Due to a change in my work responsibilities, I have not been able to watch the markets as much or to blog. Anyway, like Mr Wyckoff who had a similar situation, I have to rely more on the point and figure chart and I have tossed out a bunch from the 100 I follow.When last discussed I said I believed that the long trading range was distribution. I still believe that because the advance from 12/18 on was struggling with little ease of movement compared to previous advances is this very great bull market. If this had been months of absorption one would expect that on breaking into new high ground it would have been like a dam bursting and the market would have shot higher and not struggled to eek out less than 3%. We have now flattened out into another trading range with a count of 8 across the 1147.8 line which would if realized bring us back to the point of breakout.
I ended up tossing in a few banks. In no small part it is because they are in the news so much. In the midst of this great year, Wells Fargo has not moved since August. It looks like distribution and with a count of 16 on the 29 line I am projecting a halving of its price.
I was enormously bearish the long Bond but have change my position to neutral. The Short bond trade was getting crowded, as opposed to when we first put it on and we now have a very long line of support at 89. Prudence is the watch word here and I will watch.
JPM has not moved since August and is now at some kind of hinge. I do not believe it will make it to its count of 6 across the 42 line and the bearish counts are relatively huge. We have rallied enough in January to shake out the early shorts, so lets see what happens. By the way much of this January rally occurred while yield curve was steepening to its steepest in decades which means income to the banks. A top in JPM then goes along with a rally in TLT.
The chart of the yield on the 30 year bond supports the above. Notice the very playable hinge at 47.15. That was your signal to leave.
Although the problems of Greece and the Euro are very well known, this chart can turn very ugly. My initial count of 9 @150 called for a move to 141. Notice the hinge at 150. Since hitting support at 142 this market has been unable to rally even 50% of its very sharp loss. This is a sign of weakness and the count can start increasing substantially, across the 144 line for example.
Another giant bank. Wyckoff would call the trading range after the peak distribution after a high.
After a long consolidation between 187 and 208, Apple broke out, made a new high by 6 points,hinged at 212, and fell back into its range. That reaction of less than 50% of the preceding gain was a sign of strength, but the inability to then march on to new highs is not. It is a warning to watch carefully if not run.
We are on a hinge after a shakeout, watch very carefully.
Nuf said about interest rates.
I ended up tossing in a few banks. In no small part it is because they are in the news so much. In the midst of this great year, Wells Fargo has not moved since August. It looks like distribution and with a count of 16 on the 29 line I am projecting a halving of its price.
I was enormously bearish the long Bond but have change my position to neutral. The Short bond trade was getting crowded, as opposed to when we first put it on and we now have a very long line of support at 89. Prudence is the watch word here and I will watch.
JPM has not moved since August and is now at some kind of hinge. I do not believe it will make it to its count of 6 across the 42 line and the bearish counts are relatively huge. We have rallied enough in January to shake out the early shorts, so lets see what happens. By the way much of this January rally occurred while yield curve was steepening to its steepest in decades which means income to the banks. A top in JPM then goes along with a rally in TLT.
The chart of the yield on the 30 year bond supports the above. Notice the very playable hinge at 47.15. That was your signal to leave.
Although the problems of Greece and the Euro are very well known, this chart can turn very ugly. My initial count of 9 @150 called for a move to 141. Notice the hinge at 150. Since hitting support at 142 this market has been unable to rally even 50% of its very sharp loss. This is a sign of weakness and the count can start increasing substantially, across the 144 line for example.
Another giant bank. Wyckoff would call the trading range after the peak distribution after a high.
After a long consolidation between 187 and 208, Apple broke out, made a new high by 6 points,hinged at 212, and fell back into its range. That reaction of less than 50% of the preceding gain was a sign of strength, but the inability to then march on to new highs is not. It is a warning to watch carefully if not run.
We are on a hinge after a shakeout, watch very carefully.
Nuf said about interest rates.
