Markets 12/13/09 spy and spx

The market has flattened out into a 20 point range on the 10X1 point and figure. These flattened areas were considered by Mr. Wyckoff to be possible turning points. 10 across the 1100 line gives a count of 100 points conservatively, and that can be extended another 9 to the left to the October peak. Despite all the bullish hype, this market has not moved since October.

We closed the week at the midpoint of the range.
The broader the index, the less the progress over the past few months. This tells us the move is concentrated in a few issues, and probably those that can most easily be manipulated with the futures. The trading range on the $NYA extends back to the second week in September. Please notice that this average made a slightly lower low on Wednesday. The range on the rally bars since have contracted and volume has not expanded while we have swung to the center of the 7000-7285 range. The market is weakly pushing up against the 2 heavy distribution days a week ago Thursday and Friday. Quite possibly it is moving to a hinge.
A move down to 111.0 places this market on the hinge. From there we can expect a relatively large move either way,
Although the trade is getting crowded, watch the bonds. A more detailed post will follow later this week, time permitting.

Markets 12/13/09 currencies

The Yen is on the hinge at the red arrow. Given the upthrust, the clearly defined lower top after the upthrust, the way to bet is that the red line is at least tested.
9 across the 150 line gives a target of 150-9=141.
This is 5-6 month distribution range. Conservatively 7 across the 166 line gives a target of 159.

12 across the 165 gives 153. 45 across the 165 line gives 120. I am wagering you will see it.

While I have not put up the Canadian dollar, there is no arguing with the implications of these charts for a dollar rally. We have discussed many times the carry trade and its effect on markets and the dollar. It has now become a media cliche.

Markets 12/08/09

Since we are modern tape readers, we get the option of looking at the entire field. I am beginning with the long bond interest rate because my market sense tells me that something is cooking here and perhaps it is the leader. We certainly have the possibility of a long period of accumulation beginning in August. After making a low in October, the market rallied to a higher high in November and then sold off to 11/17. The market was supported at an old support point, consolidate and had a spring to 42.0. A rally back into the trading range confirmed the strength of the buying and at 42.28 we made a higher low. At 42.56 we were on the hinge and move we did. The retracement so far has been less than 50% and much of that small decline has been recovered by the last 2 x's on the chart.
This is a bearish chart. Last Friday had climactic volume and yesterday was an attempted rally that failed, indicating buyers were exhausted. Today we fell sharply with ease of movement. The line of least resistance for the immediate trend is down.
The market broke sharply and fell directly into a selling climax in the bars around 1. The first few bars up the market rallies smartly and then runs into resistance around 10:30 as buying also weakens with the diminishing volume. The market has a test at 2 and again rallies smartly for the first few bars. Volume diminishes on the decline to 10:20 telling us more rally to follow. On this rally however the volume never recovers and the market has a buying climax at 3. Although buyers are absent on the rally to 4, selling is anemic until the selling climax at 5. The rally to 6 also is weak. So basically the market was supported at its lows and the rallies were very actively sold.
The 1o count flat area at the upper right of the chart is enough distribution to cause a little less than q 10% fall in prices. Mr Wyckoff says these flat areas frequently represent distribution.
Do you see the trading range at the lower right supported at a slightly higher high? This chart currently on a hinge can support a rally.
Hinge treat in IBM
Should we not rally from the danger point we are on the springboard for a large decline.

Markets 12/07/09

A treat.
The bonds hinged last week and then yields exploded. After being supported at the red line for 6 weeks, yields had a spring, rallied 2 boxes back into their previous range, hinged at the red line and then exploded. This was a nice trade for the prepared.

As pointed out yesterday, the price of the SPX, has moved into a nice flat trading range and today has moved into a hinge position again. If the market rises 2 boxes, it will have been supported at a higher low and then made a higher high. If it falls 2 boxes is will have failed at a lower high and then made a lower low. That is why Wyckoff, I believe called this a hinge. The count for a decline is over 100 points at the 1103.2 line. The count for an advance is more complicated and I will discuss it when the time comes.

Remember the key bar here so far is the 13 million volume bar which was a selling climax. It was tested at 2 and then rallied to 3 this morning. At 3 the demand diminished and selling hit at 10:00, The market was supported on a narrow relatively high bar at 10:05 and then rallied weakly. The next sell-off until 12:20 witnessed little supply pressed on the market. The rally to 5 had small volume and many closes in the middle, implying good selling into the rally. The rally to 6 had closes at the bottom. Demand was exhausted at 12:40. The sell-off began and had decent participation. It stopped at a higher low and rallied weakly into the close. Notice how the hinge looks on this chart.
Today could easily be a rally that failed with tremendous possibilities.

Markets 12/06/09

Friday was the second day in a row that the market spiked higher and then sold off. Quite simply it is saying that when the shorts are done covering there is no demand at higher prices. Unfortunately the distribution is not yet complete as the 13 million shares before noon was very good support. Large interests will take advantage of it to sell more at higher prices. Notice how once it became clear demand had dried up, large numbers of shares were pressed on the market. If you thought distribution was just an idea, think again, because you can see it above.

In case you did not get what the market was saying, no demand above and the large interests are selling, it was kind enough to repeat it two days in a row.
Each box is the average true range of the last 20 hourly bars. The chart has flattened out at the pinaccle of a long rally showing that supply is inhibiting further progress. This kind of flattening can be indicative of distribution. On Friday, after making a new high, the market hinged at 1109.9 and sold off making a lower low. We still have not made a lower high that held. Although we can see the count continue to build, currently at 17 across the 1103.9 line for a count of 102, certainly enough to play for, the position without the lower high is neutral.
The current dollar bear market is severely threatened. I found one hinge, can you find others?
In blog land this is being called a bullish chart. Do you agree?

Bedtime.