3 Bears for the Markets
These days there doesn’t seem to be much in the way of good news out there anymore. What with Greece, the looming recession and all the market technicals looking negative we have three big bears (at least) roaring in our faces. In todays commentary Chris Ciovacco Chief Investment Officer of Ciovacco Capital Management tells us how these bears are lined up and what to expect next. Tim McMahon, editor.
Greece, Recession Odds, & Technicals All Bearish
While inspectors from the International Monetary Fund, EU and European Central Bank, known as the troika, are in Athens to review the books, Reuters reported Sunday:
Greece will miss deficit targets set just months ago in a massive bailout package, sources said citing a budget draft being adopted by the cabinet on Sunday, in a setback in Europe’s efforts to stave off the country’s bankruptcy.
Two sources confirmed the new budget numbers, which predict a budget deficit of 8.5 percent of gross domestic product (GDP) for this year and 6.8 percent next year, compared with targets of 7.6 percent for this year and 6.5 percent for 2012.
With Germany hinting last week the terms of the bailouts may need to be revisited, these latest developments may put more pressure on financial markets as we enter October. Back in the United States, more economists and economic forecasters are migrating to the recession camp. From the Economic Cycle Research Institute’s (ECRI) website (9/30/2011) :
Early last week, ECRI notified clients that the U.S. economy is indeed tipping into a new recession. And there’s nothing that policy makers can do to head it off. ECRI’s recession call isn’t based on just one or two leading indexes, but on dozens of specialized leading indexes, including the U.S. Long Leading Index, which was the first to turn down – before the Arab Spring and Japanese earthquake – to be followed by downturns in the Weekly Leading Index and other shorter-leading indexes. In fact, the most reliable forward-looking indicators are now collectively behaving as they did on the cusp of full-blown recessions, not “soft landings.”
From a technical perspective, September closed out with numerous long-term bearish signals present on weekly and monthly charts (see table below). The signals below tell us the odds favor bearish outcomes in October. Could stocks rally instead? Sure they could, but it is the lower probability outcome given the fundamental and technical backdrop. The downside potential of stocks and the euro we outlined on September 23 remains in play as we head into the typically volatile month of October.
See the full article here
Market Parallels to 2000 and 2008
The typical financial disclaimer reads, “the past is no predictor of the future” but learning from historical markets is definately a good thing to do. For some time now Robert Prechter has been telling us to expect a double dip with 2008 being the first wave down. Today we are going to look to Chris Ciovacco, Chief Investment Officer of Ciovacco Capital Management. Typically Chris is a bit more upbeat than Prechter, lets see what he has to say as he compares current market conditions to 2000 and 2008. ~ Tim McMahon, editor
Parallels To 2000 And 2008 Should Not Be Ignored
Before you read your favorite author’s work relative to the outlook for today’s markets, we invite you to go back into their article archives and see what they were saying in early 2008 and the summer of 2008. On February 13, 2008, with the S&P trading at 1,348, we published Technical Breakdowns Call For More Hedging. Unfortunately, much of our analysis from early 2008 applies to the current market, which is showing indications that a new bear market may be on the horizon. Continue reading
Gold vs. Silver Ratio
As anyone who has read my articles for any length of time knows, I am a big fan of ratios. I find them very useful for tracking the comparative value of things especially when presented in chart form. Over the years I have tracked the Gold vs Oil ratio, Gasoline vs. Oil, and many more. Generally they are used to target underpriced sectors so you can tell which one is a better investment.
But in today’s article Nico Isaac shows us that by looking at the Gold/Silver ratio we can tell something else and that is how conservative the investing public is. Continue reading
Six Straight Weeks of Decline Take DJIA Below 12,000: What Now?
Before blaming falling stocks on the most recent weak economic reports, let’s check some dates.
As of June 10, the Dow has suffered the “longest losing streak since the fall of 2002. The market’s last seven-week stretch of losses began in May 2001, as the dot-com bubble deflated,” reports The Associated Press.
As for why stocks are falling, most observers agree: Blame “weaker hiring, industrial output, and a moribund housing market.” The economic reports from the past two weeks made that clear.
But wait a minute. The DJIA didn’t top in the past two weeks — Continue reading
Your Chance to Learn How to Forecast Markets Using Technical Analysis
EWI’s Senior Tutorial Instructor Jeffrey Kennedy gives you practical lessons — free
September 17, 2010
By Elliott Wave International
There are two camps of market analysts out there: the fundamental camp and the technical one. Fundamental analysts look at things like the GDP, unemployment, interest rates, etc. to make logical assumptions about where the stock market is going.
Technical analysts use none of that. They look at the market’s internals to gauge the trend: things like momentum, trend channels — and yes, Elliott wave patterns.
And this is your free chance to learn how they do it. Continue reading
Right on the Money eBook Version
Get Adam Hewison’s eBook version of “RIGHT ON THE MONEY: The definitive guide to forecasting foreign exchange rates,” for FREE! Learn the same trading principles that major banks and hedge fund managers use every day to make millions.
“Stocks and Commodities Magazine” reviewed his book and called it “a killer product”.
Leo Melamed, credited with creating financial futures in the United States, wrote in the foreword to Adam’s book, “… excellent educational reference for every serious trader.” Continue reading
Elliott Wave Forex Trading Video: It’s Not The News That Matters
By Jim Martens
How to apply the Elliott Wave to Forex Trading
The standard explanation mainstream financial analysts and some forex trading “experts” use when talking about a market move is, “The market did that because of such-and-such news report.” But if you’ve been forex trading long enough, you know that all too often, the market’s reaction to the news is the opposite of what it’s “supposed” to be. In this video Elliott Wave International’s Senior Forex Trading Strategist, Jim Martens, explains that it’s not the news that matters when you’re trading forex — it’s the market’s reaction to the news that does — in this 10-minute forex trading video using the U.S. Dollar Index, Euro / Dollar and Dollar / Pound (cable) charts as examples Jim explains how he correlates Elliott Wave patterns to breaking news so he is prepared to capture the move in the right direction.
DJIA’s 200-Day Moving Average: Will the Dow stay above or below this demarcation line?
By Elliott Wave International
Moving averages are one of the most widely followed indicator in technical analysis.
Simply put, when the price of an index or stock stays above a particular price moving average line on a chart, that price level serves as support — a level where buyers reside.
If the price falls below a moving average line and “can’t” break through from the underside, this price level is a line of resistance — a price level where sellers hover.
That’s an easy explanation of moving averages for you.
8 Technical Indicators Point Down from Here
Back in March of 2009 at the peak of bearishness when almost everyone else was predicting the end of the world (or at least the end of the stock market) Robert Prechter took an extremely contrarian position and called for a rally from that point. And that is precisely what we got. Looking back that call seems almost prophetic. He called that bottom based on eight indicators which he said lined up on the bullish side.
Now In the April 2010 issue of his Elliott Wave Theorist he said these eight have now switched to bearish. Not one to mince words, he specifically predicted that the peak was due to roll-over between April 15 and May 7th. Considering the events on May 6th and 7th he is once again sounding prophetic. This is extremely important, the media would have you believe that the events of May 6th were the result of a typo. Prechter says it is imperative that you act now to protect yourself.
Because of the critical importance of this prediction, for those of you who don’t subscribe to EWT we are providing an excerpt from the April issue. And For a limited time, you can also visit Elliott Wave International to download the full 10-page April issue, free.
The following article is excerpted from Robert Prechter’s April 2010 issue of the Elliott Wave Theorist. Tim McMahon, Editor
What Do These 8 Technical Indicators Mean For The Markets?
May 7, 2010
By Robert Prechter, CMT
Technical Indicators
It is rare to have technical indicators all lined up on one side of the ledger. They were lined up this way—on the bullish side—in late February-early March of 2009. Today they are just as aligned but on the bearish side. Continue reading
