Here's an overview of where we are.
Dollar/Euro
On the daily chart, the Dollar shows a bottom in the early February time period:
Likewise, the Euro daily MFT shows an early February top:
From the relationships these currencies have recently demonstrated with stocks and gold, we can draw the general conclusion that equities and commodities (which we will examine specifically later) should generally perform well through the end of January and into early February.
However, the fifteen minute Dollar chart shows it's weakness that began last week should be over, while the hourly Dollar chart shows a top coming on December ~20.
The only conclusion I can draw from this is that weakness in equities and commodities should develop soon and end sometime around December ~20.
Equities
Turning specifically to the S&P, the daily Money Flow T shows an end to the move that started in July as of December 8:
More specifically, the 30 minute SPY Money Flow T showed a top as of the open today:
In addition, the Volatility Money Flow T shows a bottom in December 8, and another bottom in early February which confirms the currency Money Flow Ts:
Finally, JNK acting as a surrogate for FAGIX and the S&P also shows a late January top:
The only conclusion I can draw from the equity Money Flow Ts in conjunction with the currency Money Flow Ts is that December 7-8 is a top date for equities, with the correction expected to last until December ~20, at which point we will see a rally into late January/early February. I would add that the ARMS Index remains historically overbought.
Gold
Which brings us to the Gold daily Money Flow T, which shows successive tops on December 7, early February and late May:
The Gold Money Flow T is consistent with the currency and equity Money Flow Ts, at least with respect to the December 2010 and early February 2011 top dates.
It's interesting that a final top for gold is projected in late May 2011 (which would be seasonally correct for Gold). Martin Armstrong's 8.6 year cycle low in economic confidence is early June 2011. Given the QE2 schedule, I believe that Armstrong's cycle will coincide with a low in confidence in the US Dollar, meaning Gold should peak in May 2011. This also correlates well with the Aden Sisters' 8 and 11 year cycles in Gold, which suggest an important top in Gold during the 2011-12 time frame based on the 2000-2001 low in Gold.
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Posts
Very helpful.
ReplyDeletethanks Parker!
Does anyone understand how Terry L. constructed the new possible T about which he posted the update today? I mean what rules did he apply? What is the beginning date of the T and why was it chosen?
ReplyDeletejoe
Parker is the MFT for Gold on dec 10:th still valid?
ReplyDeleteRodd
ReplyDeleteThat was an intraday MFT refinement of the daily gold Money Flow T. Intrday Money Flow Ts can sometimes help pinpoint turns, but they can sometimes be way off.
Can it happen? Sure. But the dollar will need to go lose ground, and I am expecting the dollar to gain ground through December 20.
Parker, thanks for the update today and very much appreciated. This is a much better construction than the one Terry gave today - and I am sorry to say that I am completely lost as to what Terry is on about with the new T in his latest commentary.
ReplyDeleteI presume you are still in the short entered yesterday?
Thanks Parker. Who are the Alden sisters?
ReplyDeleteLove it....teacher vs. student
ReplyDelete(terry vs. parker)
can't wait to see it play out!!
CSW
ReplyDeleteI was stopped out this morning.
Boris
Sorry. I mean Aden Sisters. See:
http://www.gold-eagle.com/research/adenndx.html
http://position-sizing.blogspot.com/2010/04/gld-8-and-11-year-cycles-in-gold.html
rjo
Don't make this into me vs. Terry.
Parker - my analysis is almost close to yours with only difference is between feb-mar top to may spx (equities) may just float up or make double top.
ReplyDeleteAlso after may top of gold there will be sharp correciton something like 20-30% but then it should go up again as its still bull for gold till 2020. I think even Terry and you agree on that part. of ocurse holding espcially miners gdx is not at all good idea in that correctin as they may retrace even more than gold and.or retrace all gains.
for gold I have found Toby as most good blog. It is similar to Aden sisters ABCD waves of gold. Toby's partner has seperate blog called TSI trader blog. On that there is picture of all ABCD waves since 2000. A is first up after big correciton similar to 1. B is similar to 2. C is longest stongest similar to 3. But then there is directly D that is big correction. D most times retraces 62% of entire ABC or at least 62% of C. Current A started at 2008 low... from there C will end sometime next year around 1600 may be and then D will come down which I feel will co-inside with 1 down in spx equities of new bear or second dip as some call. so may be second half of next year all come down together.
ReplyDeleteHuh? It's not meant as a dig at anyone. Your work calls for more weakness while ttheory is calling for no drop. Nothing wrong with opposing views I find both your work great! As I said I just think it's fun to watch.
ReplyDeleteParker,
ReplyDeleteTerry's update today included A new Money Flow T that I felt was not properly drawn at least not per your rules. It could be that i do not understand all the rules. What did you make of his update and new T.
I think Terry was guessing 1170 was the price low and that this will ultimately lead to another money flow t based on the strong mfi increase
ReplyDeleteJeff
ReplyDeleteI don't see how Terry could have been drawing a Money Flow T there.
Looks like he decided that the Volume Oscillator or AD Oscillator (not shown on the chart he put up today) marked the left side of the T (back in June or July), with a center post at the late November low.
Then again, I was a bit confused because that T would project a late Spring top, and he was talking about January 22.
I'll have to go back and listen closer as to how he came to January 22.
Certainly, January 22 is close to my late January/early February top. And late Spring is close to the Gold Money Flow T top which, if powered by dollar weakness, could mean stocks top in late Spring too.
So I don't have much disagreement with what he is saying. I just have a couple of questions as to how he got there.
Not trying to talk politics, but for those of you who are interested in seeing Ron Paul as chairman of the Monetary Policy subcommittee, please go to Mish's site and click on the link to send the House Speaker John Boehner an email. If you believe it's the right thing, please take 5 minutes and voice your thoughts. Thank You!
ReplyDeletehttp://globaleconomicanalysis.blogspot.com/2010/12/dr-mr-speaker.html
Parker,
ReplyDeleteI haven't heard you mention the $NYAD:$CPC indicator lately. I appears to me we have a T that formed starting July 23, with a center post of Nov 22, giving a peak March 21, 2011. There is also a shorter T that ends on Dec 9 with the same Nov 22 center post. Are you giving greater weight to the MF T's now? It seems the MF T doesn't tell you you're in a T until the rally is half over.
rfsignals
ReplyDeleteI haven't mentioned it because it has not made any divergences recently. I look at it every day.
Yes - we may have a Parker Indicator T starting in late July.
However, I don't see a logical center post yet. If we get a selling climax soon, it could well set up a center post that would produce a top in May.
As an aside, I have studied several strong individual stocks with high momentum, and I am seeing a lot of Money Flow Ts that end in May/June in those stocks.
As for Money Flow Ts, yes you are correct that you don't know you have one until the second half of the T.
Then again, with regular Ts, you don't know you have one until you can identify the center post, so it's the same issue.
Parker,
ReplyDeleteDo you have a projection, how low SPX will go by Dec20?
bud
ReplyDeleteOriginally, I was expecting it to reach the bottom of the envelope per Terry's nulled echo low theory.
Now, I am not certain how deep of a correction we'll get, assuming we get one.
Hi Parker,
ReplyDeletegreat blog... one thing I noticed..
copper broke to new highs... no divergence seen with prior declines in spx
http://stockcharts.com/h-sc/ui?s=$COPPER&p=D&yr=1&mn=0&dy=0&id=p11344294492&a=211077873&listNum=1
A sell off into Dec 20/21 with a 1130 - 1150 price low could set up a nice price/indicator divergence that would project a T starting in July 2010 out to late May/June 2011. I am always amazed how quickly a market can adjust itself, similar to an earthquake effect which although initially violent and scary results in a more stable environment (until the next stress buildup) many thanks to Parker and others for your sincere insights and thoughts.
ReplyDeleteRe: Terry's new T
ReplyDeleteJune 14 is the prior high in his volume oscillator;
July 23 is the prior high in his advance/decline indicator
Sort of looks like his new T begins with the volume oscillator high
Parker, we are long time Terry L followers, so that is how you came to our attention. That was a terrific call you made on Gold. I had no prior Money Flow experience. It really seems that you are on to something good. Predictive Indicators are very suspect, but you seem to be doing some nice work. We will be following you with more interest. Again, great call on Gold. Thank you very much. Bob Buckley
ReplyDeleteThanks Bob. Welcome to the blog. Love to hear your thoughts as we go along.
ReplyDeleteI have a slew of turn dates this week. Equities down, gold down, bonds up, volatility up. Only gold has made a decisive turn so far.
We'll see what tomorrow brings.
Parker,
ReplyDeleteWould you mind adding your TLT chart? This chart seems to be missing from the package.
Parker - I tried to replicate the MFI calculation in Excel - with success. I replicated your Gold MFI projections. I don't see where the Feb high comes in - although I do see a 5/24/11 (calendar days) and 5/25/11 (trading days) projected high. The Feb high uses a weak starting point, I think - since the left side was not a HARD price/mfi low. Any thoughts?
ReplyDelete