Bears are Waiting at the Station

 Gaps up in daily price bars or candles don't always have the kind of follow-through necessary (ie more buyers) to continue the upward momentum the overnight traders generated. Positive momentum following a gap is often dependent on how far away the next line of resistance is or how large the window might be.

 Left click on chart(s) to expand

 This morning's gap managed to drive the Dow Jones Industrials well through a trendline, but the selling pressure was too much to overcome, and by day's end, the Dow finished the day parked right on the trendline, which has served as a price magnet for the past several days.

 It takes millions of shares (and hundreds of millions of dollars) to push a trading vehicle like the SPY up ten or twenty cents. While this may seem inundating (monetarily), it is not such a difficult task when there are plenty of short-sellers to squeeze on the way up.

Bears are wondering when their train will arrive

 It would seem, however, bears have lost much of their, "short everything," bravado and have finally chosen to wait at the station for the train to reach them, rather than suffering through their previously impatient and futile attempts to board a steaming locomotive on the way there.

 The world will eventually come to an end, my dear bear friends.

 It leaves me to wonder why so many of you have been in such a rush to get there.

 

Always perform your own due diligence. These are only my opinions.

Always perform your own due diligence. These are only my opinions.

Ambitious

Always perform your own due diligence. These are only my opinions.

Bearish Technicals? What Bearish "Technicals?"

 Manipulation on the markets? Sure there is, and this is nothing new going back eighty or ninety years. Charles Dow may have been the pioneer behind Dow theory, but later on, S.A. Nelson and William Hamilton refined it:

* The first assumption is: The manipulation of the primary trend is not possible. When large amounts of money are at stake, the temptation to manipulate is bound to be present. Hamilton did not argue against the possibility that speculators, specialists or anyone else involved in the markets could manipulate the prices. He qualified his assumption by asserting that it was not possible to manipulate the primary trend. Intraday, day-to-day and possibly even secondary movements could be prone to manipulation. These short movements, from a few hours to a few weeks, could be subject to manipulation by large institutions, speculators, breaking news or rumors. Today, Hamilton would likely add message boards and day-traders to this list.

* from www.stockcharts.com

 "Manipulation of the primary trend is not possible." 

 What is the primary trend?

 That would depend if you are bull or bear.



Bulls are Continually Under Attack on the Internet

 What is the primary trend of the US dollar? Gold? The stock market?

 Deciding which is doing what is a matter of interpretation.

 Technical bulls will view the primary trend of the stock market as, "up." This bias will be reflected in their charts.

 Technical bears will view the primary trend as, "down." Unlike bulls, however (who pretty much seem to stick to charts), most bears seem to back their "technicals" with an arsenal of bad news. The bear's bias, technically speaking, has been corrupted by whatever, "the world is coming to an end" internet site they choose to read, in which case they'd probably be better off leaving charts out of the equation altogether. Aside from the occasional downstroke, their charts have been wrong for almost three years running, after all, though they do deserve some credit for their "technical" perseverance.

 Grab a chair, bears, you're probably going to need it.

Always perform your own due diligence. These are only my opinions.

Gold Bears May Signal a Reversal

 Over the course of the last four years, we've seen images of the US dollar being compared to bathroom tissue (toilet paper, if you'd rather) and a pile of junk in a garbage dump, among other things, none of which were particularly flattering.

 Most of these images were scattered about on the various technical analyst's sites, complete with charts that were quite convincing, eloquently listing all the reasons why there was no stopping gold from going up and no stopping the US dollar from going down.

 How things have changed.

 A dip in gold here, a blip in the dollar there, and these same analysts are now saying there's no stopping the US dollar from going up and no stopping gold from going down.

 Their reasons and rationale are all there, of course. Just as they were when gold and silver were going parabolic. 

 Far too many technical analysts have become little more than cheerleaders that conveniently switch from one side to the other, depending on which side is winning.

 While being bullish on gold was "in vogue" with chartists just a few months ago, the fashions seem to have have changed.

 "Green's the thing now, honey, did you miss the memo?"

 Apparently, I did.

Always perform your own due diligence. These are only my opinions.

The Dollar and The Stock Market

 All inverse correlations eventually fail, and a nine year trend does not necessarily mean it will continue working.

 We have been warned repeatedly that a rising US dollar is a precursor to a crash in the stock market. That would be true if inverse relationships always worked, but they don't.

 There is no law that says money cannot flow back into the US and its currency and makes its way into the stock market and the economy.

Left click on chart(s) to expand

 

 It has only been the last nine years where we've seen the dollar and the markets work their way in completely opposite directions. A rising dollar meant falling markets, a falling dollar meant rising markets.

 Foreign investors may be looking toward the US now, as a place to invest in a bottomed-out economy as their own countries begin slowing down.

 Don't discount the US. They are still the world's largest and most influential economy.

Always perform your own due diligence. These are only my opinions.