Author Archive for Shanky
Now don’t get all giddy on me. I’m not calling a bottom in Natgas (I have targets ranging from 3.25 to 2.42). I am saying that there may be a chance of some unwarranted move north in the most abundant fuel source on the planet. Now, I know that the coal and oil companies dominate the landscape in both Washington (regulation) and on Wall St. (power to control price). I know that we have enough Natgas in the ground that could easily be extracted to last hundreds of years. I know that environmentally that Natgas is the cleanest burning mass fuel supply available to the world. No the backwardation variation of UNG’s price to Natgas is not about to go away either, but could it be ready for some sort of oversold correction?
I have been using the weekly SPX chart as a nice guide that has kept me in the bulls camp most of the way up (and at times it has made me more unpopular than others) . The 60 and 30m charts are not worth a hoot these days (as demonstrated last week) for anything. The daily charts (which I live and die by) can remain overbought or oversold for extended periods of time. Since we are approaching a major top you need to back it out a little and begin to include the monthly and weekly charts in your analysis.
[caption id="attachment_17810" align="aligncenter" width="150" caption="ESU9 Channel cracking"]
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OK, The channel is plain as day. After the/ES put in a PERFECT double top at 1038.75 is the correction upon us? Finally a break of the lower tendline. Not confirmed of close under trendline, but a potential sign of weakness. Note the red trendlines above and below. These are the 50% and 75% trendlines of the larger channel off of the 667 low. They have been acting as nice buffers as can be seen in the chart.
Yes, I am posting a mini rant here that has been a little cleaned up for ST readers (to feel a full rant read Tom Brokaw Can Kiss My Butt). IMO this is a really tough point in the market right now. You have the bears all (rightfully) screaming how bad things are and then you have GS throwing out upgrades like candy. Is this the end of 2 of 1 of P3 and we have a 3 of 1 in our sights? Is this 2 of C of P2 up? What is an investor to do? Really tough point right here. One thing for sure, nut cuttin time is uppon us and we’ll know for sure in a week or so which count is right.
Looking at the chart of light sweet crude today. We have two options.
1) Up scenario – are we in a 5 wave corrective move up? The count looks good and places the target price in the yellow box between 76 and 86. A price of 78 completes a 38% retracement of the whole fall from 147. The indicators seem to favor further strength. RSI is taking out a trendline and moving thru 50, MACD appears to be getting a bull cross on and S Sto is headed up. All have plenty of room to run.
2) Down scenario – completed a near perfectly measured ABC corrective move stopping just short of a 38% retracement. Crossed under the 30 and 45 ma’s that have tracked the price so well thru this chart. Look at the 147 top and see what happened the last time these two ma’s crossed. Well, $WTIC is trading under these two ma’s and they appear to be headed for the bear cross. After $WTIC broke the lower channel line, it has come back like a champ for the backtest of the trendline and should meet resistance from the 30 and 45 ma’s.
I hate being wrong. Let’s get that out of the way. A few days ago I made a weak case for a bounce and got about 7 points before further collapse. Admittedly very wrong. Why? I have become so accustomed to the PPT, GS and the marry gang propping up the markets every time the 60m bottomed out I lost all focus.
Well, here is a little more versed shot at why we have a minor correction here before further weakness.
Pretty self explanatory. This is the bear market channel I have shown before for the /ES. If it does bust it, 938 will be the line in the sand IMO. Is the painting of the statements over? The high this morning at /ES 926 touched the channel line on a 1m chart. 60m SPX bounced off of the 61.8% retrace from the 956 top. 60m indicators on SPX are overbought. The dailys still have some room to run up. Taking out the 927 high was a big deal, but I don’t think we take out 956. This move up (if it continues) should set the indicators on the weeklys for a pretty strong fall. I would not be surprised to see the manipulators drive the market thru this trendline on low volume holiday week. Either the 60m continue to embed and the dailys run their course up or we have a minor pullback here.
GL trading. http://shankystechblog.blogspot.com/
OK, notes are on the chart, but I’ll try to get all the facts in.
UP Case – Bounced off lower BB, got golden cross, daily RSI takes out trendline and headed up (must get thru 50), S TO at bottom (can embed), MACD Hist turning up, possibly just completed and ABC corrective, possibly just had an A-E falling wedge throwunder. P2 is not over and there is more upside. (NOTE – 60m are rolling over right now).
Unfortunately they won’t let me cuss here LOL, so this will be pretty clean compared to my last few blog posts at home. We’re toppy, but not quite there just yet. What I want to see are divergences in the weekly indicators. We’re getting solid roll over in most on the weekly and the daily indicators have the necessary divergences in place. The daily RSI crossing the 20ma is one of my keys for the turn and it is sitting right there right now. If the Daily’s pull down like expected then this could be it, but we’ll have to see.
5 Bottom scenarios and a couple of charts to look at.
Below is a LT chart of SPX. The channel drawn includes the 25, 50 and 75% lines. Please notice the last time we touched the bottom of the channel was in 1942.
