Chart Analysis

[vectorman]

Point of decision, will there be profit taking or more accumulation?
The VIX is sitting on support and looks really to snap back up if investors get nervous. There might be one more push down with the Employment Report tomorrow , but its looking questionable. There are two gaps left open. I circled previous gaps, and has you can see they all were eventually filled.

View attachment 2765

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX

 

[vectorman]

The SPX index looks to be at the top of a down trending channel that includes an unfilled gap. The gap is probably what trapped alot of Short investors thinking of a quick reversal, but it looks like the Big Boys really put the screws to them. Looking at the VIX, if not tomorrow, then sometime next week there may be some profit taking. This outlook may fit well with the TSPtalk Sentiment Survey showing a Sell.

View attachment 2766

 

[vectorman]

Now for my " this may be a stretch outlook". I see a possible Head and Shoulders forming on several indexes. The NASDAQ has a couple of gaps to fill and it may be in the process of forming a right shoulder in a Head and Shoulders pattern. The Fed is fighting to keep the country out of recession, so with the interest rate cuts this may bring this pattern to a quick failure.

View attachment 2767

http://stockcharts.com/school/doku...._analysis:chart_patterns:head_and_shoulders_t

 

[clester]

1490 is now a very strong support level. The "Fast money" guys are all on buy and they seem to give good advice (not self serving). So, the downside should be limited at 1490. A lot of folks will buy it there. Limited downside risk. We may test 1490 today. Sentiment survey may be early again.

 

[Bullitt]

I thought I saw a reverse head and shoulders formation as well.

 

[vectorman]

I thought I saw a reverse head and shoulders formation as well.

Your right, I should have included it, but I didn't see the volume normally associated with that pattern. With the bearish sentiment I also thinking a some want double bottom pattern also. If there is a right shoulder forming the market will still go down to form it. Probably another backtest off the previous inverse H&S neckline, this will also set up for a good start for a higher low to start the process for an uptrend confirmation. SPX chart below:

View attachment 2773

 

[vectorman]

DJIA chart. With the interest rate cuts, I don't know why the first inverse H&S failed. IMO the Fed and Washington Talk is the only thing that is keeping this market from tanking. But the Market is always right no matter what anyone else thinks or says.


View attachment 2774

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=DJIA

 

[poolman]

DJIA chart. With the interest rate cuts, I don't know why the first inverse H&S failed. IMO the Fed and Washington Talk is the only thing that is keeping this market from tanking. But the Market is always right no matter what anyone else thinks or says.


View attachment 2774

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=DJIA

I'll be honest with you.

This market has rallied 600 points on a federal rate cut for next Tuesday.

Risk/Reward IMO.... I may just stay in the G fund right through it. I don't see a .50% rate cut. It is not warranted. Could it happen ? Yes, Will the dollar tank ? Yes....

I will say this. The parking lot's for the shopping mall's and Big name stores are not busy like they were this time last year.

 

[vectorman]

I'll be honest with you.

This market has rallied 600 points on a federal rate cut for next Tuesday.

Risk/Reward IMO.... I may just stay in the G fund right through it. I don't see a .50% rate cut. It is not warranted. Could it happen ? Yes, Will the dollar tank ? Yes....

I will say this. The parking lot's for the shopping mall's and Big name stores are not busy like they were this time last year.

http://www.wisegeek.com/what-is-stagflation.htm

 

[Bullitt]

Vectorman,
That reverse head and shoulders didn't take long to develop either. Patterns that set up quick fade quick and lack the desired power. Also, if the reverse H&S happens, in theory it would only take us up to around our prior highs.

 

[Tempest]

I will say this. The parking lot's for the shopping mall's and Big name stores are not busy like they were this time last year.

They're buying from online. Cheaper then driving around.

Har.

 

[clester]

1485-1490 is major support. If we bounce now after the FED sell-off we're off to the races. IMO. This may be what the Dr. ordered. Here comes Santa claus, here comes Santa Claus.....

 

[vectorman]

1485-1490 is major support. If we bounce now after the FED sell-off we're off to the races. IMO. This may be what the Dr. ordered. Here comes Santa claus, here comes Santa Claus.....

From Fed statement...

" Readings on core inflation have improved modestly this year, but elevated energy and commodity prices, among other factors, may put upward pressure on inflation. In this context, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully. "

They have seen the numbers for PPI and CPI coming out Thursday and Friday, the numbers may be a little hotter than what's expected.

http://www.usatoday.com/money/economy/2007-12-11-statement_N.htm?csp=34

http://www.tsptalk.com/mb/showpost.php?p=136658&postcount=41

 

[clester]

The economy isn't as bad as everyone thinks. At least that is what the FED is saying. That should be good for stocks. "Here comes Santa Claus..."
I can dream can't I?

 

[vectorman]

The economy isn't as bad as everyone thinks. At least that is what the FED is saying. That should be good for stocks. "Here comes Santa Claus..."
I can dream can't I?

I did alot of dreaming in 2001 and 2002.

View attachment 2802

Take a look at the link below. Compare the rate cuts from Jan 2001 to Nov 2002 and how the market enjoyed those cuts.

http://www.the-privateer.com/rates.html

 

[vectorman]

I'll let the chart speak for itself.

View attachment 2804

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=NASDAQ

 

[Wolverine]

Are you thinking with the current situation that, the 2001-2002 situation could be coming back according to that chart?

 

[Birchtree]

Turn the chart upside down for directional clarity.

 

[vectorman]

Are you thinking with the current situation that, the 2001-2002 situation could be coming back according to that chart?

No, I'm not saying that. But the market is what it is. No matter how much I dreamed or said the market will come back up in 2001 and 2002, the charts clearly indicated ( using MA, RSI, MACD, etc...) problems in the market. Depending on your timeframe, if you dollar cost avg like Birchtree, it doesn't matter what the market does because it will eventually go up. But time is you biggest obstacle. Just an added note...clester and I are great buds, I wasn't taking a shot at him. We talk about this stuff all the time.

 

[vectorman]

Turn the chart upside down for directional clarity.

Thanks :laugh:

View attachment 2805

http://www.fxwords.com/b/bearish-shooting-star-candlestick.html