67 thoughts on “CHART OF THE DAY

  1. Jorgy

    Guarantee… I hate the word guarantee! Can’t use that word unless you are talking about income steams off an annuity product. ?

  2. AlexP

    it’s a done deal that DC in the greenback will continue as you anticipated quite well some 10 days ago.
    USD and SPX are barely correlated in the long-term; that’s something that has been documented in books on inter-market analysis. Why’s that? Simply because THE CORRELATION OF USD AND STOCKS (computed based on short-term periods, 20-40 sessions) IS A SINUOIDAL CHART, IT’S LIKE ALTERNATIVE CURRENT WAVE BANDS.
    That, folks, the correlation btw usd and stocks makes the heart beats of the Market !!!

    Now…correlation (20 days) is a very negative -0.8 —> it must turn back to zero TO DRAW A NEW CURL OF THE SINUSOID …. and we already can see the beginning of that –> positive correlation btw dollar and stocks as I write this.

    Thus, stocks are on the pullback –> they will automatically drag USD after them as the heart beat of the Market or, say, the electricity of the Market moves short-term correlation chart back to zero and further into positive territory

    1. Hong Bang

      Hi Alex,

      Please teach me what is the tool to create (paint) these correlation. Can we use stockcharts.com


  3. AlexP

    …..that also comes in quite nicely with the FOMC meeting –> that will be the driver to put short-term the correlation back into negative territory: USD to move higher while stocks will dive hard with a 50-fib62% retracement.
    — now into FOMC = positive correlation USD-SPX
    — 1-2 minutes after FOMC stmt = negative correlation butts in

    1. AlexP

      Victor, do you see? As soon as stocks moved higher on retailers’ vindication buying, USDX moved back up to 94.90 and EURUSD to 1.1333. That’s what I meant to show, the spirit of the market now.

      As institutions start shorting today, SPX will go into red and USD will also follow suite.

  4. AlexP

    …the correlation is so powerful that one even doesn’t need to look at how stocks move, it’s just enough to watch EURUSD and you can make a guess where SPX or even your own stock in your portfolio may stand πŸ™‚ πŸ™‚ usd follows stocks like a shadow or crying baby his parents

  5. AlexP

    just to make things worse for those poor foolish retailers, intraday head and shoulders in SPX ready to break lower of its right shoulder πŸ™‚
    where can EURUSD be ?! it’s already 1.1355 πŸ™‚ and USDX 94.8

      1. AlexP

        i dont know, victor, i dont like currency trading and i dont do it.
        i only look at intermarket correlations to aid in me in building my short-term framework of the broad stock market
        good luck there! if you can do FX trading well, congratulations, i cant.

  6. Super Mario

    Are you guys really going to jump into shorts here? SPY is rigged beyond belief. Recessionary data, plunging oil, crashing biotechs, nothing matters. It makes a higher low every single time and can’t sell off more than half a percent.

    1. gary Post author

      I only use it when I feel 99% sure I’m correct. I’ve only given a guarantee a few times. Usually it’s a money back guarantee if it doesn’t play out. I haven’t missed on one of those yet.

  7. Ryan

    One of our hedge fund manager’s quarterly investor letter likened the narrow market to the 1998-2000 run up to the dot com bubble top as well as the 2007 market top, with momentum names outperforming to a degree not seen since these tops. Another “sign” is private company valuations held by venture funds, of which more than 125 “unicorns” are currently valued at over $1B each, on metrics such as TAM (total addressable market). No revenues, just eyeballs. Tons of stories about how kids are leaving college to rent a couch for $1k per month in San Francisco to work for a start-up in hopes of getting in on the next hot IPO.

  8. William

    Folks, be prepared for a home run soon. But, i would suggest taking profit aggressively when gold is near $1,198 level as i think the chances of breakout at this 1st attempt is quite questionable. For GDX, look to book profit by $17 or about $52 in NUGT…be conservative with your targets and DON’T GET TOO GREEDY! as you know how fast these beasts can turn the other direction on intraday basis…


      1. William

        lol…me no your commander man. Just wanna say out loud here given the whip-saw we experience in the past months…We don’t need that especially when you are in-the-money now! Don’t let it disappear just like that!

        1. David Silver

          Exactomundo William! I have seen many of profits vanish time and time again so won’t let this puppy slip hence the secret of my portfolio growth is to lock in profits and move on to the next best trend.

  9. William

    Most people out there talked about the fact where gold price is testing the 200D-SMA. But, personally, i prefer to use 200D-EMA instead as exponential calculation placed more weight of the most recent price actions.

    In that sense, gold price has already tested 200D-EMA breakout level for the past 2 days, after having a breakout with a huge move on Oct 14th…so, expect prices to be higher from here in the interim.

    And, again, to me, moving average does has its weight in technical analysis. However, ultimately, the most important factor to confirm that its downtrend has changed is to see a breakout from its vertical resistance since the peak of 2011…with a possible re-test of the breakout and sustain above it.

    This is my focus for now and should be for every trader out there!

    1. William

      And, this is the 3rd time where gold is trading above 200D-EMA for 2015…and the passed two times didn’t really matter as price action failed to take down the ultimate downtrend line!

  10. David Silver

    William the charts are looking like a typical two steps forward one step back back and filling kinda bullish structure found in bullish stocks I.e. Mr. Savage’s wall of worry formation.

    Another up day thus far in the Shanghai, think this baby will lock step with the US and vice versa.

    Crude’s looking like a dud here, bummers.

    They say never short a bull market.

  11. AlexP

    Shanghai falling is not out of the blue, it is a laggard statistical variable –> it merely sniffed the downward pressure on US & Hong Kong stocks and followed that trend.

    1. David Silver

      Alex is it me or does it feel like all the markets are about to roll over? Energy, metals and stocks?

  12. AlexP

    I mentioned yesterday how I see the moves.
    I said yesterday that I thought we have yet to see the DCH in stocks. But it’s risky hunting it.

    Thus this rollover in stocks is temporary, it sets the stage for the climax move into daily cycle high.
    I’ll personally play this solely as a scalper – small exposures of my equity on earnings reports with limited investment span.
    As I also said yesterday, today I’ll make such a bullish move on weakness.

    1. David Silver

      Thanks for your quick insight and input.

      I think I will go to cash and short via Crude, metals/miners and Shanghai (didn’t like her close).

      Charts across the board appears to be overly exhausted and rolling over in tandem as they did before their last run up.

      1. AlexP

        You’re welcome, David, but I think it is a VERY risky thing to go short, it is risky to go into any position longer than 2 days except in a very solid stock which you see to be under strong accumulation (as I am with RUBI), but which even that is kept on leash with a stop (by the way, I enjoyed a lot the relative strength of RUBI vs broad indexes, nasdaq especially).

        better times to sail will come and this one does not make a favorable one.
        though, if you keep on going into a position other than very-short-term and on very limited exposure, please see that it has a stop-loss in place and that the trade makes sense on a reward/risk ratio , as you may have set the ratio based on your trading philosophy.

    2. Hong Bang

      USD is moving size way now !!! No direction !!!

      Alex, do you think the USD Γ­ in the new cycle now, we may in day 04.


  13. AlexP

    As I said, USD follows stocks now in a positive correlation: sp500 futures goes up, usd does the same and the vice versa. So it very much depends on what stocks are going to do: if they breakout big today, USD will break its declining trendline too and that will mean we are in a new DC of USD in day 4 as you mentioned.
    I incline to think that stocks will move lower today too but …who knows for sure ?!
    That’s why I am saying that I stay in cash now – it is a very uncertain environment, THE KIND OF ENVIRONMENT THAT DOES NOT MAKE SENSE TO ME ON A REWARD-RISK-RATIO BASIS or at least it does not for my trading system.

  14. Hong Bang

    It’s perfect count if we have a high in Gold today or tomorrow then a correction.

    USD is confusing me right now.

  15. Hong Bang

    Thanks Alex, My system tell me we may see a push in GBP, JPY. Euro is a bit confusing right now.

    Gold look like it want to go to 1198 before topping.

    Boring day ! :o) :o)

    1. AlexP

      yeap, but sorry! I’m not into FX or commodities trading, nor am I into daytrading.
      I am a trend-follower with a time span of my trades of 1week to 5 months.
      I do some scalping but very limited and not intraday.

      therefore, my advice/vision may not be of any help to you since you have a different philosophy, you and me trade in different trading paradigms.

  16. AlexP

    David Silver, one word of caution about what you said, that you would consider going short on crude: as I said several times so far, I do not trade commodities and I would especially not trade now, BUT, if I had a revolver pushed onto my head and its bearer shouting at me “alex, what way should I go with crude oil now ?” , then I would say that —> today is the DCL day; GO LONG! A NEW DAILY CYCLE IN CRUDE STARTS TOMORROW

    so watch out what you do with that short in crude !!!!!!!!!!!

    1. David Silver

      Thanks Alex for watching my back. Decided to go with how the MM”s play the open and it looks like they want to take her down and flip it long per your forecast.

      If it were the opposite I would’ve shorted her for sure.

        1. David Silver

          Alex the stalling uptick after the drop was a tell therefore I shorted her on strength into the open.

          Suicidal or genius.

          1. AlexP

            If you have doubts about the move, then you should not have taken it !
            This shows you do NOT have a trading system, David, and that does not bide well for your LONG-TERM trading prospects πŸ™

  17. bhowe

    Alex P
    You say the USD follows the market, yet above you say; “USD to move higher while stocks will dive hard with a 50-fib62% retracement”?
    Then you say, “today is the DCL day; GO LONG! A NEW DAILY CYCLE IN CRUDE STARTS TOMORROW”. But if the SPX is diving hard, must the USD follow lower?
    What do you expect the next five days?

    1. AlexP

      bhowe, sorry, but you didn’t read all my message up there πŸ™‚
      by β€œUSD to move higher while stocks will dive hard with a 50-fib62% retracement” I meant and I repeat that on FOMC day I expect USD and SPX to move into NEGATIVE correlation, i.e. away from the current POSITIVE correlation.
      So we have 2 periods: from now towards FOMC plus 1-2 minutes (positive correlation) and from after 1-2 minutes from FOMC stmt into Employement Sit (negative correlation).

      For the next five days? –>
      – STOCKS = choppy trading while stocks will manage to deliver their DCH (most likely on an upthrust towards SPX’s 200dma) but eventually will trend lower – the daily chart picture will like like a mess
      – USD = fighting its declining trendline just as it did fight its 50dma 2weeks ago but eventually bears will win. Bears will win this time too I think, just as Gary saw this before me 2 weeks ago or so.
      That’s my framework, BUT I STAY ON THE SIDELINES AND LOOK AT IT (just carrying my RUBI long-term play)

  18. Jorgy

    Told you guys the other day to wait for the announcement (or not) of EUQE2 and the wait for the the FOMC’s announcement of “Lift Off” (or not) next week. While everyone cuts themselves up in this chop I’m going back to sleep…. ?

  19. AlexP

    good call! me too, Jorgy πŸ™‚

    WATCH OUT: a bearish harmonic just developed in SPX across yesterday’s high and low and today’s action at the opening !!! Belts on ! The pullback I expected for today is on a HIIIGH probability ! πŸ™‚

  20. David Silver

    Okay went with my gut here at the open.

    Cleared all my longs and went short because all industries will feel the wrath IMO.

    So far so good.

      1. David Silver

        Yes thank you kindly for your replies my friend, I do appreciate them with William and Mr. Savage

      1. David Silver

        Thanks William!

        Such a hard market nowadays and I hate day trading and indecision on my part and sometimes admire my friends that stock to core holdings but seen them get slaughtered so maybe not, lol.

  21. Jorgy

    If the EU launches QE2 and the FOMC surprises the market with “Lift Off” we could see what Gary calls the “bloodbath or bankruptcy phase” in commodity producers. Institutional investors are betting on more QE from Japan and The ECB and are positioning for the next leg higher in the USD: http://insights.schwab.com/international/strong-us-dollar-changes-everything

    Not saying their USD thesis for continued strength plays out over the next 12-18 months but if it does then gold is going below $1000 and silver under $10 before the bear is over. Putting anything on right now is a 50/50 coin flip ahead of the ECB and the FOMC which is why I’m watching and going back to bed… ?

  22. William

    Both HUI & GDX are testing 100D-EMA again. Prices managed to stay above this level since the past 9 days…we shall see…

  23. William

    GDX almost tested its Fibo.38.2% at $15.57 and bounced off; Gold never went near its Fibo.38.2% at $1,158 at all and bounced off; Both GDX and HUI tested their respective 100D-EMA and manage to stay above that level;

    You might want to take profit on your shorts here as i believe these are the run-you-into-stops by the big guys who want to scare you off the long side!

    Again, my 2cents!

    Off to Zzzz…

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