Disqus - Latest Comments for bobdog

Re: A Quick Assessment of the May 6 Fallout on the 5 Cross Market ETFs

Bob — Fri, 07 May 2010 06:53:30 -0000

Yesterday's reports of a accidental trade triggering a massive sell-off points to a larger systemic risk. Didn't we learn something from the "too big to fail" risk associated with the financial crisis.

If a single computer trade can, with one click of a mouse, initiate a trade so big it triggers the overall markets into a free-fall, the financial markets and the overall global financial structure underpinning this economic model is in serious jeopardy.

When trust is at the core of functionality, fear and distrust result in a system that ceases to function properly.

Re: Looking Back and Forward on the SP500 Slow Creeper Trend

Bob — Sun, 07 Mar 2010 12:30:49 -0000

Hey Corey...
Some conflicting measured move projections... hoping you might add some clarity.

Off the Feb 5th low to the Feb high, a measured move projection targets $116.10;

If one goes back to the early Feb. bottom, price formed a bear flag pattern, which contained a H&S pattern. The failure of that H&S pattern looks to be the "start" of the move (rally). Using this as a starting point, a measured move projection targets $114.10;

Off the late Feb low, price rallied in a fractal five wave pattern up and formed a triangle at the top. The break of that triangle points towards further upside. A measured move price projection here, points towards a target of $115.88.

So, I see three distinctive measured move price targets... can you offer perspective on these and how to weigh there respective significance?

Thanks! Bob

Re: BIDU: What a Difference a Day Makes

Bob — Thu, 14 Jan 2010 08:10:17 -0000

Wow... The timing of this announcement couldn't have been more favorable for BIDU. Price seemed to have hit a tough level of overhead resistance and momentum looked to be waining. A slide off the edge seemed, oh so very near.

It will be interesting to see if this news event will be just a momentary blip effecting price or whether there will be reall follow thru with buyer's taking it to another higher level. A break above the highs on volume will be telling!

Re: Comparing the US Dollar and SP500 Relationship Since 2007 Peak

Bob — Thu, 31 Dec 2009 10:30:58 -0000

(PPT) Plunge Protection Team???? Hmmm. That would imply market manipulation wouldn't it. Is the concept of free and unfettered markets a ruse?

Certianly their is some small time market manipulation occuring for personal or institutional gain, but what of larger scale manipulation to fight a "bigger war", preservation of the global status quo? And if you use the term, WAR in the absolute sense, "all's fair..."!

However, it's nice to think the SEC is vigilant and protecting the public!

Re: Comparing the US Dollar and SP500 Relationship Since 2007 Peak

Bob — Thu, 31 Dec 2009 08:00:40 -0000

Consider the macro picture - For the equity markets to move higher, a correction is warranted to adjust for the divergences and allow for this rally to settle out. Also, this retracement in the equity markets has certainly taken it’s jolly time. In part, it's due to the government intervention; the actions were meant to be a band aid to stem the bleeding and allow for time to heal the wound. It’s been effective- disaster was averted and consumer confidence is improving, but we are not out of the woods yet. Buying time is still important!

Put on your economics thinking cap and ponder what would be the very best scenario going forward? Long term low borrowing costs for government, business and the consumer; a shallow pull-back in equities and commodities, followed by a continuation of the rally; improved consumer confidence and a pick up in spending; stagnant inflationary pressures. Successfully achieving these goals would be most favorable. It would stimulate the economy, address market divergences, shore up and embolden the confidence of the consumer/investor. The last thing we need now is sky rocketing prices and containment actions by the Fed.

The USD is one big stick the government can manipulate most readily to move the markets and tweak the economy. Watch it closely…

In light of the macro perspective, now consider the possible Elliot Wave structure to the USD price action… The second high of $90 in early 09 may represent the completion of wave #2. The recent five wave leg down, the completion of wave #3. The current rally, may represent leg (A) of a corrective ABC rally. If this is the case, price may sag to seek support followed by a measured move to higher highs (the completion of the corrective rally and leg #4), before a start to the final leg down #5.

Oh, also look in the press - you're not hearing the pundits talking up a move back into the USD. The long term outlook for the USD is still "down".

Food for thought...

Re: A Look at the Two Dual Rallies in the SP500 and US Dollar Index in 2009

Bob — Wed, 30 Dec 2009 09:13:26 -0000

I recently read a article which presented a solid arguement for US Dollars moments of strength being closely tied to global uncertianty. Events like war, oil disruption, regional political instabilities and terrorism now seem to be having a more significant "flight to quality" effect. Of late, the US Dollar seems to be a beneficiary.

It would be interesting to go back and review global news highlights to see if the noted divergences between the USD & S&P were also associated with an event that produced a "flight to quality effect". It's possible there is a skewing effect impacting the USD price structure.

Re: A Look at the Yield Curve at Market Tops and Bottoms

Bob — Mon, 28 Dec 2009 15:47:39 -0000

Interesting observations. I don't know how much significance one should now place on historic yield curve shapes as compared with current shapes. The Fed has taken extra ordinary measures to stimulate borrowing and as such the short end of the curve is at essentially zero. In addition, the U.S. Treasury has taken up the cause too; buying Treasuries and artificially hold longer term interest rates down; the effect is added liquidity and lower long term borrowing rates. Help for the troubled home refinancing sector of the economy. These actions are distorting the yield curve. Without such actions, we would certainly be seeing a flatter curve, if not inverted.

Also, one might argue,... with the yield curve so steep, the Fed now has some room to maneuver. A bump in short term interest rates would put the yield curve back into a more normalized shape.

Re: After Looking Strong BIDU Begins Falling off a Cliff

Bob — Wed, 23 Dec 2009 06:52:57 -0000

After what appears to have been a five wave expansion, the breaking of the 20 & 50 EMA is certianly a bearish development.

At the moment, price may be near a level where it can find support. Go back to the mid-October gap down. Notice the retracement that occured into early November. The candle bodies reached $398 before a doji formed and a reversal occured. Key on this doji and look at other price swings that have inflected at this level; over time it has been a key level of support & resistence (In late September, a bull flag formed that found support at this level. The expansion rally that followed, retraced into support at this level too). It should have an influence here too. Watch for a pause here and a possible retracement up into the converging 20 & 50 EMA as they roll over the top and suppress. Alternately, price could gap down from this level which would indicate a more severe and bearish tone.

Other key price levels to watch, which are located just underneath, include $384 (two gaps and a doji have formed at this level) and $370 (two major price retracements have found support at this level and the July rally topped there too).

Merry Christmas All!

Re: A Look at the Recent Fall in Potash POT Dec 20

Bob — Mon, 21 Dec 2009 07:04:58 -0000

Potash (POT) is a fertilizer mining company producing a core commodity used by agriculture and is closely tied to Oil (petroleum based fertilizers) and the USD. Of late, POT price action has moved inverse to the USD, as have most other commodities.

However, Oil has recent bounced and price there is running counter to the trend (at the moment this seems odd). As a result of Oils strength, POT should be getting some degree of support.

Watch the USD and Oil closely this week for additional confirmation of POT price directionality.

Q's? Is Oil's divergence signaling a potential reversal of the USD and commodities? Will Oil reverse and move in concert with the other commodities? Is there a greater USD rally yet to come or will it meet resistance and head south again?

Hmmm.

Re: Year to Date Elliott and Momentum Look at the Dollar and Euro Indexes

Bob — Sun, 20 Dec 2009 04:56:07 -0000

In both charts, critical chart features to note are the gaps that occured on or about September 6th. These features mark a moment in time where price broke a major technical level (support/resistence). As price retraces, these levels are now significant. For the USD, this key level of resistence is near $78.50; XEU it's near $142.50. Price should respect these prior levels and candles will often take the form a doji there.

Also, note the respective 200 SMA in relation to each of these key levels; convergence. With the SMA positioned just on the other side of key price levels, price will often pierce the key S/R levels, to reachout out and tag the 200 SMA. Once a touch is achieved, price often reverses to seek the support of the 20 /50 EMA to pause and catch its breath before gathering itself for another push.

With the the USD relationship is so closely tied to all other markets, consider the implications a near-term retracement in the USD might have. The equtiy markets are at a critical juncture. A shallow retracement in the USD might just provide enough support to bouy equity markets and give price another chance at breaking above key resistence levels. Hmmm.

Re: A Year to Date look Volume and Volatility in the SP500

Bob — Thu, 17 Dec 2009 07:55:39 -0000

The prolonged trading range in the S & P can also be viewed as a period of transition and rebalancing. Those who've been long the market are likely unwinding some of their positions here, while others late to the game are trying to board the gravy train. The ultimate question... "Can this fat turkey fly again"?

Also, a prolonged trading range is advantageous to larger institutional players. It allows them to unwind large volume positions slowly and discretely without attracting too much attention.

Re: A Year to Date look Volume and Volatility in the SP500

Bob — Thu, 17 Dec 2009 07:29:16 -0000

If the big institutional players are in fact holding until year end to ensure their fund performance numbers are secured, which is a solid hypothesis, a shift might be visible just prior to year end; increased large block selling to lock in gains and increased short interest. So far, this hasn't happened, but some may get an itchy trigger find, jump the gun and start a cascade of selling. This rally could unwind in a hurry if there's volume participation.

Re: A Pure Price Look at the Recent SPY Trading Range

Bob — Sun, 13 Dec 2009 08:01:31 -0000

Great perspective... Consider this too: The two horizontal price channels truncate some price spikes. This is valid and price has been mostly contained within the horizontal bounds, but consider including the price spikes. When one draws trend lines through the absolute highs and lows the pattern is a broadening triangle (megaphone). The current bounds defined by these trend lines fall at $112.30 and $107.80 respectively.

Also, note the gap which occured Nov. 9th. A touch of the lower bound of the megaphone would retrace to touch the gap; certianly a key chart feature that's possibly in play.

Bob

Re: Technician’s Edge: Key Trendline Breaks in US Dollar Index

Bob — Fri, 11 Dec 2009 08:25:14 -0000

This turn of events seems most significant. The completion of a fifth of fifth wave structure (http://blog.afraidtotrade.c...
coinciding with a dominant trendline break. Hmmm. Might be interesting to consider how the Andrews Pitchfork grid is playing out too... (http://blog.afraidtotrade.c...

The 50 EMA is now acting as support, but often price will retrace down retest the old trend line(s) before a more substantial rally gains traction. These trendlines add two more clear levels of support which price may bounce off if a retracement down occurs.

It's worth watching this closely; almost everything is tied to the US Dollar and moving in concert of late.

Re: Choppy and Volatile Range Boundaries for SPY

Bob — Thu, 03 Dec 2009 09:28:41 -0000

The S&P is at that key 50% retracement level, a nice bounce off the bottom; the bulls have been pushing this market higher while market internals point to a correction; the financials are already sagging; commodities are way extended and we are in one of those "choppy - toppy" periods where a battle is taking place. Will the markets continue to rally and go higher? Hey, that would be a nice Christmas present; maybe a miraculous gift.

However, lets keep in mind, this global economy is the equivalent to a giant super tanker; course corrections lag. While the long term pundits rally behind a super cycle, the fact of the matter is, near term, our economies are in distress. 10%+ unemployment is no joke! Government spending and other stimulus measures are patches on a bigger problem. Ultimately, comsumer spending must increase for our economies to gain real traction and drag us out of this quagmire. Really now, how many are feeling really good about their fiscal health? Is spending free and easy? To me, it certianly feels different than a few years back.

Now consider government; massive stimulus spending; increasing debt burdens; state and local short-falls; unfunded liabilities... yeah, that pictures pretty rosey! I think we can expect fewer services and more taxes in the future. That's not going to help.

We did weather a brutal storm and we will get thru this, but I expect it will take a bit longer to rebound than many have patience for, and their is likely to be some real pain yet to come.

Re: One of the Best Intraday SPY Rounded Reversal Examples

Bob — Sun, 22 Nov 2009 08:33:05 -0000

Rounded reversals resolve in an interesting fashion. In this example, the curve, defined by drawing a line thru the lows, forms a bottom that rounds up. At the same time, price is getting squeezed to the downside by the EMA's. This results in a compressing of price and often a formation of a triangle-like pattern near the bottom of the curve. The potential energy that builds generally results in an explosive coiled spring break out; the result of a trendline break and the "popped stops" effect.

In longer term RR patterns, one often sees repeated attempts by price to round up. Failures can be identified by sudden fast price drops that yield new lows and an extension of the rounded reversal pattern. Such failures redefine the shape of the curve and set the stage for another attempted rally. After time has passed and wounds have healed, buyer's re-enter for another go.

Re: Goldman Sachs GS Threatens to form Cradle Sell Signal

Bob — Fri, 06 Nov 2009 20:42:41 -0000

Seems like the two time frames and respective moving averages create a squeeze of sorts, where price is trapped and likely to trade in a narrowed range until one side wins out.

Wouldn't the longer term weekly moving average carry greater weight; a dominant level of support?

I wonder if such a squeeze is similar to a consolidating triangle, where tension and potential energy build and then price ejects violently?

Also, there are certian to be stop losses on either side of the moving averages; any break in either direction would be magnified by covering and those scrambling to get on the right side of the move.

Re: The Difference Between Logarithmic and Arithmetic Trendlines

Bob — Thu, 05 Nov 2009 07:04:16 -0000

Q? When applying fib tools (grids, fans, arcs) does it matter whether you use a arithmetic or logarithmic setting?

Bob

Re: Keep Your Eye on the Volume Surge in the UUP Dollar ETF

Bob — Thu, 29 Oct 2009 07:07:36 -0000

Good post! It's important to step back and take in the broader perspective, and the influence of the USD is arguably the most significant leading macro influence.

Cheers!

Re: Turnabout is Fair Play - SP500 Daily and 60min Oct 21

Bob — Thu, 22 Oct 2009 07:50:06 -0000

Whether this is "the" correction or just a pull back, in time we'll know, but a correction to this rally is overdue. On a persoanl note, it sure felt like this last run up was based on emotion.

The VIX hit rock bottom yesterday moving inversley to the equity markets; Isn't that capitulation?

In the .SPX (daily chart) a broadening triangle is evident; note the five oscillations contained within. The lower trendline also happens point towards the 50 day Moving Average (1040) and falls just below the MA, but above the Bollinger Band. This level may be the "line in the sand" price may target.

Good day all!

Re: Recent Measured Move Retracements in SPY Oct 21

Bob — Wed, 21 Oct 2009 18:47:20 -0000

In looking at the chart, it appears price moved up in three distinct waves. The first wave concluded at a high of $106, the second $108, and the third wave appears to have formed an expanding triangle with a lower bound being at about $109.09. The retracement lows when connected do appear to take on a rounded reversal shape. Combined, these two patterns, rounded reversal and expanding triangle have bearish untones.

Late afternoon; a break down in price, a violation of that lower bound of the triangle and a violation of the arc did in fact occur.

Re: Bullish Elliott Wave Fractals on the US Dollar Index Oct 18

Bob — Mon, 19 Oct 2009 18:36:10 -0000

Since the USD is moving inversely, but in concert with gold, silver, oil and the equity markets; one would expect the Elliot Wave counts in these to align and show close similarities, but inverse directionality. While the counts can often get confusing, multiple indices moving in concert and having similar wave characteristics, provide enhanced clarity.

Re: If History Repeats, Will it mean New High for SP500?

Bob — Wed, 07 Oct 2009 14:50:30 -0000

A bounce here at these levels is OK, and so is a pull back. Doesn't really matter, does it? Trade the market...

Last quarter, going into earnings the markets had pulled back and sat at the brink testing key support; earnings proved better than expected and the markets rallied strongly.

This quarters earnings are starting today. With the market having rallied strongly going into earnings it isn't as favorable a set up for extending a rally... has this rally been a "pump and dump" set up?

Re: Advanced Fibonacci Confluence Projection in SLV Silver ETF

Bob — Tue, 06 Oct 2009 09:37:43 -0000

From the July 09 low, price has advanced and looks to be in the fourth wave of a fractal expansion. When considering the upper target of this total expansion, the gap ($15.37), evident in the third wave, should be representaive of the halfway point in the overall expansion. Since proportion should also be expected, the $3.07 move to the halfway point, gives an estimated price target of $18.44.

There seem to be a number of elements pointing to the low $18's as a probable inflection zone.

Re: Advanced Fibonacci Confluence Projection in SLV Silver ETF

Bob — Tue, 06 Oct 2009 08:49:21 -0000

Over night the USD weakened dramatically. Across the board, commodities are up strongly in pre-market trading. Recent highs - Oil (light) $71.55; Gold $1030.20; Silver $17.06. At least at the open, this should have a significant and favorable impact on the equity markets and support a continuation of the rally.