I was looking at some gold charts and Gann inflection points last night, and the probability is that the current gold correction does not go much lower than $1336/oz.
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That would put price at a 1X1 if it dropped from here and at the last swing low..........FEB 1334 roughly!
ReplyDeleteSHORTING now the ES................and hold!
ReplyDeleteParker, I am curious to know what time frame your assessment covers. Gold has been exhibiting a cycle that varies between 11-13 months for a while. Since the significant bottom of Feb.2010 that would "suggest" another pullback low from January to March. Since gold is in a strong bullish cycle I do not expect the pullback to be any worse than the last one. Let us all know how your above view fits time wise.
ReplyDeleteThanks Cycleguy
ReplyDeleteAs I explained in this post:
http://position-sizing.blogspot.com/2010/12/money-flow-t-status-reviewupdate.html
I expect dollar strength/euro weakness to end around ~12/20, and therefore the current gold correction to end around ~12/20. In other words, ~$1336 by ~12/20.
The next Money Flow T cycle high I have for gold is in early February, which coincides with a dollar Money Flow T cycle low.
I have a final Money Flow T top for the current gold run in May 2011, which happens to be: 1) seasonally correct for gold, 2) about the time QE2 ends, and 3) about the time of Martin Armstrong's 8.6 year confidence cycle low.
For further clarification, the date projection (~12/20) is likely more accurate than the price projection (~1336).
ReplyDeleteParker......
ReplyDeleteWhat is the difference in your and Terry's projection as it looks from his audio he has given up on the drop first in the Dow? Tx
j
ReplyDeleteI am sure Terry will explain his position in detail on Sunday.
lots of support at 1330 - if Euro falls to the 1.26 area then I would expect gold to get below 1330 to 1265ish...
ReplyDeletehttp://www.zerohedge.com/article/pomo-post-mortem
ReplyDeletePRPFX was my core holding until I got spooked out of everything in April and (stupidly) started to short this market (but that's a long story!) -
ReplyDeleteWhat is interesting is that in trying to review what I missed I went back to my charts for PRPFX and found this great 144 aroon indicator that is showing NO SIGNS of breaking down yet...
http://stockcharts.com/h-sc/ui?s=PRPFX&p=D&yr=3&mn=5&dy=4&id=p10435002825&a=185610811
I understand but are you saying your T analysis can come up different.........I am kinda new to it trying to figure the difference....
ReplyDeleteNot trying to put you in the middle Parker just trying to get a cycle handle on the basic difference as you are both talking the same language but much different results.....
ReplyDeletethe 144 aroon on the spx had a BULLISH cross off the Nov low...I'll post an annotated chart in a while.
ReplyDeleteVERY INTERESTING...?
Scott
ReplyDeleteI rarely use Aroon. How is Aroon 144 better than MA crosses?
I looked at the S&P and the 144 day Aroon had a bullish cross a couple days before the Nov 5 top.
Scott, I like your chart but one thing is sure: this indicator, as almost all others, reacts to price, not the opposite. So we will always have a price reversal first which, if it holds long enough, will produce the aroon reversal afterwards. What I mean is that Aroon144 does not prevent SPX to reverse in one week or, for that matter, in one hour. To me those indicators just...indicate what has been the major trend until recently.
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=3&mn=11&dy=0&id=p40418956352&a=181057452
ReplyDeleteHere's the 144 aroon on SPX - what the indicator seems to do well is confirm bullish or bearish crosses of the 200MA and it seems to keep you on the right side of the trend for extended periods.
It missed the flash crash and it didn't confirm bullish move off the august bottom until right at the NOV 5th "high"...BUT it would have kept you from shorting this pullback or the other pullbacks prior to the flash crash.
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=11&dy=0&id=p06258243210&a=181057452
I'm going to try to refine this in conjunction with my 60 minute spx ema indicators (see last chart).
http://stockcharts.com/h-sc/ui?s=$SPX&p=60&yr=0&mn=1&dy=15&id=p15776952994&a=204985206
Alternate Forecasters: Just a heads up to one of the forecasts I like to look at. It/He is
ReplyDeletehttp://www.aaforecast.com/ and comments
"The graph to the right is the forecast for the IShares ETF for gold: IAU.
The low point is forecasted to occur on Dec 14 at a value of $13.20. The forecasted high point is $14.77 on Feb 24, 2011.
There are a many reasons why gold might appreciate over the next few months not the least of which is Bernanke's printing press. Commodities are a reasonable investment choice when the specter of inflation looms. Commodities have the additional advantage of not suffering from exchange rate risk."
This stuff is not archived and is updated on Sun so you will have to do a screen shot and put into Paint if you want to track it.
Also Marty Chenard at Stocktiming (he's all technical) has interesting comments on divergence today and why it isn't working - he says its becasue of Liquidity inflows.
http://www.stocktiming.com/Friday-DailyMarketUpdate.htm
Just passing on other ideas
carl
ReplyDeleteI AGREE! that is why it missed the flash crash and works better on an actively managed fund like PRPFX -
BUT it still would have kept me from trading my wildly up/down short position in May through August...
If you ONLY traded this indicator to confirm moves above or below the 200MA over the last 20 years you would have been on the right side of the trend 80% of the time...food for thought I think.
Has anyone else noticed that the Nasdaq is up almost every day since the low in August, that is 4 months now of positive closes. Seems like a record to me.
ReplyDeleteParker - it is definitesly not a short term trade tool but confirms the longer trend above or below the 200MA. It would have gotten you out of equities at the end of Dec 08 and would have gotten you back in in June of 09 - that is IF this was the only indicator you used...
ReplyDeleteScott, are you saying Aroon 80% of the time right IF signal appears on the right side of the 200MA? That might interesting to test indeed. Thanks for sharing.
ReplyDeleteParker
ReplyDeleteif you look at the Nov 5th "high" on my chart the 144 aroon confirmed bullish while the market pullbacked and the emas DID NOT CROSS.
many people, including myself were short that pullback and for me at least the trade was a hassle and a wash.
If I had followed my 60 minute chart and waited for the 144 aroon to confirm it would have kept me long and I'd be very net positive without the trading hassle.
?
now if I throw in my $NYHLR:$NAHLR (that you liked the other day) things get really interesting as it is showing a top coming very soon...!
ReplyDeleteCarl - correct - it appears useful ONLY in confirming 200MA price crosses.
ReplyDeleteMarshall
ReplyDeleteThanks for the link to Alternate Forecasters
Scott
Really appreciate all your contributions.
again right back at you!
ReplyDeleteGood info Parker! Have you looked at TLT lately? It wasn't included in your recent $Flow updates.
ReplyDeleteMarshall,
ReplyDeleteI liked the suggestion of liquidity inflows as an explanation for why divergences don't always result in a change in trend. So how can we track such inflows, MFI? Also, Chenard's chart appears to be saying we're near "highest reading possible". What is the highest, and how will we know when we get there?
http://www.stocktiming.com/Friday-DailyMarketUpdate.htm
Bill,
This seems consistent with the idea that you have been talking about--intervention. Can we measure and track it so that we don't have to fight the Fed?
speculaterus
ReplyDeleteTLT inverse Money Flow T suggested a bottom on December 8. We've rallied a bit from the low of December 8.
So gold has started to correct, and bonds have started to rally. Now just waiting on the S&P correction.
DOW............
ReplyDeleteIf one looks at the 3 and 8 month cycle turns from high and lows:
4/27 HIGH = 7/27, 12/27
8/27 LOW = 11/27
PositionSizing,
ReplyDeleteI liked your mention of the Arm's Index article that shows the TRIN being at level not seen in half a century:
http://position-sizing.blogspot.com/2010/12/arms-index-at-50-year-extreme.html
Does this mean the market is now more overbought than it has been if 50 years?!
Forward
ReplyDeleteMathematically speaking, I don't know.
It does seem a risky time to initiate a long position though. Especially with the 10MA of the CBOE Equity Put-Call ratio at a multi-month low heading into OPEX next Friday.
I'll do a blog post about this later.
Parker do you think Gold will bounce to challenge the highs before 1336ish?
ReplyDeleteRodd
ReplyDeleteI would be surprised. But I've been wrong before :-)
From www.goldscents.blogspot.com/
ReplyDeleteFriday, December 10, 2010
4 DAY RULE
If the market can end the day with a gain we will get a 4 day rule possible trend change signal.
The four day rule says; After a long intermediate rally look for the first down day to signal an intermediate trend change after the market rallies 4 or more days in a row.
The four day rule is a sign of extreme sentiment. I would caution that it only works after a long intermediate rally lasting multiple months. We have those conditions right now. We have also reached extreme bullish sentiment levels. The kind of levels where we are in jeopardy of running out of buyers.
Add to that the fact that the intermediate cycle is now going on it's 23rd week and we got a large selling on strength day a couple of weeks ago (a sign institutional smart money is exiting in front of a large correction.) and we can probably expect any further gains to be given back and then some when the market moves down into the intermediate degree correction.
Now is not the time to press the long side in either stocks or gold.
That doesn't mean one should short. Shorting bull markets is a tough trade. You have to time the exit perfectly and survive the violent fakeout rallies to make money. Not to mention you will invariably miss time the entry several times. All in all you will probably be better off just going on vacation for the next 5-6 weeks.
joe
http://www.ny.frb.org/markets/tot_operation_schedule.html
ReplyDeletegod almighty - FED is doubling up on POMO in new schedule where we could get as much as 17 billion on some days! yikes!
I am starting to think that if we dont get a rollover in spx by Tuesday that it aint coming until april/may
Trading right now almost seems like betting on an NBA game Tim Donaghy is reffing.
ReplyDelete