Stock Market Performance, September 2012

The chart below compares some of the bourses around the world since the most recent major market bottom (March 2009).

Winners:

• Singapore Strait Times Index
• Dow Industrial Average (thanks to Helicopter Ben's money printing)
• German DAX
• Hong Kong Hang Seng Index (finally following Shanghai?)

Not-so-winners and losers:

• Tokyo's Nikkei
• Shanghai Composite
• Madrid (although it does show some sign of bottoming)

Who could have known, Shanghai is now lower than in March 2009? For sure, it had bottomed in November 2008 at a much lower level. Still, if the world is still counting on China to lead the way out of the funk in the real economy (not the stock markets), it may be mistaken.

Equity Disconnects - Will It Catch "Down" with 10-Year Note Yield?

Or will 10-year note yield catch "up" with the equity market? Ben Bernanke is not about to let that happen any time soon, is he?

Nikkei Looks Ugly, Already Below Long-Term Support

I was going to post the chart for Shanghai Composite, which sits right on the support (may be breaking as of now today), then I found a chart that's worse: Japan's Nikkei.

3-year support was around 9,000, or about 50% Fib retracement. It's breached, and the effort to regain that support line hasn't gone anywhere. Now on the weekly chart, it is forming a bear flag.

The first target would be the March low of 8,227, then the full retracement back to October 2008 low of 6,994.

Gold $1,864 Spot

Well... Hardly trading ever since March 11's triple disaster in Japan of earthquake, tsunami, and broken nuke reactors at Fukushima (which turned my regular finance blog into Fukushima disaster blog) and simply sitting on gold double-long ETN has proven to be the best-ever strategy for me.

I have DGP, which went from about $40 in mid March to $67.61 today (August 18). My target has long been met without me even noticing it (it was somewhere around $52). Now that gold is in an uncharted territory (all-time high) and I'm yet to learn how to draw Fib lines forward, I'm using the Point and Figure chart to literally figure out my new target.

Looking at the chart, it looks like a break out from the pennant on a long pole. The length of the pole is $18, and the bottom of the pennant where the breakout has taken place is $62. The target would be $62 plus $18, equaling $80. That would translate to gold slightly over $2,000.

Not very far, is it? I will probably continue to sit on my holding as I see no reason to sell anything related to gold in the market environment like we've been having. I didn't even notice that the US stock market was tanking until about 2 weeks ago, but I'd better watch out for the entity who issued this ETN: Deutsche Bank (DB). I hope the German government will support the bank even in euro turmoil (or death dance).

(If hoping is not good enough, putting DB may work.)

US Stock Market LOVES War... Futures Up Big

Bloomberg says Dow futures are up 73, Nasdaq futures up 13.5, S&P futures up 8.5.

Obama goes to Rio with his family, the US military starts shooting 120+ tomahawk missiles into Libya, and stock futures jump. Whatever. For those who are still in this almost immoral place which was once a stock "market", here's what I see TA-wise, using S&P500.


So far, the current correction, though it feels severe because it comes in the middle of geopolitical troubles in the world (plus 9.0 earthquake in Japan), is not very big one. Take a look at how the market corrected from May 6th flash crash. It took 5+ months to recover. The obvious resistance is 50-DMA, which sits at 1,302, about 23 points away.

Down volume is more significant than up volume, but again, the volume doesn't compare anywhere near the level seen in May and June last year.

I'm invested in gold, silver, and oil stocks and options, but I don't trade any more these days. I was too busy to cover AMZN short on Friday and close out all trading position. Oh well. My AMZN target was around $150, where the weekly 50-MA is right now. But I may just get out, depending on how much Ben and Timmy want to hype the stock market.

Ben and Timmy Did Their Job in the US, Nikkei Tanks the 2nd Day

For those who care, here's the real-time link of Nikkei.

As for Yahoo's SKF MB, stock peddlers and jerks abound (even a couple of new ones), which tells me to just hold what I have and sit tight. It's going down. (Do your scientific DD.)

What's interesting today was MTL, Russian iron ore company, up 3.5% for the day. Russia has promised to provide Japan with additional LNG and coal for power plants.

On-going, Unfolding Disaster in Japan

News out of Japan is getting worse by the minute. Despite Bank of Japan throwing 15 trillion yen ($182 billion) to prop up the market, Nikkei is currently down 657, to 9,596.

I have no doubt of Ben and Timmy's power to prop up the US market, but frankly, I don't care. I have my friends and families and relatives in Japan, and I am too busy blogging on my other blog on the March 11 earthquake/tsunami disaster with information from Japanese news sources. I don't think I would be very much actively trading near-term. I'll hold what I have, which is gold/silver ETF and ETN, iron ore company (MTL), USO calls, VXX, and short AMZN.

Too bad I don't have any re-insurers. Or maybe none of them is public. I just don't know. General Re is a Warren Buffett company. Munich Re is traded on DAX, but it is also 8% owned by Warren Buffett. Hmmmm.

Last I checked, Yahoo SKF MB is still trolled by some jerks spewing venom, so the trend on this indicator remains down. Good luck, and batten down the hatches. The market will go down, if not tomorrow then later but it will go down. IMHO of course..

And don't, for a moment, think it's about Japan only. Financially, Japan is a huge market. Money and credit flow in and out of Japan will be severely impacted. China may have surpassed Japan in terms of national GDP, but in financial market size and complexity, it doesn't compare.

For your TA enjoyment, here's Breakpoint Trades guys' weekend newsletter (free, you can subscribe yourself, they are good).

If you are so inclined, please donate to your local Red Cross or Red Crescent or equivalent, or whatever charity that you prefer that is collecting money for the earthquake/tsunami victims in Japan. Japan is a rich country, but not rich enough to pay comfortably for such a disaster. Food, water, and fuel are in severe shortage in the affected area, where the night-time temperature drops below zero (Celsius).

Why Me, Worry? Says Ben (and Timmy and the Whole Crew)

This gotta be one of the biggest crap I've ever seen coming from Ben, Timmy, the whole PPT and TBTF Wall Street banks: to levitate the US stock market on a non-POMO day on a thin volume, after the massive earthquake in Japan and on-going and worsening turmoil in Libya and euro and the EU getting unhinged over debt crisis in PIG.

They've been throwing everything they've got on the market from the get-go.

The ostensible reason for today's gain? Because the oil price fell! Of course.

30 minutes to the close, Dow is up over 100 points, S&P500 up 13, Nasdaq 22.

US dollar is down big, gold, silver up, oil down, copper is up.

NFLX is still below 50-DMA (which sits at $204.03 today). For that matter, Nasdaq remains well below 50-DMA, despite today's advance.

S&P 500 Intraday, 1-Hour Left

After breaking down from the symmetrical triangle that I mentioned yesterday, it is forming a second rising wedge for the day. Looks bearish to me, but MACD (not on the chart) does show a positive divergence. Probably in anticipation of the PPT.. It's possible that it will reverse upward in the final hour, so that the bulls at CNBC can call it "bear trap".

I don't quite care one way or the other, but I'm irritated with those dip buyers of AMZN... LOL. (But I'm still short.) And I'm mightily irritated with JPMorgue and the gang for banging the precious metals..

The chart is 5-day, 15-minute chart.

NFLX Intraday - Hit 50-DMA and Turned Back

(UPDATE) So that you know, 50-DMA is $203.62. 200-DMA is $159.41. It's trying again to break above 50-DMA...

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For now. Still 2.5 hours of trading left, not counting AH. Volume is running higher than yesterday, though doesn't seem to correspond with a large price movement (up over $7).

I would put it, with a target at 200-DMA (currently at $159), but I don't have extra money in my account... Do your own DD.

S&P500: Triangle Pattern Can Break Either Way

So I was told more than 3 years ago. I distinctly remember when: December of 2007. The market topped in October that year, in retrospect of course. The market sharply corrected, and then sharply bounced back in late November, and was chopping back and forth in December, forming a symmetrical triangle.

"It could break either way", a trader told his followers. It was very clear which side he was expecting: Up. The direction was finally decided in January, and it was down. The trader told the followers it could backtest the trendline and maybe retake it. No it didn't. It went down, down, down.

So, when I saw a triangle pattern on the current S&P500 - different time scale altogether, mind you - and was told by another trader "It could break either way", all I would say is "Sure it could." My bias is down, but I'm not the one to underestimate what Ben Bernank can do for the stock market with daily $billions.

The top is S&P 500 daily chart from October 2007 to January 2008. The bottom is S&P 500 5-day 15-minute chart, ending today (3/9/2011):


If it breaks to the upside, fine. I'll get stopped out of AMZN short and VXX long. I'm not worried about gold and silver stocks, because my costs are so low.

BTW, Dr. Copper has decisively broken below the trendline today.

(I'll just keep my Yahoo MB indicator in mind... The jerk is still there, though spammers are disappearing quickly. Spammers seem to have sensed a change in direction.)

Nasdaq Underperformers for the Day

Nasdaq is is up but underperforming Dow today (Dow is levitating on Bank of America Analyst Day in 3 years), but its major (momo) components are underperforming the index. Not a good sign.

The index is up 1% right now.

Nasdaq underperformers on my stock screen:

AMZN: down 0.50%
GOOG: up 0.65%
NFLX: down 5.21%
AAPL: up 0.48%
QCOM: down 0.75%
BIDU: up 0.16%
INTC: flat
RIMM: up 0.06%
CSCO: up 0.25%
ISRG: up 0.63%

On the other hand, overperformers are:

YHOO: up 1.44%
ORCL: up 2.59%
AMD: up 2.48%
WDC: up 2.85%

Watch Dr. Copper for Market Direction...

Copper, I've learned, tends to top before the general market does. It is at a critical support right now (on a log scale).

Here's the chart of copper from Breakpoint Trades guys. It is a still shot, EOD Friday. But today, copper sits right at the trendline from June 2010:



Here's a dynamic link to the chart.

S&P500 Ends Below Trendline On a Log Scale

On a linear scale, it sits right on the trendline from September 2010.

So here's the chart on a log scale. The index sits inside the lower bollinger band, thanks to the late buying (again). RSI shows negative divergence, but not on MACD, Slow stochastics. MACD histogram is negative. Despite the jerky moves every day, not much of a clear sell signal, yet.


It's hard to see on the chart, but the bollinger band is very tight, again. Big move coming? But then again, you wouldn't want to join hundreds of hedge funds who want to pick the top and be a hero.

If it is indeed correcting more than it already has, I've put Fibonacci lines in the chart. Don't hold your breath for the downside, because I don't sense much negative sentiment in the market. This may be just a minor correction, even smaller than the November 2010 correction (the pattern looks similar), and as soon as it retakes the trendline it may be off to the races again.

But then again, my personal, unscientific indicator is saying more downside. Spammers are still there. The know-it-all jerk is still there, spewing insults and calling the end to the downside. We'll see. I'm happy with all my positions - almost all long (gold, silver, iron ore, oil, VXX), and one short (AMZN). I'll think about the next move if the index retakes the trendline.

Friday EOD Ramp-up Time!

And here we go. Out of nowhere comes algo dip buyers - it's Friday, you know. You can't end the week on a depressed note...

At this point, I can only laugh.