is actually going to be a massive gap down.
Symmetrical Triangle (yey!), Falling Wedge (boo!).
You’ve got to love the markets.
When I see things like this I lament (just a bit) that I do macro work and follow bigger pictures. That is because as a simple chart speculation on a company that I admire (originally being from the manufacturing sector) this Cup & Handle is a beauty but I don’t have time to be digging up and following these things. Hence, I am not really a stock trader.
You may recall we drew the Cup and Handle back in the spring. Now, a day late and a dollar short I come to find out that an over bought DDD is on its way to target.
 Well, I actually bought it in the spring and traded out. Then the C&H was noted in July and again in August. Then I took my eye off the ball.
In response to a subscriber’s request, I am pleased to announce the addition of a simple yet helpful new aspect to the NFTRH service that will be of value to subscribers and potential subscribers who do not always have the time or inclination to wade through the whole detailed NFTRH report each week.
The NFTRH service will now include clear, uncluttered charts (as follows) focused on a daily time frame for strategic ETF’s. This is an addition (at no extra charge) to the already well rounded service that includes the detailed weekend letter and interim email/website updates during the week.
We now provide handy and unbiased short to intermediate technical signals for gold (GLD), silver (SLV), gold stocks (GDX), silver stocks (SIL), commodities (DBC), broad US markets (SPY), Europe (EZU), emerging markets (EEM) and China (FXI). ETF content is subject to change as their strategic value changes.
This singular aspect of the new NFTRH represents a clearly defined focus on my most basic management tool and capability, i.e. nominal technical analysis simply portrayed with a clear and concise message that is free of detailed theoretical and opinion content.
In the interest of simplicity there will be little talk of support, resistance, volume and measured objectives in this segment of the service. In short, all we want to know with these charts is ‘are they on bull, bear or neutral signals?’ Very mechanical, very unbiased.
On to our first (complimentary) daily technical report…
GLD is on a bear signal with MACD triggered down, below zero and price below a short term downtrend line and the 50 day moving averages.
Following charts keeps you on the right track in that it forces discipline. But bad calls like “technically, a bounce toward the 50 day averages would be the ideal bear opportunity”, written right there on the chart, come with the territory; for we non-gurus anyway. So let’s own this one…
…and all the others that have not worked out over the years. Like oh I don’t know… like an HUI target of 888 maybe?
As with risk control on the gold stocks over a bigger picture, risk (with regard to the very real possibility that the short term bearish call on the SPX was wrong) was controlled at the noted resistance intersection on the chart. SPX had ideas other than what I had projected.
It’s simple. Nobody is going to be right all the time, but risk management always plays a role in success over the long haul. Think of any given trade at any given time; half the people are on the wrong side of it. Manage risk.
 This mess in the VIX helped with the risk management along with SPX’ break of resistance. VIX formed a lousy looking pattern and pooped the moving averages. Now it looks to the ‘higher low’ parameter to see if it can’t whip up some summer discontent.
If you ask me, the biggest concern for those fretting about the gold price is the preponderance of analysis showing up out there cherry picking the top trend line by a log scale chart. Sort of like this:
Au monthly (log scale)
Of course the chart also has a lower trend line that intersects a massive support area defined by the pattern that formed in and around the crash of ’08. Why is this one not highlighted as much?
Au monthly (linear scale)
Meanwhile, a more honest linear scale chart (shows a market as it really is, not percentage adjusted) argues that 1200 and even or especially 1000 look doable.
These are the charts. They do not care about cartel manipulation or all the other crap that people desperate to keep bullish opinions intact promote. Gold is just gold. The brainwashing by those that promote it is something else all together. This cyclical bear correction is cleaning out all of that.
It is funny that some people who have said don’t believe the charts seem to be watching the charts plenty now; log scale charts with a trend line that intersects an area that does not show strong lateral support. Take it for what it’s worth.
We have been anticipating a rally attempt of some kind. There are targets to the upside that can actually extend all the way to the broken neckline of the big fat Head & Shoulders at 375. There are several rally target points lower than that, plotted by daily charts. There are also parameters to the current rally’s viability, which were not eliminated by Friday’s down thrust.
But it is Mr. Fat Head (the monthly chart) who owns the big picture until such time as 375 is taken out. Mr. Fat Head’s target is an unthinkable 100. The problem is that 250 was unthinkable when we began putting it on radar months ago. Just a friendly reminder in the event things get bullish in the short-term as has seemed probable.
This is a battle between scenarios. Was it THE bottom at the washout low a couple weeks ago, as the index came to the 62% bull market Fib retrace? Is the trend line in the low 200′s going to contain it? Or is Mr. Fat Head’s 100 target going to one day prevail?
In my opinion, week to week management by charts on shorter timeframes will work best. They have worked so far. There is a scenario in play here where the precious metals are bouncing with the inflation trade and another bump in the maturing stock bull market. I would not read much more into it just yet.
Another non-technical sign would be the Chest Beating indicator. You know the one. It’s a week to week, take the pulse type of market until real technical damage is negated.
I stopped out of a failed counter trend trade at no gain. But the big picture on AAPL remains bearish per this weekly chart, which has the details.