When the gold/silver ratio is high, gold is relatively more expensive than silver, by historical standards. Some people use this ratio to trade between the metals. For a very long-term investor, the trade works like this: when the ratio is high, buy silver, and wait for the ratio to revert towards its mean. Then, sell the silver and buy gold at a better...
If you're holding short positions, today's closing ramp stung. That said, I want to point out that we remain within a down trend channel formed from the highs on the 9th and 23rd of June. Today's short covering ramp came up to test that channel, but could not break through. We will need to monitor this overnight to see if it is tested again. That said, we are...
During the rally from the March lows, the S&P 500 (top chart) progressively made a series of higher highs and higher lows, indicating an intermediate change in trend (the long-term trend is of course still down ). Beginning from the June 8th high, we have begun the process of producing a first low, and a lower high, but not yet a lower low. I expect that to...
Bond yields absolutely did not confirm today's "rally." Despite the markets moving up, treasuries were bought. As demand for bonds increases, the price of those bonds goes up, which lowers the yield each bond returns (less interest "returned" for each dollar invested). Thus, despite the equity market's gains today, which have the appearance of a "risk on"...
Much like the major indices, the stocks on the New York Stock Exchange formed a rising wedge from the March lows which has since broken down. And, also like the other indices, it produced an island reversal top from June 5th through the 10th. Though it has found support on the 50-day simple moving average (blue), it remains far below the 200-day simple moving...
I have every expectation that the broader stock indexes are headed for significant losses this week. Many charts are pointing only down from here. The most bullish case, from a technical perspective, suggests at the very least that the markets will strongly correct. What's interesting about this is the apparent divergence between what the stock indices are...
The daily ES futures chart using Heikin Ashi candles with volatility stops continues to support the view that we are in a new downtrend. We do want to see the lows from June 15th taken out for further confirmation, but I believe that is all but confirmed at this point. There are too many bearish patterns on too many major stocks at this point to suggest that we...
Just a quick update on the popular meme stock BYND. I pointed out the ominous rising wedge that was forming a couple of weeks ago, and it has now broken. Look for this to correct, probably somewhat dramatically.
I took requests on Twitter the other day and this stock came up. When I at first looked at the recent price action, I didn't see much right away, but I gained some clarity when I backed up. Back out all the way to a monthly chart and you might confuse this stock with a rocket ship company, given the verticality of its price action. However, in the time scale...
I am not presently in a gold trade, but I am watching it out of interest, to see if its price falls when the markets do (as I expect them to), just as it did in February and March. My hypothesis is that the economy is attempting to deflate at the end of a very long credit cycle, and that that process was arrested by Fed intervention. What I see on the charts is...
Caveat: I am not an expert Elliottician, though I have studied it to a reasonable degree. I use it to get a sense of where things may stand in very long term pictures. And when it comes to Apple, it's a beautiful, textbook, large Elliott wave structure, fitting that the crown jewel of the stock market would reveal itself so neatly. On the monthly chart, a very...
The QQQ, much like the other major indices, has formed a rising wedge off the March lows. This one, however is uniquely special both by its size and by the fact that on this chart resides one of the greatest bearish divergences I know of. Four unique higher highs in price, each one coupled with a lower high on the RSI over a span of six months. That is frankly...
I pointed out this broadening formation a couple of weeks ago, and it is still in play. At the top of the range, Facebook's stock has hit three new subsequent highs, each one trying to breach the top of the megaphone, and each time falling back again. But with each attempt, it reaches a lower high on the RSI. This is a symptom of weakening price action. When...
This once titan of industry, this echo from the very origins of the modern era in American industrial might, Ford's chart is one of the most consistently sad looking affairs I know of. There is almost nothing here on which to take note other than the consistent bearish channel it has been in for seven years now. After falling through the bottom of that channel...
Earlier tonight I posted a long-term daily chart which I believe demonstrates that we are now in a new downtrend. That said, in the short-term, I still see what looks to be a bull flag. We may try to go and fill the recent cash gap from a couple of weeks ago (red arrow) before finally turning down again with any serious selling. I do not personally trade such...
Despite today's short covering rip into the close, the ES futures remain in a long-term negative configuration. Until the recent highs in the 3230 range are taken out, swing traders can maintain short positions from here. We remain faced with a bearish wedge having broken down with a new down trend so far intact, though bears will want to see a new lower low...
I identified this ginormous rising wedge on TSLA the other day. This morning, it finally broke down from it and is conducting a backtest as we speak. If that fails, I would expect significant selling.
SPY looks like it is forming a classic bear flag on the 15-minute chart. If we continue to consolidate like this into the close, we may expect a large gap down tomorrow.