35854 replies to this topic

[Argento]

A, is a triangle formation with lower highs and higher lows on  the SA40 1minute-chart of any significance, or is the period too small?

Hi BBW,

 

I am careful of the smaller timeframes but given the island top scenario it is possible that the triangles could play out as normally they are bullish continuous patterns!

 

A

[BBW]

She hasn't touched the daily bollinger band yet so changes are good she kicked off a type of island top (zig zag up) aiming for 42900ish futures before doing a backtest to the 41700 breakout point!(Just my 2c scenario)

 

Then a good long opportunity for the March run!

 

A

A, is a triangle formation with lower highs and higher lows on  the SA40 1minute-chart of any significance, or is the period too small?

[bear catcher]

UK numbers not so good but bad news is good news?

[Argento]

She hasn't touched the daily bollinger band yet so changes are good she kicked off a type of island top (zig zag up) aiming for 42900ish futures before doing a backtest to the 41700 breakout point!(Just my 2c scenario)

 

Then a good long opportunity for the March run!

 

A

[mountainman]

Sorry mountain..I should have posted a link...Nothing to be alarmed about..there are just some items I'm tracking

 

http://www.reuters.c...N0LG0HN20140211

 

Whew!

I thought this was the cause of the FTSE collapse. Another Falkland War perhaps?

[mountainman]

 Is anyone tracking the Argentinian situation?

 

What situation?

I can find nothing!

[Sunesis]

Scalpers can buy 42400

[Lekkerry]

So the RSI did not play ball yesterday, so the next target for the "upper" level is apparently 428## (J200 using IG graphs) before major short opps at play.

 

Roll-on Turn-around Tuesday.

 

1d chart is calling for 4257# (J200 using IG charts). Not that far off.

 

After-which, 1d (BBand, RSI and MACD to a lesser degree) calls for a drop of 700 - 1300 points. This might happen when US returns to some work, tomorrow (purely speculative opinion this).

 

Let us see! 

[AJS]

New highs here we come!

[Sunesis]

PUMP AND DUMP

 

New Fed Chairman

 

A change in one of the most influential positions in the world has often preceded an increase in volatility in the markets.

Paul Volcker’s tenure began on August 6, 1979. Within the next year, the U.S. entered the first leg of a “double-dip” recession with a 17% decline in the S&P 500 in early 1980. A second bear market would begin later that year and a second leg of the “double-dip” recession would begin in 1981.

Alan Greenspan’s tenure began on August 11, 1987. The 1987 crash occurred two months later, with a total decline in the S&P 500 of over 35%.

Ben Bernanke’s tenure began on February 1, 2006. The U.S. housing market would peak only a few months later, setting the stage for the worst recession and Bear Market since the Great Depression. The S&P 500 would reach its peak the following October, suffering a decline of 57% over the subsequent 17 months.

Janet Yellen’s tenure began on February 1st of this year. She is assuming the chairmanship at the same time the Fed is winding down its latest quantitative easing program (see Fed Policy Change above). We are also nearly five years into the Bull Market and expansion that began in 2009. The average expansion historically has been approximately five years.

Bottom Line

While the recent vertical advance from the early February low is likely to invoke fond memories of 2013, investors should not be assuming that a repeat of last year is likely. Based on the factors outlined above, 2014 is expected to feature significantly more volatility than the average year, and certainly higher volatility than 2013. Such an environment is likely to be more suitable to tactical trading and active risk management This is not to say that equity markets cannot end the year higher (most years do), just that investors should not become complacent in believing such a move higher will be a straight line.

[Sunesis]

S, thanks for your amazing in depth view - much appreciated!! and makes lots of sense as driving forces to consider in my trading -

 

your opinion on the ZAR? technically it should reverting to mean i.e.  ZAR should strengthen, but I don't think the weakness is over and a reasonable possibility of mini breakdown to >12 or about 13.? to $ this year after which EMs will probably come into favour soon after as being heavily discounted realative to DMarkets

43300 is max for me on ALSI, but shorts should start above 42600

[AJS]

TOP40.png

Might be right AJS..Still some upside squeeze left maybe..BB gapped to be filled..SAR hasnt indicated shift in momentum yet RSI not quite there yet..CCI still some potential..Maybe i jumped the gun a bit..A false start?  Will check out what happens tomorrow on opening to decide

 

Yeah, don't think we will stall here before putting in a new ATH.

[AJS]

Quite a clear trend. Watch those weekly reversals as A pointed out. Also, check the BB...

Then also the negative div on MACD and RSI (as A pointed out).

Attached Files

•  MAR14 ALSI 1 20140217 210850.png   434.88KB   26 downloads

Edited by AJS, 17 February 2014 - 09:10 PM.

[Bev]

Negative divergence means price makes a higher high but MACD a lower high!

 

Positive divergence means price makes a lower low but MACD a higher low!

 

Example attached...this works better on the bigger timeframes like the 5H/1D and weekly charts!

 

A

Thanks Argento, I also found the info most useful.

[davidp13]

i cannot upload the chart i have, but for those that have 5min

 

draw a support line from the start of this run - see the steep incline

draw a declining line on volume - see the steep decline

 

makes one think

 

as soon as i get to upload the chart i will

i can only upload 2.1kb (stupid i think) - You can upload up to 2.1KB of files (Max. single file size: 2.1KB)

[davidp13]

i cannot upload the chart i have, but for those that have 5min

 

draw a support line from the start of this run - see the steep incline

draw a declining line on volume - see the steep decline

 

makes one think

 

as soon as i get to upload the chart i will

[OceanWalz]

 

If all this was happening in the US the markets would have crashed. What is happening in China is exactly what happened before Lehman Brothers went bust. China has bailed out more banks in January than at any given time.

 

Weakening currencies in emerging economies will eventually lead to sharp declines of imports. Those imports are of course someone else’s exports. That's why some indices will only fall later while Asian equites will lead.

 

The mechanism, in simple terms, has been QE in the developed world leading to capital flows into emerging markets, triggering an investment and consumption boom built on cheap credit. The boom led to rising wages, reduced competitiveness, less household income after inflation, taxes and rent (which rose sharply due to the real estate boom). Now, domestic and external demand is weakening while inflation is high and external accounts are imbalanced. Hence, the world will see the next chapter of the unintended consequences of QE, namely many economies going through a balance-of-payment crisis leading to recessions and banking crises and hurting global economic growth. The U.S. will be hurt too, but is the least exposed.

S, thanks for your amazing in depth view - much appreciated!! and makes lots of sense as driving forces to consider in my trading -

 

your opinion on the ZAR? technically it should reverting to mean i.e.  ZAR should strengthen, but I don't think the weakness is over and a reasonable possibility of mini breakdown to >12 or about 13.? to $ this year after which EMs will probably come into favour soon after as being heavily discounted realative to DMarkets

[Sunesis]

Key events to look out for this week

 

BOJ Press Conference Kuroda to speak Tuesday Monring between 06h00-08h00

 

FOMC Minutes Wednesday Evening 21h00

 

China PMI'  Thursday Morning 03h45

[Sunesis]

adding to short at 600

Sell the rallies is my game now

 

It's hard to short rallies as it is hard to buy dips.

 

One thing i know is that both will make you money in a medium term.

 

VIX is back to buying levels, this means stocks will crumble in the near future. Give them 1-2 months

 

The next selloff will not be a dwarf

 

It does not mean stocks wont go higher, it just means caution with the buying

Maybe 1880 max on S&P

FTSE will hit a double top around 6850

ALSI will hit top of channel then selloff, weekly divergence just too strong

 

Seasonality will come to bears favor soon. Just stack the shorts and forget about the rising markets.

[Sunesis]

Is it safe to short the alsi yet??

 

I would say wait for at least end of March before taking any shorts. For now just scalp, don't commit to a trend yet. Bullish season will come to an end soon.

 

Those with big accounts can start piling the shorts above 42600

 

 

Bulls Case

 

• Bad news is good news.
• Trend is your friend.
• Developed markets are in a deflation so more easing will be needed later.
• Yellen said they will stop taper if US economy slows

Bears Case

 

• Fear creeping in gold moving up, which means stocks will be bust soon.
• Bullish Season almost over
• Markets cannot run for more than a year without a 10% correction
• More taper less credit
• EM Markets crisis just beginning, 
• Divergence on ALSI weekly pointing to a drop around mid April, which so happens to be Japan tax hike season

 

China Crisis

• Now, we see all the signs one usually sees before the bubble bursts. For instance:
•  

•  Large expansion and acceleration of credit not matched by GDP, as credit growth is still 2.5 times faster than GDP but slowing.

• An aggressive expansion of a shadow banking system (wealth management products WMP) that has similarities to the U.S. subprime loans.

•  Massive investments in property leading to a bubble in many locations. Tier 3 and 4 cities already see real estate prices declining, while prices are still rising in tier 1 and 2 cities.

•  Weak risk management at financial institutions similar to U.S. and European banks before the Great Financial Crisis. There are recurring stories of banks in trouble in China and the government throwing money at them. Recently, some shadow banking institutions went bust and investors lost money.

•  Finally, a heavily state-directed financial and corporate sector, which in China is a given, primarily in banking. In the U.S. it was Freddy Mac and Fanny Mae.

• Rising interest rates driven by competitive bidding for funding, not by central bank tightening. We saw this first in spring 2013, then in December of last year and now again.

  China is facing the ugly choice of either deflating the bubble, hopefully in a controlled way, or of re-inflating even more, leading to an even bigger debt crisis further down the road. 

If all this was happening in the US the markets would have crashed. What is happening in China is exactly what happened before Lehman Brothers went bust. China has bailed out more banks in January than at any given time.

 

Weakening currencies in emerging economies will eventually lead to sharp declines of imports. Those imports are of course someone else’s exports. That's why some indices will only fall later while Asian equites will lead.

 

The mechanism, in simple terms, has been QE in the developed world leading to capital flows into emerging markets, triggering an investment and consumption boom built on cheap credit. The boom led to rising wages, reduced competitiveness, less household income after inflation, taxes and rent (which rose sharply due to the real estate boom). Now, domestic and external demand is weakening while inflation is high and external accounts are imbalanced. Hence, the world will see the next chapter of the unintended consequences of QE, namely many economies going through a balance-of-payment crisis leading to recessions and banking crises and hurting global economic growth. The U.S. will be hurt too, but is the least exposed.