Friday, June 29, 2012

Tuesday, June 26, 2012

Secret Payoff to China and New Global Money Planned

"IMF should build multiple reserve currencies including SDR and supervise their issuance and cross-border capital flows … Today, the most urgent task for the G20 is reform of the international monetary system. With sharply fluctuating exchange rates, it is difficult to monitor international capital flows, identify financial risks in advance, and save the global system once a crisis happens. If the current international monetary system cannot be successfully reformed, a new great financial crisis will soon be upon us. So, the G20 should focus on its historical mission to urgently reform the international monetary system." China Daily [June 16, 2012]

"Gold is a reserve currency, as far as the market is concerned,” Sprott Asset Management’s Eric Sprott told FinancialSense Newshour’s Jim Puplava in an Oct. 2011 interview. Sprott went on to say that central banks and the shrewd money know the endgame for the dollar will include gold as the backbone of a new global monetary system—a system that presently finds China sorely lagging in gold reserves when compared with the core EU nations and the U.S." ETF Daily News [June 19, 2012 ]

The world’s new monetary system is being constructed as we write. You can spot the evidence in various articles, both mainstream and alternative. This article will profile two such stories.

First, there is an ETF Daily News article entitled, “Rigged Gold Market, A Secret Payoff To China.

It complements a most important article from China Daily entitled, “Reform of the Monetary System.

Together these two recent articles may provide us with significant insights into what is REALLY going on.

A globalist currency may be run by the International Monetary Fund and could be built out of the current Special Drawing Rights (SDR) “super currency” that the IMF has been attempting to implement around the world.

The China Daily article provides us with astonishing confirmation of what may be the IMF’s role. China Daily is widely seen as a private mouthpiece of Chinese government policy.

Reading between the lines, the two articles provide further evidence that China’s top leaders – actually those secretly behind the public’s leaders – are on board with the global money plans.

When one looks at China today, one sees a kind of Western parallel – but one that is even more extreme. The Chinese economic model is based on corrosive and inflationary central banking that has no doubt allowed elite interests to corral huge amounts of Chinese economic and industrial resources.

China is probably near the end of this particular cycle of monetary activity, with hundreds of empty skyscrapers and dozens of empty cities dotting the landscape. The ChiComs no doubt expect an implosion.

No, there will likely be no “soft landing.”  This is providing the ChiComs with a further incentive to cooperate with Western elites to create a new monetary system built out of the old, collapsing one.

The China Daily article “Reform the Monetary System” provides us with an astonishingly detailed plan for how the new world currency is to come about.

Here are some of the points:

  • The IMF should build multiple reserve currencies including SDR and supervise their issuance and cross-border capital flows.
  • The G20 should set up a permanent secretariat within the International Monetary Fund to improve its policymaking and implementation capabilities.
  • A diversified international monetary system should consist of multiple currencies, such as the Special Drawing Rights, the US Dollar, the Euro and the Renminbi.
  • A good way to start the reforms would be to encourage the use of Special Drawing Rights for a broader range of activities and to start reducing the weight of the US Dollar in the reserve currency system.
The article explains that, “such reforms would mean granting the IMF the ability to conduct open market operations as the world’s central bank.”


DJIA Weekly 1972 vs 2012 = 88% Correlation

See also HERE

Delta Cycles in the VIX point to a low in stocks around July 3-6

Charles Nenner on Stocks, Bonds and Gold

Interview of June 25th, 2012

Nenner is looking to start getting long again this week. Focused on cycles and momentum Nenner sees a cyclical low coming in the next few days. He's a buyer anywhere from 1,280 to 1,230 on the S&P 500 but cautions those who are looking for a chance to buy and hold profitably:
"People looking for major moves are going to be disappointed," he says. Timing and trading are key as he thinks stocks are going to be locked into a 5-10% range for an extended period."
Screenshot of 0:32 min - The chart shown during the interview obviously does NOT match Mr. Nenner's outlines in this interview.
Maybe Mr. Nenner should NOT be taken too serious.
Last year he predicted the DJI to plunge to 5,000
 "First people lost their shirts on the stock market then the gold market." says Nenner. "I'm afraid that now they're going to lose a lot of money on their bond positions."
Of course people have been taking the other side of the bond bet for the better part of three decades, only to see yields drop to previously unthinkable lows. You have to squint to see the change but Nenner says yields have already bottomed. Bonds may fluctuate on their way but the trader is taking, building and holding as a "core position" the ProShares UltraShort Lehman 20+ year Treasury ETF (TBT).


Those unfortunate souls who lost their shirts on gold buying it at $1,900 may ultimately get bailed out by the markets but not before getting hung out to dry for a little while longer. In the near term Nenner says the cycle is going lower until the end of August or early September.
Nenner's downside target for gold is $1375 to $1325 but he's a buyer in size there; his long-term target remains $2,500.

Monday, June 25, 2012

STD Yellow Week (June 25-29)

This coming week will be a Short-Term-Delta Yellow Week with a yellow Monday and a yellow Friday. Last Friday, June 23rd, the SPX closed near the day's high and we expect the STD-pattern to continue without inversion. Then this week should be tracing out some sort of a choppy W-shape. And according to the STD-Theory Monday-Tuesday should repeat last Thursday-Friday:
DOWN from a Monday (June 25) morning HIGH (high of the week) into the close of Tuesday June 26 (low of the week).    
This pattern makes sense even more since last Friday was a NR7-day (see HERE). However, other cycle projections suggest that the week's pattern would be as follows (see HERE + HERE + Mike Korell's ChartEdge-forecast below):
chopping up into the week's HIGH on Tuesday June 26, from there hard down into the low of the week on Wednesday June 27, a turn day
The Weekly Pivot-Point and Support-Resistance-Levels for the E-mini S&P 500 September are: 
R3 1,352.75
R2 1,344.25
R1 1,340.50
PP 1,335.75
S1 1,332.00
S2 1,327.25
S3 1,318.75
S4 1,310.25
STD Blue- and STD Yellow-days and -weeks are choppy and reportedly hard to trade, and some ST- traders recommend to go fishing instead. This notion is supported by the forthcoming Astro-Events suggesting potential CITs for almost every day:
2012-06-23-26 (Sat-Tue) = Tidal CIT
2012-06-25 01:42 (Mon) = SAT (D) = Merriman Level 1 - Turnday
2012-06-25 02:25 (Mon) = JUP 90° NEP = Merriman Level 1 - Turnday
2012-06-27 00:00 (Wed) = MAR 90° Galactic Center
2012-06-27 10:05 (Wed) = VEN (D) = Level 1 = Merriman Level 1 - Turnday
2012-06-28-29 (Thu-Fri) = Tidal CITs
2012-06-29 00:00 (Fri) = AI-CIT - Value = 7
2012-06-29 09:44 (Fri) = SUN 180° PLU = Merriman Level 3 - Turnday
2012-06-29 15:00 (Fri) = SUN 90° URA  = Merriman Level 1 - Turnday

Tony Caldaro's Weekend Update (June 23, 2012) 
The recent rally from SPX 1267 to 1363 started off impulsively as it was unfolding. We were expecting the rally to reach either the 1363 or 1372 pivots in a five wave sequence ahead of the FOMC meeting. The pattern, unfortunately, looked like three waves on tuesday as the FOMC began. After tuesday’s high, and wednesday’s volatility, the market sold off on thursday to SPX 1324. This selloff overlapped the first rally from SPX 1267 to 1329/36. This made the entire June rally look corrective. As a result we have labeled the SPX 1267 low as a wave A, and the recent rally as a wave B. The most probable scenario suggests a wave C is underway to either retest the June lows or make a lower low in early July.

Dan Eric's Elliott Wave Update (22 June 2012) 
It would be ideal for the wave structure if Monday made a quick lower low beneath Thursday's low prior to any retrace into 1346 - the bottom of wave i. This would complete a small 5 wave pattern down from the recent rally high peak of 1363.46.

Saturday, June 23, 2012

SLTD Roadmap - Big Delta Picture

Quite a few fundamental and technical odds seem to be against the following SLTD projection, and E-wavers predict the third-of-the-third-wave anew these days. However, the 40 Year Cycle worked well so far and suggests a rally with a higher HIGH in late August before declining into May 2014.   
2012-06-26 (Tue) = High
2012-06-27 (Wed) = Low
2012-07-03 (Tue) = High
2012-07-04 (Wed) = Low
2012-07-30 (Mon) = High
2012-08-08 (Wed) = Low
2012-08-29 (Wed) = High


# 10 in this chart = # 16 in the chart below

SPX vs Delta - VIX - Tides - Astro-Indicators - EW

2012-06-26 (Tue) = High
2012-06-27 (Wed) = Low
2012-07-03 (Tue) = High
2012-07-04 (Wed) = Low
2012-07-30 (Mon) = High
2012-08-08 (Wed) = Low
2012-08-29 (Wed) = High

The Option Strategist Weekly Updater 6/22/12  
The stock market had just about everything going for it in technical terms this week, but then the fundamentalists delivered a nasty blow today (Thursday, June 21st). Technically $SPX is just below the support level of 1330-1340.
Equity-only put-call ratios remain on buy signals, despite Thursday's large decline.
Market breadth was very poor on Thursday. As a result, both breadth oscillators registered sell signals.
Volatility indices ($VIX and $VXO) were the last indicators to turn positive earlier this week. That occurred when $VIX fell below 21 on Monday and then proceeded to drop to 17 by mid-week. As we have been saying for some time, $VIX above 21 is bearish for stocks, while $VIX below 21 is bullish.
In summary, the technical indicators remain bullish, except for breadth. We are going to give the upside the benefit of the doubt. But if $SPX should decline further, or if $VIX should close above 21, or if the put-call ratios should roll over, then we would have to relinquish our currently bullish stance. 

Tony Caldaro's Weekend Ppdate (June 23, 2012) 
The recent rally from SPX 1267 to 1363 started off impulsively as it was unfolding. We were expecting the rally to reach either the 1363 or 1372 pivots in a five wave sequence ahead of the FOMC meeting. The pattern, unfortunately, looked like three waves on tuesday as the FOMC began. After tuesday’s high, and wednesday’s volatility, the market sold off on thursday to SPX 1324. This selloff overlapped the first rally from SPX 1267 to 1329/36. This made the entire June rally look corrective. As a result we have labeled the SPX 1267 low as a wave A, and the recent rally as a wave B. The most probable scenario suggests a wave C is underway to either retest the June lows or make a lower low in early July.

Elliott Wave Update ~ 22 June 2012 would be ideal for the wave structure if Monday made a quick lower low beneath Thursday's low prior to any retrace into 1346 - the bottom of wave i. This would complete a small 5 wave pattern down from the recent rally high peak of 1363.46.

The Number 40 in the Quran

It takes 40 days for the embryo to become matured and ready for Allah’s Spirit to be breathed into it and to become a fetus, a new individual worthy of all human rights. Therefore, abortion is only allowed prior to 40 days in case of rape etc. Then Allah gives the fetus hearing, seeing and brain power, in this sequence as per Quran 32:7 – 9:

.7  ٱلَّذِىٓ أَحْسَنَ كُلَّ شَىْءٍ خَلَقَهُۥ ۖ وَبَدَأَ خَلْقَ ٱلْإِنسَٰنِ مِن طِينٍۢ
He is the One who perfected everything He created, and started the creation of the human from clay.
.8  ثمَّ جَعَلَ نَسْلَهُۥ مِن سُلَٰلَةٍۢ مِّن مَّآءٍۢ مَّهِينٍۢ
Then He continued his reproduction through a certain lowly liquid.
.9 ثُمَّ سَوَّىٰهُ وَنَفَخَ فِيهِ مِن رُّوحِهِۦ ۖ وَجَعَلَ لَكُمُ ٱلسَّمْعَ وَٱلْأَبْصَٰرَ وَٱلْأَفْـِٔدَةَ ۚ قَلِيلًۭا مَّا تَشْكُرُونَ
He shaped him and blew into him from His spirit. And He gave you the hearing, the eyesight, and the lungs; rarely are you thankful. 
Note the sequence hearing, then eyesight, then lungs
It takes 40 weeks for the fetus to mature into a ready-for-birth baby,
40 × 7 = 280 days ≈ 9 lunar months 14 days ≈ 9 solar months 5 days.

It takes 40 lunar months for the baby’s long term memory to become ready for the stage of knowledge accumulation. This is only a speculation and needs a proper verification by specialists in the field to be considered correct.

It takes 40 lunar years for the human to have reached thinking maturity, wisdom, as per Quran 46:15:

أعوذ بالله من الشيطٰن الرجيم بِسْمِ ٱللَّهِ ٱلرَّحْمَٰنِ ٱلرَّحِيم
وَوَصَّيْنَا ٱلْإِنسَٰنَ بِوَٰلِدَيْهِ إِحْسَٰنًا ۖ حَمَلَتْهُ أُمُّهُۥ كُرْهًۭا وَوَضَعَتْهُ كُرْهًۭا ۖ وَحَمْلُهُۥ وَفِصَٰلُهُۥ ثَلَٰثُونَ شَهْرًا ۚ حَتَّىٰٓ إِذَا بَلَغَ أَشُدَّهُۥ وَبَلَغَ أَرْبَعِينَ سَنَةًۭ قَالَ رَبِّ أَوْزِعْنِىٓ أَنْ أَشْكُرَ نِعْمَتَكَ ٱلَّتِىٓ أَنْعَمْتَ عَلَىَّ وَعَلَىٰ وَٰلِدَىَّ وَأَنْ أَعْمَلَ صَٰلِحًۭا تَرْضَىٰهُ وَأَصْلِحْ لِى فِى ذُرِّيَّتِىٓ ۖ إِنِّى تُبْتُ إِلَيْكَ وَإِنِّى مِنَ ٱلْمُسْلِمِينَ
We enjoined the human being to honor his parents. His mother bore him arduously, gave birth to him arduously, and carrying him (in the womb) and breastfeeding him for thirty months. Until he reaches maturity, and reaches age of forty (lunar years of hardship), he says, "My Lord, direct me to thank you for all the blessings You have bestowed upon me and upon my parents, and to do all the righteous deeds that please You, and direct my children (bloodline) to be righteous too. I have repented to You. I am a true submitter."

Tony Caldaro on the FED's Liquidity Programs & the Stock Market

Fundamentally, the markets have been in a FED driven liquidity cycle since late 2008. When the Treasury Department started the $800 bln TARP program in October 2008, the FED initated QE1 at $200 bln. Clearly neither were enough to offset the deflationary pressures as the market made new lows into March 2009. Then on March 10th 2009 the FED expanded the QE1 program to $1.4 tln until June 2010. The stock market soared, rallying from a Mar09 low of SPX 667 to SPX 1220 by Apr10. Anticipating the end of QE1 the stock market began to correct. When the FED failed to extend QE1, or introduce a new program at their June meeting, the market made lower lows into July. From that low at SPX 1011 another rally began. 

Then on August 27th the FED introduced QE2 at $600 bln until June 2011. The market soared again, hitting SPX 1371 by May 2011. And again, it began to correct in anticipation of QE2 ending. When the FED failed to introduce another liquidity program, and troubles in Europe widened, the correction steepened. While the stock market was going through this 22% correction the FED introduced a $400 bln Operation Twist on September 21st until June 2012. The market was disappointed and continued lower. In October 2011 the EU introduced a $1 tln EFSF program, similar to TARP. The market then bottomed at SPX 1075 and started to rally. The ECB then introducted LTRO 2 in December and the market   continued to rally. In March 2012, anticipating the end of Op Twist in June, the market hit SPX 1422 and began to correct. This month the market hit a low of SPX 1267, then rallied for two weeks ahead of last week’s FOMC meeting. After the meeting the FED expanded Op Twist from $400 to $667 bln until December 2012. The stock market quickly sold off the following day. This is a summary of the liquidity cycle and its effects on the stock market over the past four years.

If one examines the liquidity programs and their results they will discover a pattern. We are fairly certain the FED has as well. When the FED expanded QE1 to $1.4 tln the market closed that day at SPX 720. Before the program ended the SPX hit 1220, for a gain of 69%. When the FED introduced QE2 at $600 bln the market closed that day at SPX 1065. Before that program ended the SPX hit 1371, for a gain of 29%. Then when the FED introduced Op Twist for $400 bln the market closed that day at SPX 1167. The market was initially disappointed as it made a lower low. However before the program was recently expanded the SPX had hit 1422, for a gain of 22%. When the FED expanded the program this week by an odd $267 bln we figured they too had discovered the pattern.

For every $20 bln the FED purchases in long term debt the stock market rises 1%
  • QE1 was $1.4 tln: expected rise 70%, actual rise 69%. 
  • QE2 was $600 bln: expected rise 30%, actual rise 29%. 
  • Op Twist was $400 bln: expected rise 20%, actual rise 22%. 
  • Op Twist expanded to $667 bln: expected overall rise 33%, actual rise yet to be determined. 

In summary, when the FED introduced Op Twist for $400 bln they were expecting the market to rise 20%. Despite the decline after the introduction at SPX 1167, the market rose 22% to SPX 1422. 

Now, with the expansion of the program to $667 bln they are likely expecting an overall rise of 33.3% from the time the program was first introduced. Or, a rise of 13.3 % from the time it was extended. A 33.3% rise from SPX 1167 equals SPX 1556. A 13.3% rise from SPX 1356 equals SPX 1536. The all time high for the SPX is 1576. Mission almost accomplished!

Peter Eliades: 360.4 CD Cycle = June 25 CIT ?

Stockmarket Cycles Special Report for Friday, June 22, 2012

This report is being written just before the potential resolution of a cycle or turning point pattern that has been very consistent for almost 30 years. As so often happens, we stumbled upon the pattern over the past week and we were amazed at the consistency and accuracy of many of the prior resolutions of the pattern. Because the pattern has been so consistent, we wanted to show it to you in as much detail as we could so we put together nine different charts that range from as early as 1973 right up to the next potential resolution whichis due on or within a few days of next Monday, June 25.

Cycles have become far easier to uncover nowadays as opposed to the detailed visual analysis that was required just a decade or two ago. Computer tools allow us to quickly span time periods with varying cycle and turning point periodicities. Almost all the work that we do on daily charts translates cycles into trading day cycles as opposed to calendar day cycles. We have classified the cycle we are about to present to you in graphic detail as a 249 trading day period. Depending on how far back in time a pattern maintains its consistency, we also like to classify the same periodicity on the basis of calendar days. In the current case, the calendar day periodicity turns out to be 360.4 calendar days. Here is how we handled the charts we are about to show you. Each chart shows four resolutions of the pattern. At the bottom of each vertical line which represents the resolution of each individual period, we have entered a date. There is a slightly arbitrary nature to these dates because we looked at the ideal resolutions of both the trading day and the calendar day periods and then examined our charts to see which date within a few days best represents the resolution of the pattern in a topping or bottoming formation. So that you may have a record of the idealized resolutions of this pattern, we will list the idealized resolution for each calendar day period. If you are interested in doing your own research or comparison of the idealized dates with the actual dates of tops or bottoms, you can compare the dates we are about to present you with the actual resolution dates that are presented on the charts to follow. Here is a list of the idealized dates of resolution of the 360.4 calendar day periodicity:

 January 5, 1973 September 30, 1992 June 30, 2011
 December 31, 1973 September 25, 1993 June 25, 2012
 December 26, 1974 September 20, 1994
 December 22, 1975 September 16, 1995
 December 16, 1976 September 10, 1996 Future Dates
 December 12, 1977 September 6, 1997
 December 7, 1978 September 1, 1998 June 20, 2013
 December 2, 1979 August 27, 1999 June 15, 2014
 November 27, 1980 August 22, 2000 June 11, 2015
 November 22, 1981 August 17, 2001 June 5, 2016
 November 18, 1982 August 13, 2002 June 1, 2017
 November 13, 1983 August 8, 2003 May 27, 2018
 November 7, 1984 August 2, 2004 May 22, 2019
 November 3, 1985 July 29, 2005 May 17, 2020
 October 29, 1986 July 24, 2006 May 12, 2021
 October 25, 1987 July 20, 2007 May 8, 2022
 October 19, 1988 July 14, 2008 May 3, 2023
 October 14, 1989 July 9, 2009 April 27, 2024
 October 5, 1991 July 5, 2010 April 23, 2025

We have gone into this detail because we believe it is remarkable how many times the previous resolutions led to turning points of some importance. The charts above will give you a graphic idea what we mean. Originally, we were going to leave out several sequences whose resolutions did not appear as consistent as others. As it turned out, the only years as we left out of the charts between 1973 and the present were 1976 and 1977. We think you'll be impressed at the consistency of the resolutions of this pattern.

Since 1973, there have been an average of 252-253 trading days per calendar year. That means that the 249 trading day pattern falls just 3-4 days short of an exact one year pattern. The first three charts covering most of the time span between the resolutions of January 1973 and October 1990 are line charts representing the daily closing price of the S&P 500. The remaining charts are intraday bar charts which show the full range between highs and lows each day. Some of the turning points marked only relatively short-term market turns but a surprising number of them marked very important market turns. For example, the very first resolution in the charts occurred in early January 1973. The high registered at that turn was not approached again until seven years later on the S&P and over a decade later on the DJIA. In like fashion, the low registered in December 1974 has never again been approached on the Dow or the S&P. If we look at the recent resolutions, the idealized resolution that was due on July 14, 2008 actually occurred only one day later on July 15, 2008. That resolution led to an immediate rally of 9.4% from the low on that date to the high one month later, but the July 15 low lasted for only two months before it was broken. The next idealized resolution was due on July 9, 2009. Although an important low had already been registered in March 2009, a decline of almost exactly 10% from high to low was registered going into the scheduled resolution of the pattern on July 9, 2009. An important low was established at that time at a level which has never since been returned to. The next resolution was due ideally on July 5, 2010. An exact closing low occurred on July 2, one trading day before that idealized date. The decline which ended on that date began on April 26, 2010, and saw the S&P lose over 17% of its value from high to low. Once again, however, the low seen at that July 2, 2010 resolution has never since been approached. The next idealized resolution was due on June 30, 2011. On July 7, four trading days later, the S&P reached a high which led to an immediate decline of 23.1% over the next month and did not reach a more important bottom until October 4, 2011, over 26% below the high established in early July.

That takes us to the next scheduled resolution which, on an idealized basis, is due on June 25, 2012. But here is where things could get tricky. On June 19, just four trading days before the expected resolution date, the S&P 500 reached a secondary top which had retraced an almost exact Fibonacci 0.618 of the April 2 to June 4 decline which preceded it. Depending on other factors, that June 19 high could fit the qualifications as another turning point on the pattern we have been discussing. On the other hand, the very sharp one-day decline that occurred on Thursday, June 21, could be setting up a bottom of some importance closer to the idealized June 25 resolution date.

There is no ideal way to resolve the question of whether this expected resolution of the pattern will be a top or a bottom. Because the time window extends into next week, we will probably have to wait until the week ending July 6 to confirm whether the resolution turns out to be a top or bottom based on whether the high within a week of June 25 is surpassed or whether the low within a week of that date is surpassed. We can, however, use our cycle projections as guidelines. If we start with the longest projection spans, the nominal four-year projections, it is clear that there are upside projections that have been outstanding since late 2010 that have not yet been achieved. Those projections will remain outstanding until they are met or invalidated. The current projection configurations would need to see the Dow move below 10,000 and the S&P 500 move below 1050 over the next 2-3 months in order to invalidate those upside projections. For those of you who have not seen or who have forgotten what levels those projections call for, the Dow projection calls for a nominal four-year cycle high between 14,043-15,745. The S&P 500 projection calls for a nominal four-year cycle high between 1500.15-1736.56. Those projections continue to suggest that we have yet to see an important market top.

The next longer nominal projections are the nominal 78-80 week projections. Unfortunately, they are not presenting a clear picture. Look at the current nominal 78-80 week projection chart for the S&P 500.

The S&P chart shows that prices broke above the offset lines early this year around the 1342 level, giving an upside projection around 1610. Achieving that projection level would take the S&P to new all-time highs so this obviously qualifies as a potentially very bullish projection. Now, however, look at the same projection chart for the New York Composite Index.

Notice some of the distinct differences in this chart. First of all, on a simple technical basis the New York Composite Index failed to confirm the move by the S&P 500 above the April-May 2011 highs. But more importantly, there is no analogous clean break above the projection offset lines such as the break above seen on the S&P chart. The most recent decline in the market saw the New York index move down alongside the offset lines and has just started to move up over the past 2-3 weeks.

Because the New York Composite Index has established a reputation over the past few decades as being the most consistently accurate projection generator, it's failure to behave in the same fashion as the S&P 500 gives us less confidence in the analogous S&P 500 projection.

The next chart is an intraday chart of the S&P 500 e-mini futures. We have labeled some technical areas we believe may turn out to be important. This chart covers the market action over almost the past two months. It is an 81-minute bar chart. The reason we use the apparently arbitrary time period of 81 minutes is that there are 405 trading minutes in a daytime trading session of the futures, so five bars of an 81-minute chart covers the complete daytime trading session. The blue line on the chart is the equivalent of a 10 day moving average consisting of 50 81-minute bars. The green line near the bottom of the chart is a 1000-period moving average which is the equivalent of a 200 day moving average on a daily chart. The chart gives an appearance of an inverted head and shoulders formation. The inverted head would be the low seen on June 4 with the left shoulder above the May 18 label and the right shoulder above the June 11 and June 13 label. Drawing the neckline of the inverted formation is a judgment call. We used the highs in late May and drew the neckline through the highs in early to mid June, but we ignored the spike high of 1330.00 that was registered on June 11. Notice how the latest decline stopped almost exactly on that neckline. That would be the technical expectation if this turns out to be a bullish formation. A convincing break below that neckline would have more bearish implications, at least for the short term. We have also drawn in an arbitrary channel which, as yet, has no real validity. It is simply based on constructing a line that begins at the low of June 4 and is parallel to the tops line between the June 7 and June 19 highs. The chart gives you some guidelines to watch for early next week. If the S&P futures remain above both the lower parallel line and the neckline described above, and especially if they move convincingly back above the 10 day moving average line, a more bullish short-term resolution can be expected. If, on the other hand, the potential support lines noted above are broken, expect a more bearish short-term resolution.

Several times over the past year we have discussed Terry Laundry's T-Theory in association with the advance-decline line of the New York Stock Exchange. In our newsletter of March 2011 we gave our interpretation of that theory as applied to the long-range daily chart of the New York Stock Exchange daily advance decline line and we came up with three alternative resolutions for a final important high on that indicator. The last date for a potentially major high was given as October 22, 2012. Inasmuch as that indicator reached new all-time highs as recently as May 1 of this year, that eliminates the alternative dates that were given last year for a potential top and leaves only the October 22, 2012 date. The implications, of course, from that conclusion are that the market will continue to act favorably into that time zone. In fact, even if the analysis is correct and a major top is reached on the advance decline line around late October of this year, that still leaves open the possibility that the popular market indexes could reached new highs after the top in the advance decline line. In fact, as we have noted so often, it would be very unusual not to see one or two of the major market indexes make new highs after the ultimate high registered on the advance decline line. For that reason, until we see more concrete evidence that an important top has been formed, we must allow for the possibility, and even the probability, that new highs are in store for the stock market. We will be watching closely over the next several weeks for any evidence that that prognosis could prove to be wrong.

Wednesday, June 20, 2012

S&P 500 vs Election Year Seasonal Chart

SPX vs 354 CD Cycle = June 22-25 High

The S&P 500 is in line with the 354 CD Cycle, and a major HIGH is due around June 22-25. 

Also looking back one and four lunar months, especially on the last STD Green Week (see here: May 21-25, 2012), a choppy sideways-action is expected for this STD Wednesday and Thursday.

Sunday, June 17, 2012

STD Green Week (June 18-22)

Last week was a perfect Short Term Delta Red Week in an up bias.

This week is a STD Green Week, because Monday, June 18th will be a STD Green Day (see HERE).  

STD Green Days 66% of the time look like N's (or inverted N's). Look for a top around 11:00 and a down move into 13:00. So one might sell/buy a confirmed intraday top/low around 11:00 - 11:30. Not sure if afternoon green 15:00 CITs are as or more a reliable buy/sell but watch out to be out before 15:00 for the closing up- or down-leg of the "N".

Green Weeks are usually almost the same as Red Weeks = directional. However, Green Weeks often have CITs on early Tuesdays and on Thursdays. If Tuesday is biased up, then the odds increase for Wednesday and Thursday to be up as well. Tuesday to Thursday usually will reverse Monday's net move. 

New Moons oftentimes mark CITs, and Tuesday, June 19th, could be either the High or the Low of next week. The same day will be marked by the Moon's declination reaching max north, and a Berg Astro-Indicator CIT.

And last not least, a Green Friday should look like the Green Monday.

Saturday, June 16, 2012

Tom McClellan: Bulls in Charge

As of June 15, 2012, the NYSE's McClellan A-D Oscillator has risen up to an overbought level.  But not all overbought conditions are created equal.  There is context to be found in the way that it is done.

There is a rule that we use when interpreting the Oscillator's structure: The complex side is the strong side.  What I am referring to is a complex structure that is entirely above or below zero, with lots of chopping up and down but without a crossing of the zero line.  When you see that, the message is that whichever side of zero it is forming on is the side that is in control.  So a choppy complex structure above zero means that the bulls are in charge, whereas a complex structure below zero means that the bears are in charge.

Friday, June 15, 2012

Imago Dei - Capax Dei

God as Architect, Builder, Geometer, Craftsman
From the Frontispiece of Bible Moralisse, dated 13th century
[Codex Vindobonensis 2554, French, ca. 1250, in the
Österreichische Nationalbibliothek]

Science, and particularly geometry and astronomy / astrology,
was linked directly to the divine for most medieval scholars.
The compass in this 13th century manuscript is a symbol of God's
act of Creation. God has created the universe after geometric
and harmonic principles, to seek these principles was therefore
to seek and worship God.

 "... Great Creator of the World! 
I look with adoration on the work of your hands, shaped in accordance with five artistic forms, and in the middle the Sun! 
Spreader of light and life, who constrains the planets according to holy laws 
and guides them in different orbits. 
I see the labors of the moon, and there, above, the stars spread out over an
immeasurable field - father of the World, what moved you to lift up a poor, small, weak creature of the earth so high? 
So high that he stands in the radiance of a wide-ruling King, almost a God: 
for he is able, following you, to rethink your thoughts. 
Ruler of the world! Eternal power! 
Your infinite radiance spreads through the universe on bright wings of light!"

Johannes Kepler

[quoted in "The Astronomer Johannes Kepler", Rosemarie and Rolf Schauerhammer, 
published in New Solidarity Newspaper [precursor to New Federalist], March 23, 1984]

Reasons behind OANDA's Sunday trading halt

OANDA will halt trading this Sunday, June 17, from 6:00 AM EDT until approximately 3:00 PM EDT. I would like to further explain OANDA’s reasoning for this action.

First off, OANDA is the only forex provider that permits off-market, weekend trading. In truth, volumes during the weekend are much lower than typical trading days, but OANDA has made this available as a service for its clients rather than an opportunity to increase corporate revenues.

The decision to halt trading is very much tied to the uncertainty in Europe and in particular, the Greek election. Given these events, there is the potential for extreme exchange rate volatility at a time when global currency markets are closed. OANDA’s concern is that exchange rates could undergo significant fluctuations as the exit polls are being made public. If these fluctuations are wide enough, accounts that under normal conditions would be considered well-capitalized, could become subject to a margin call.

By halting trading and holding the closing prices steady during this period, we aim to shelter traders from the potential for price spikes. Of course, once trading resumes, new market rates will come into effect and while the hope is that prices will have settled by this time, some accounts may still face the risk of a margin call.

This is why we have issued a warning recommending that traders reduce positions if they determine they are vulnerable from a margin perspective. At the very least, all traders should review their accounts prior to the weekend and ensure they have sufficient capital to prevent a margin call when trading resumes at the new market price.

On a final note, anyone with open positions during this time, regardless of their choice of forex broker, is at risk when exchange rates reset upon the resumption of trading. Yes, sending out this message is to inform our traders of the trading halt, but it is first and foremost intended to inform the investing community of the potential volatility in the coming days and to provide sufficient time to make any necessary adjustments.