A-B-C-D Trade - page 194
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The U.S. NFP and Unemployment figures came in better than projected. Attached is the same daily chart we posted with wide fibs and fibo fan.
The thick yellow line is the price we saw as support, at 11,260, due to it being the open price for Nov 12th start of QE2. This is also near wide plot's 50% fib of 11,241.
Price rose marginally after data, and came back down to break through previous low of 11,270 to land at the tight 161.8
Notice the fibo fan's 61.8 also met price at yellow line.
Wide plot and fibo fan plot (gray dotted fibs): Low 9563 High = 12,919
Tight Fib Extension plot (gold color fibs): High = 12,919 Low = 11,837
161.8 = 11,168
Vertical blue line marks QE2 date of Nov 12, 2010.
Markets' muted overall reaction to NFP is overriding concern still focused on EU debt.
Right after our last post, US30 experienced a bounce up above 11,500.
The attached is SPX500 daily. Red horizontal line marks price level of 1210, at start of QE2 on Nov 12th.
Wide plot (Gray dotted): Low = 1008 High = 1376
Tight plot (yellow): High = 1376 Low = 1169
Price hit the Low of tight plot as it's pivot today thus far, and has bounced back up to the red line level.
Here is a continuance of the EUR/USD 30-min chart with PSQ9 and wide fib plot.
Events are marked with
SNB (Swiss National Bank lowering interest rates),
BOJ physical intervention,
ECB/Trichet dovish comments and bond buying program, and
U.S. NFP/Unemployment data.
BAJA bearish divergence at top, just prior to BOJ, on both 30-min and 1-hour charts.
BAJA bullish divergence at Aug 2nd and Aug 4th pivots on 30-min.
Currently, diagonal (red) Moon 180-degree acting as resistance. This line has provide S&R previous as can been seen as we look to the left on chart.
There are always lessons to be learned during these types of volatile periods.
The thought that perhaps the QE2 start date's price was significant entered our minds when the DOW was at about minus 400 points. The reasoning is we view the price levels above Aug 12th was created by the FED policy action.
After determining this, we realized that Gann also mentioned anniversary dates as being significant.
QE2 ended July 31st, and we had anticipated U.S. stock markets losing ground.
There have been so many high-impact events, that we must exercise caution. Pick our spots and not force trades. Always implement money management, including stop-loss.
Have a nice weekend.
Back from short vacation. S&P's downgrade of the U.S. long-term debt of course is the big story.
We feel that this is a deserved downgrade and is reflective of the ridiculous monetary and economic policies enacted by this country over the course of the last decade.
The "demand" for QE3 is already out there, and therefore more corporate welfare. These so-called experts act surprised by this latest "shakeout". The only thing they can mutter (along with QE3), when interviewed, is that this is a great time to buy.
We lost a book written by a Berkeley PHD that compared the U.S. stock market to a shell game. After the inevitable crash and burn, they start talking it up again. During the Dot-Com bubble burst, some brokers were advising clients to buy while they were selling.
QE2 looked like a gift to the corporations and shareholders, after the meltdown of 2008. As if the powerful corporations and moneyed individuals and groups forced their political contacts (that they fund) to "just inflate the market for a while until we get our money back and make a little profit".
Attached is SPX500 with fib plot: High = 1368.6 and Low = 1257.9
We have just hit the 261.8 extension area of 1078.8 in after-hours trading.
Also on the chart is Moon-Earth 0-degrees, with RSI(4) for OB/OS conditions. Eclipses show which signals were good, including July 24th which was open of new week with gap down from O/B.
2 more recent signals were Apr 4th and May 2nd, both sells.
Attached 30-min EUR/USD chart employs PSQ9 and wide fib plot. We colored Sunday candles in lime green, with yellow horizontal lines denoting Sunday high and low.
The Sunday price range was larger than normal due to the gap up upon open of week. Pair went to revisit that high before European stock markets dragged down USD in flight to safety.
Price closed above the gray wide plot's 61.8 fib of 1.41539, only probing briefly below that the rest of the day.
An intra-day fib extension plot in the direction of the move down would have High = 1.44005 and Low = 1.42401.
Trading the breakout of the Sunday Low captured all or parts of about 140 pips.
For US30 (mimics Dow Jones 30 Futures) we had wide plot on daily of Low = 9563 and High = 12919. Fibo fan with same plot had its 78.6% ray touched as support from 01:00 to present.
Price had gapped down upon week's open, below the aforementioned QE2 start price of 11,260. However, the August 8th U.S. session had stocks plunge across the board.
A tight directional plot has current pivot low as its 261.8% of 10,437. That's quite a bit down from close of regular hours trading price level of 10,784.
Start of week July 24th was 12,519, and thus it has now lost 2,000 points over a period of about 2 weeks.
The reopening of the U.S. session will refer to the futures market to estimate any gap at start.
The Asian stock markets are all in the red, with the Hang Seng (Hong Kong) leading at minus 6%.
USOIL had BAJA bearish divergence after 2nd peak Aug 21st and near 78.6% fib.
Plot: High = May 31st 103.35 Low = June 23rd 89.59
200% extension = 75.83 just hit today Aug 9th.
When the governments allow markets to naturally cycle down, commodities such as oil will become cheaper and less likely to stunt real grow.
They cannot artificially prop up the stock markets by flooding the world with cheap money, AND expect oil to be at price levels conducive for growth.
Other commodities such as food spikes up and starvation sets in. Uncle Warren (Buffett) was wrong about that. Now, even the middle class is rioting.
84% disapprove of the job done by the U.S Congress. Congress also oversees the FED. Think about that for a moment.
FOMC tomorrow at 18:15, and all ears will focus on FED verbiage. Hopefully, they will not continue to bat the deflating balloon back up and say
"look, the economy is rising!"
After refusing to take blame (for lowering interest rates after Dot-Com burst), former FED Chairman Greenspan finally took the position recently that recovery will take time.
hi thanks for all , oil we found a gap in daily will it fill ? i wanna know how a gap comes ( for gold higher side gap ) ? pls brief me , thanks in advance
hi thanks for all , oil we found a gap in daily will it fill ? i wanna know how a gap comes ( for gold higher side gap ) ? pls brief me , thanks in advance
James, if you are referring to gaps at open of this new week, then I can follow your sentence.
Some stock markets during European session have stopped the bleeding so far. With today's FOMC at 18:30 GMT, doubt oil or gold will close gap before that. The market awaits this event.
Right now, gold needs to drop 5% or $90 to close gap. That's a lot.
Oil needs to rise about $7.50 or 9%. That's a lot.
Gold will stay up as long as there is fear. Oil will stay down as long as the stock markets are weak.