This week will very likely be one we look back on as a big inflection point. We will see that the bears are coming back. It appears the market is forming a head and shoulders topping pattern. There are a couple different ways to trade this pattern depending on the level of skill and aggressiveness. One can wait for a closing bar below the ‘neckline’ on the time-frame in which you have identified the pattern. By operating on a closing bar basis you significantly reduce the risk of entering on a ‘false’ breakout. Entering prior to the close of the bar increases the risk of becoming part of the wick of a reversal candlestick should i...
Volatility in the stock market is represented by the CBOE Volatility Index (VIX), also known as the fear gauge. This tends to outperform when markets are falling or when fear over the future is high. Notably, VIX has risen 9.6% over the past one-month period, reflecting that worries over the stock market have started to build up. Will the fear level continue to rise and push up the index? What is Pushing Fear Levels? After an impressive comeback, the S&P 500 and the Dow Jones dropped for the third consecutive week, representing the longest streak of weekly declines since January’s market meltdown. This slump has wiped off most of the ga...
Flickr Intel (NSDQ:INTC) has dominated the high-performance x86 segment over the past decade singlehandedly. It’s strategic focus on deploying technologically advanced fabrication processes, ahead of its peers, allowed the chipmaker to gain an upper hand over its competition in terms of raw performance and performance per watt metrics. However, Intel’s node advantage may not last for long. Rival chip manufacturers namely Taiwan Semiconductor, GlobalFoundries and Samsung are upping the ante and are looking to advance their chip fabrication technologies at a rapid pace over the next two years. In fact, there is reason to believe that they ...
Using charts like the one below, you may recall that I had been call for a low in Oil in early 2016 and snap back rally in Oil and Energy stocks. Since that time, many analysts still called for another price crash, and that includes Goldman Sachs (GS). Is this important? It is if you missed some of the 100%, 200% 300% gains in some of the energy stocks. Did you see the news today about Oil by Goldman today? This was the headline. Goldman now says that they can see Oil trading near $50 . It is $47+ today, up from $26. That’s a rather late call. It seems that the charts are actually forward looking. They seem to be 6 mont...
A few weeks ago, I wrote an article about my best investing moves and the worst ones. As investors, we live various experiences and have the chance to learn from them. My fellow blogger ATL at Amber Tree Leaves commented on this article telling he that if could go back in time and start over again, he would immediately start investing with a systematic plan. The idea is to invest, even a small amount of money, on a regular basis. You could do it once a month or, even easier, invest every two weeks at the same time you receive your paycheck. If you choose the latter, it’s like reducing your salary at first, but you won’t feel the diff...
In the study of economics, one learns the circular flow of the economy between firms and households. This post however presents another circular flow model based on capital and labor. (It is a closed economy with no government for simplification.) There are 4 pools within this circular flow related to the income and utilization of labor and capital. In the center of the model is the percentage of national income from production that goes to owners of capital. We do have a capitalistic economy. The control of capital is at the center of the economy. Capital income is central to determining the pools around it… the percentage of national inco...
The Empire State Manufacturing Index crashed to -9.02 after a brief two-month rally. March was barely positive at +0.62 with April at +9.56. This month, the Bloomberg Econoday consensus estimate was 7.0 in a range of 2.50 to 11.20. Highlights What little momentum there was in the New York manufacturing sector is fizzling, based on the Empire State index which came in much weaker-than-expected, at minus 9.02 in the May report to end two lonely looking gains in April and March. New orders are at minus 5.54, also ending two prior months of gains and rejoining a long run of negative readings going back all last year. Inventories, at minus 7.29,...
We have followed the ownership changes of London’s massive vaults with keen interest ever since our December 2014 article when we reported that Deutsche Bank’s gold vaule was for sale in “Massive 1,500 Ton Gold Vault For Sale In The Heart Of London, One Previous Owner, Asking £4,500,000 O.B.O.” The fate of that particular vault was revealed earlier this year when Reuters reported that none other than China’s largest bank, ICBC Standard Bank, was buying the lease on Deutsche Bank’s London gold and silver vault, “enlarging its footprint in the city’s bullion market” The Chinese and South ...
It is with some discomfort that I am always pointing out potential tops in the U.S. stock market indexes. But, I must call them as I read them. The S&P daily chart has made ZERO upward progress in 18 months. A possible complex H&S top formation is under construction. Also note the appearance of a 7-week H&S top pattern. I am willing to short this smaller H&S pattern if given a well-defined risk point. I will give up on a bearish interpretation of the S&Ps if a new high is made – but this does not mean I would have any interest in being long in new high territory. The Nasdaq is tracing out a possible broadening top, altho...
We often think of liquidation events exclusively in terms of price, but in the real economy there is volume to consider. When financing dries up as financial agents run for cover lest they receive only further margin or collateral calls, it enacts a short run disruption in economic flow. At the margins, some firms are forced to delay activity while others are can only give up altogether. It is difficult to figure how much in any liquidation is temporary and how much ends up as a permanent reduction. The dramatic events of January and February all across the globe undoubtedly created just this kind of mix. As it ended around February 11, there...