In February of 2013 we noted the big fat HEAD on the HUI’s massive H&S pattern. It was reviewed again in April of 2013 after it broke the neckline in a very bearish move. Mr. Fat Head’s technical objective was and is 100.
Why is this being revisited? Because I have gotten a couple emails noting that it is showing up again out there amidst the very bearish backdrop. If anything, if every gold bug on the planet is planning for 100, the ingredient is in place for this final indignity that they are so well prepared for, to maybe not happen.
But a target is a target and it is there for a reason; namely that its source – Mr. Fat Head in this case – has not been eliminated from the picture. Here he is updated…
There are other considerations…
We are operating to parameters on a would-be gold sector bottoming process, which has been a year+ long grind (‘grind is good’ as it absolutely ruins peoples’ nerves over time) and which by the way, everyone sees now as either a final bottom or a consolidation before the final and spirit destroying wipe out, depending on their Team’s hopes and aspirations (bull or bear).
About a year ago NFTRH projected two possibilities (within the context that it was only in the realm of potential) and they were a ‘W’ bottom or failing that (it promptly failed) an Inverted Head & Shoulders on the HUI. Today a new pattern has joined the IH&S and it is a Symmetrical Triangle, which would be a consolidation before the final crash.
HUI continues to make good improvement by its daily chart, which means that the already constructive weekly chart is gaining the upper hand.
With the help of some of NFTRH‘s standard weekly charts, we take a snapshot of the US stock market.
The Bank index is unbroken from a weekly perspective. People will talk about an H&S but it is not activated until the trend channel and the neckline (a well defined support area) are broken. BKX, along with the Semiconductors has been a notable leader to the entire surprise* phase of the bull market out of Q4, 2012.
A breakdown of support would break this cycle of the bull market (if this is a secular bull market as many experts think, then the bull would live again after the cycle completes). It would probably be healthiest to the secular bull case for a breakdown to occur into a relatively small cyclical bear market.
A good, tight 30 page report that is going its own way, not the way the herd is going.
NFTRH 297 out now.
The first in what I think will be a line of reports that focuses in on themes for deep summer, as da boyz relax, cashed out and sipping specialty cocktails at sunset in da Hamptins. NFTRH 293 is 35 pages of pure focus on US and global stocks, precious metals and the all important Treasury bonds / interest rate markets.
After being prompted by a couple of NFTRH subscribers I have finally gotten a public chart list up at Stockcharts.com. The charts are not annotated but they are what I’d consider key indicators and markets for NFTRH analysis. Items will be added going forward, but for now the list includes what I was able to come up with off the top of my head.
Subscribers can review these in the context of our ongoing work and discussion of them in NFTRH and public viewers can check ‘em out too as a handy reference.
Market charts are white and tend to be daily views while indicator charts are light blue and often weekly views. The multi-colored charts are Decision Point standards.
Again, adjustments will be made going forward to add different time frames, markets and indicators. Also, I guess I am supposed to ask you to vote for the list or something, as that seems to be pretty important to public chartists over at Stockcharts.com. So if you’d like to do that…
Just getting comfortable with the format. Please dear non-traders, tune out these updates.
As noted in NFTRH 287, CORN was dropping toward a lower channel line. This morning what I think is a chart anomaly dropped it through the trend channel. It currently resides right at the lower line, just above the 50 and 200 day SMA’s.
I had noted CORN might be added back on a test of the trend line and that is what I am going to do. Risk is controlled below the moving averages.
Buy target: Trend channel bottom
Initial Target: Trend channel top
Stop Loss: Below SMA’s 50 and 200, as suits individual risk tolerance
Profit alert (reminder) issued on 4.25.14 with price above 35.
4.29.14: 4% Profit taken. Channel top target is still open for those willing to continue speculating.
What better day than today’s predictable hard bounce to present the other side? If you believe the bounce and want to be a happy bull, just step along from this post. If you don’t mind considering other opinions or are like me in thinking 2014 stands a better than even chance of being the year that the current cycle ends, check out EWI’s 24 page report by clicking one of the graphics below.
We have come to a point in this cycle where we are supposed to feel ashamed for having bearish views or opinions. Prechter’s wrong again after all. The thing is, even a bull could use some alternate opinions. I am not talking about a market crash. Please. I am talking about a macro view. That should be someone’s basis for operation. I have my views and they have not changed since early last decade because the things I had negative views about have not only not changed, they have intensified and shifted (commercial credit replaced by official credit). But there is still a debit waiting out there.
We who hold a negative big picture macro view were stupid until the 2008 liquidation made us geniuses. Now we are stupid again and trend followers are smart. Wash, rinse, repeat. EWI is an affiliate and I make a commission on sign ups to their services. So consider this a promo. Also consider that EWI was founded by someone who was an influence of mine. So it’s not just a pitch. We’ve only recently gotten with the idea of partially funding all the free information here with ads, like most blogs have routinely done all along. Consider this an ad that I wholeheartedly recommend. And the darned thing is free for crying out loud.
Mastercard (MA) is has done some interesting things in gapping up on volume to form left side of the Head, then wiping those momos out on the other side and crashing the MA 50. It then bounced and found a now down-turned MA 50 to be resistance.
That’s a bearish potential topping pattern that would become an actual topping pattern if the support line breaks. MACD is red and this thing is losing momentum rapidly.
The implied target is around 60. Now it is a battle between the MA 200’s (support) and MA 50’s, resistance.
There is a growing presence out there talking about a potential Inverted Head & Shoulders (IH&S) on the HUI, which NFTRH has had going since mid-late last year. Below is a simple view of it, with last week’s ‘Week 2 down’ making perfect sense (symmetrically speaking) with ‘Weeks 1 & 2 up’.