Monday 8 October 2012

Exciting Time Ahead.

Let us start by looking at the daily chart of the emini or /ES, the SPX futures, the favourite toy of the Boyz. You saw how they took the futures down overnight and then spent the entire day in the range. What retail is supposed to do?

Looking at the daily chart of the SPX futures, I see that the BB is narrowing. /ES had earlier gone out of the BB on 14th September and after that has not been able to cross over 1460 yet. It seems logical to me that /ES will touch the lower band of the BB or come close to it. Earlier I had indicated that the bounce level is 1430. Cycle says that it should happen in a day or two.

The 15 min charts in most indices is looking like a bear flag  or at least a continuation or consolidation pattern which indicates more selling ahead.

So far the down leg has been one step and at least one more push down is ahead.

Gold has been consolidating below $ 1780 and silver in the range of $34. Silver at least not looking good in the hourly chart. If you remember, I had said earlier that Silver bounce level is $ 33.80. Today, it touched that level few times and bounced from there. Did not close below. The significance of closing below that level would mean a short term sell signal. I think it will again test that level tomorrow. The hourly BB is as narrow as I have seen in ages and pointing downward. It can all change in a flash and not too much must be read into it. We will see what tomorrow brings. Gold may test $1780 again in the overnight session before testing $1770 again from where it bounced today. All in all, the PMs are behaving as we thought they would. If they hold their level, maybe we would consider going long. As I have said before, even if there is a sell signal in PM, it will be short term.

The cycle bottom tomorrow/ day after. But there may be another temporary scare by October 15th . But I do not think it will cause much damage.

Today Nasdaq was much weaker than SPX. In the W.O.F+ report # 1, I had said that Apple downside target as $ 640 and if it closes below, it means problem. Today Apple closed at $ 638. While a bounce in Apple is due and will test its high and a Dec. Call may be a good play for the brave hearts, I think Apple has seen its high at $700 for quite some time to come. Apple may not be able to cross $700 again for a very long time.

TBT sold off. Those of you who received the WOF plus news letter # 2, know that I had written that TBT will correct somewhat in the coming days and if it makes a higher low, it will be time to long TBT. Another play for the more adventurous of you is to sell TBT puts. Even if you are assigned the stock, you will get it at a lower price because you would have got the premium. This is one option play which I think is a low risk game.

I am yet to receive your feedback on the 2nd newsletter which went out yesterday. As you can see, already most of the things written in issue # 1 and # 2 are coming true. Used properly, these reports can be valuable investment tool. Or at least I hope so.

I plan on taking trade after quite a while and I hope all of you will make tons of money and bless me! But do make your own due diligence analysis and have proper risk control. Only GS and JPM can win all the time because they are the house.

You and I are the proverbial suckers handed out duds.

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1 comment:

  1. Hi Joe,
    The rational for Apple re-testing its earlier high is that prices normally make a double top before rolling over.
    Thank you for your help and support.