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A place for friends to gather and view stock market charts, discuss technical analysis and market outlook. What is your Principal Asset? How can it be developed? Each and all should do their own due dilligence and homework before investing. And by no means should you use anything I say or show here as a sole basis to buy or sell securities as everything is for educational experience only.

Friday, September 5, 2008

The VIX will define the direction..

Which will it be?
Market Bears: the VIX made a higher low and is merely pausing to break out of the current range?
Market Bulls: The sell off today capitulated at almost the exact level of a previous turn and is now at the right shoulder top of a H&S pattern and will thus test the bottom of the current range.

6.1 % unemployment and Consumer out of cash.....

The unemployment news speaks for itself.

Check out the true measure of the global consumer...Mastercard and Visa. Do not get hung-up on the fact that these guys are Credit card companies. They derive their business solely from the number of TRANSACTIONS made where a credit or debit card is swiped. It's pretty simple: No swipes = No Sales.

So where is the money going? How about indulgence items like tobacco, spirits, and can you say sex.....Yep when people are couped up inside what else is there to do.....So lets take a look at the Best in brand condom manufacturer...CHD. They deliver the goods of the powerful brand name condom "Trojan" as well as other consumer staple goods. I believe the charts speak for's almost as if they've been taking Viagra....up, up, up some more......

Thursday, September 4, 2008

OUCH! if you were long......

Today was a Bear's dream as everything pretty much sold off. You could pick any sector to look at as the oil/commodoties/equities trades continue to unwind. In short the global growth theory is no more or at least on an extended pause.

The Technology sector shows what can happen when patterns fail. The QQQQ, AAPL, CSCO, GOOG, & MSFT exemplify how the Bulls are facing an uphill battle of resistance.

Let's be real clear: there will be bounces along the way down to test the July lows, but those levels will be tested eventually.

AAPL is set to announce something on September 9 and here a a couple links to what it could be:

Wednesday, September 3, 2008

GLW, BBY, & RTH.....cause and effect?

Corning (GLW) pre-released a lower forecast sititng "slow" sales of their LCD glass products.

Hmmmm, I wonder who one of their major customers would be? Circuit City you say, yeah right are they still in business?

So let's take a look at Best Buy... Why has BBY not taken a hit if sales of LCD products is "slow"? Anyway the chart is shaping up for a nice short with a close stop.....

Part of the due diligence here is to checkout the RTH. The retailers have bounced a long way in a hurry on a consumer that is still running out of money and finds credit getting harder to obtain. The long term chart shows a green line of resistance and breaking down to a 6 month chart you can see an inverse H&S pattern. A failed breakout of this pattern could be the downward catalyst of this group.

Tuesday, September 2, 2008

IWM - Failing cup with handle - again?

The Russell 2000 is showing a similar pattern to July-October 2007. The failed cup w/handle of 2007 prefaced a serious downturn. Could this be the begining of the next leg lower?

If it fails now - a corresponding 2007 move would project the
IWM to approximately $58.

The S&P 500 20 day - 30 min chart is pretty telling of Tuesday's activity. A broken trendline and fibonacci line which should have been support is
now resistance.

Add the failing of the QQQQ's inverse
H&S pattern sums up to be:
Oh yeah I almost forgot the most complelling of all....The VIX broke its trendline. All you have to do is look at what happened the last time a VIX downtrend was broken in late May.

Could we reasonably expect to see a couple of more market down days this week? And then a retest of this VIX trendline or market up for a few days, perhaps early next week...

And then the BEAR market continues.