happy charts

[happy]

 

The magnitude of the current divergence is not huge, and strictly speaking, it could still be negated if prices were to power ahead from here ... however, given that price is bumping up against resistance/rising trend line I think this is unlikely.

 

ideally we would close below the resistance/trend line. An intra-day spike above followed by a reversal could be tolerated, however we risk negating the negative divergence which would make any ensuing correction less significant.

 

 

 

looks like: "goodbye divergence"

 

[happy]

looks like: "goodbye divergence"

 

 

update:

 

 

well, well . . . looks like I may have been a bit too hasty. Divergence was briefly negated on an intraday basis, however the reversal and close on the trend line has re-established the divergence (by a whisker!). Will be very interesting to see how this develops from here.

 

As noted previously, and provided the divergence remains in place, I would expect a correction more akin to the July-August 2007 or May-June 2011 corrections (which would make the 14,000 +/- area indicated a prime target).

[drbubb]

The Dollar may drop for a while...

 

DXY / USD etf ... update

 

[happy]

The Dollar may drop for a while...

 

DXY / USD etf ... update

 

 

I agree. Looks likely also in light of C.O.T. and sentiment.

 

So for the moment it seems we have US equities down = US dollar down. Interesting.

[drbubb]

I agree. Looks likely also in light of C.O.T. and sentiment.

 

So for the moment it seems we have US equities down = US dollar down. Interesting.

 

A big Change of Mindset may be coming.

Gold may be the place to be...

[happy]

Update on the Aussie: price has been slicing through butter like a hot knife.

 

In the context of the rise from 2009 low we have broken the 61.8% fan line. This is generally an important line to keep track of as violation of the line effectively "confirms" the 2011 top / establishes a new downtrend.

 

Ideally we would see a "test" and "rejection" of the 61.8% fan line to seal the deal (see close up below). Looking at the C.O.T. data (at extremes) suggests that we are due a bounce soon. It remains to be seen whether the anticipated bounce turns out to be of the dead cat variety or manages to recapture the 61.8% fan line.

 

 

 

and a close up:

 

 

C.O.T. data:

 

 

 

 

Looking at the AUD/JPY chart, the Aussie is approaching important support / gap.

 

[happy]

A look at the Yen:

 

On the weekly chart, the relentless plunge into the May low resulted in positive divergence, which has resolved with a strong move off the bottom. However, technical damage remains in place.

 

 

On the daily chart, we can see the Yen is currently filling a gap. It will be interesting to see how price reacts to overhead resistance, at least according to the C.O.T. and sentiment report, there is more juice left in the Yen yet.

 

 

[happy]

Gold: price action looks like a text-book bear flag . . . and may be ready to head back south. The price accomplished a 61.2% retracement of the most recent drop which also coincides with the 38.2% fanline from Oct. 2012 high. One would expect these lines to represent important resistance and as such it would make sense for prices to correct from here.

 

If a correction were to eventuate according to the bear flag scenario, a simple AB=CD calculation would currently project to ca. ~ 1220. If such a scenario were to develop, my guess would be that we would see a lot of positive divergences emerge thereby establishing a more durable low than the recent low of 1325. Obviously that remains to be seen.

 

(As a side note: it is worth noting that the predictions of Gold at either 1340 and/or 1250 by Dr. Bubb's HK hedge fund friends looks remarkably prescient!)

 

 

 

Looks like the bear flag scenario has played out. Here is the updated chart of the daily (new fanlines drawn as we have made a new low):

 

 

The daily chart looks ugly. A lot of overhead resistance needs to be negated before we can say that Gold has re-established an uptrend (vs. staging a mere counter trend rally). Still, on the weekly chart there are some signs of possible positive divergence emerging. Too early to tell for certain yet. Wait and see.

 

 

If we zoom out even further, to the monthly, we can see that price has just broken the 50% fanline (going all the way back to 1999) and unless we stage a quick reversal here, we risk testing the 62.8% fanline (currently around $1100).

 

 

While there is not exactly cause for optimism yet, there are definitely reasons to become less pessimistic: 1) sentiment and 2) there is some support around the $1300 +/- area (= 50% fibonacci from 2008 low - 2011 high, and 38.2% fibonacci from 1999 low - 2011 high). Otherwise, it looks like the next area of support is around $1100-$1150.

[drbubb]

Interesting chart

 

I wonder how would it look, if you drew the fan from the 2001 Low ?

[happy]

I wonder how would it look, if you drew the fan from the 2001 Low ?

 

Like this :

 

 

If we take the 2001 low as our reference point then the break of the 50% fanline looks more convincing (the June candlestick opened below the 50% fanline and will likely close below it too). This would make a test of the 62.8% line more likely ... on the other hand, the target is raised (somewhat). Instead of $1100 - $1150, support looks to be around $1125 - $1175.

 

In either case (i.e., whether we take 1999 or 2001 as our starting point), we would want to see a reversal to the upside immediately so that we could establish something of a "low" and begin repairing some of the technical damage done.

 

On a slightly more positive note, the weekly HUI is showing positive divergence, although, as long as the knife remains in free-fall it is too soon to conclude anything from this.

 

[happy]

My Equity-Crash Early Warning system has gone from "flashing yellow" to "flashing red" today

 

It is a Ratio of LQD-to-TLT (Liquid Corporate Bonds to Treasury Bonds)

 

Latest:

 

This suggests people want less risk - and so are going into the "safest" assets

 

The TLT-vs-LQD price relationship : Chart

 

Meanwhile, it might be worth keeping an eye on what looks like an inverted H&S pattern on the LQD:TLT ratio:

 

 

 

 

Looks like the H&S has been triggered (or at least, "almost" as price closed below neckline). Does this mean the "equity early crash warning" is on the verge of flashing GREEN!! ?

 

 

 

On this analog that would situate us in a similar place as April/May 2009 = buying opportunity!? Seeing LQD:TLT is a leading indicator, we can sit back and wait for confirmation before . . . going . . . long ! (who'da 'thunk?)

[happy]

Just following up on the previous post and exploring the possible similarities w/ 2009 period:

 

2009:

 

2013:

 

 

and back to 2009:

[happy]

Apple not looking crash hot:

 

[Chartered Surveyor]

Inflation adjusted, what should the price of 1oz of gold be today.

 

 

[happy]

some long overdue updates . . .

 

SSEC (Shanghai Stock Exchange): some promising signs earlier this year, however following violation of the April/May low prices have proceeded to plunge to new lows. Back to the drawing board on China.

 

 

FXI (China iShares): no new lows yet, however uptrend-line has been broken and currently challenging June/July 2012 lows.

 

 

 

HSI (Hang Seng): following a successful breach of the downtrend-line late last year, the Hang Seng was unable to follow through in the new year. The recent plunge has broken the 62.8% fanline confirming the Jan/Feb 2013 high.

 

 

EWH (Hong Kong iShares): after breaking out to new all time highs in May 2013 (what in hindsight turned out to be a false break), EWH could not overcome the negative divergence and has been correcting since, currently challenging the 38.2% fanline.

 

 

 

All in all, following glimmers of optimism earlier in the year, things seem to have turned sour rather quickly ... which goes a long way to summarising action in the Emerging Markets as a whole.

[happy]

Inflation adjusted, what should the price of 1oz of gold be today.

 

 

 

Adjusted to when? E.g., (taking CPI data quoted on stockcharts) if I adjust the current price relative to the 2001 low, then Gold would currently be ~ $920 expressed in 2001 dollars, if I adjust the current price relative to the 1980 peak, then Gold would currently be ~ $400 expressed in 1980 dollars.

 

But even adjusted for inflation, Gold is currently in a downtrend:

 

 

 

 

Alternatively: LINK

 

[happy]

According to Yves Lamoureux , the unwind of the Long Gold / Short Yen trade is weighing on the Gold market. As such, the Gold priced in Yen chart might be worth keeping an eye on (currently sitting at important support):

 

 

. . . and elaborating on that thought:

 

[drbubb]

Nice charts, thanks

 

Added some lines

 

Updated - Month-end

 

Latest - Now much lower

GOLD : 1224.30

$CPI- : 231.83

Ratio : 5.28

(Seems to be on the bottom of the channel)

[happy]

I generally prefer log charts but I was looking at some arithmetic charts and noticed the following: GLD and SLV

 

 

 

 

Too early to tell how durable last week's lows will turn out to be, but judging by these trend-lines last week is a good candidate. Also, the intraday low on Gold of 1179 is just above fibonacci support around 1150-1175.

 

And, on a related matter: SLW

 

[happy]

Following up on the arithmetic GLD chart ... I noticed some similarities with the "megaphone" pattern Ross Clark mentioned back in 2009: LINK LINK

 

 

 

vs

 

 

 

Perhaps a little early to suggest we are in a similar pattern, however if this template were to unfold, then we could expect a sharp rally (e.g., up to resistance around 150) followed by a secondary correction before we see the resumption of the bull move (note: 'E' does not have to take out the low of 'C', it can also be a higher low).

[happy]

Some very bullish action in the inverse bond funds, breaking out of consolidation pattern on heavy volume.

 

 

TBF (1x inverse)

 

 

TBT (2x inverse)

 

[happy]

Another bullish looking chart: EUM (inverse Emerging Markets)

 

 

 

. . . and correspondingly bearish: EEM

 

Price broke trend line (= 50% fan line) several weeks ago and this week tested and rejected the 62.8% fan line, thereby confirming the December 2012 high.

 

[happy]

Apple not looking crash hot:

 

 

 

following up on Apple: currently at important resistance levels

 

AAPL (60 min): price is currently encountering resistance at the 62.8% fan-line. Successfully penetrating this line is the first step to reclaiming an uptrend (i.e., negating the downtrend in the context of the May-June correction). However, current resistance on the hourly chart also coincides with important fan-line resistance on the weekly chart - adding significance to current price action.

 

 

 

AAPL (weekly): previously noted fan-line resistance happens to coincide with an already negated 62.8% fan-line that goes back to the 2009 low. Price is currently in the process of testing resistance. If price were to reject the fan-line, then this would confirm the $700 top in the context of the 2009-2012 bull market and as such it would be reasonable to expect lower lows.

 

[happy]

on a more positive note: Amazon just cracked the psychologically significant '$300' level.

 

AMZN (daily)

 

 

 

. . . this is what an (almost) 10-bagger looks like (arithmetic scale for effect):

 

AMZN (weekly)

 

[drbubb]

This too: