Ichan’s “Party Bus”

It’s been over two years since Carl Ichan gave his Blackrock “Party Bus” speech right in front of the Blackrock CEO himself:  Larry Fink.

Our short video of BLK shows just one dramatized (but then again, maybe closer to the truth) outcome if we have indeed seen the highs.

For a more serious look at the technical picture, go to this link for analysis.

Pencil Nubs

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Sharpening one’s pencil to the nub, attempting to calculate corporate earnings down to the gnat’s gonads, is a futile task.

The consensus miss on the recent earnings release from Chicago Bridge and Iron (CBI) is just one case in point.

A much better approach, one that’s been proved since the early 1900’s is the method used at this link.

Clicking on the S&P Sector Archive shows two recent charts of the S&P 500.  Price action of the market itself identifies the next likely direction.

A century ago, the father of technical analysis (Wyckoff) stated it himself:

  ‘The most important thing in Wall Street is to know what will happen next.’

So now the S&P has reversed.  That fact presents the next question … what will happen next?

The answers do not lay in earnings reports, interest rate pronouncements or unemployment numbers.

The answer to market direction is in the market itself.

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For technical analysis on individual stocks, markets or indices, please visit our parent site at www.ten-trading.com

Upwards, Sideways & Down

Fotosearch_k8916628-1That’s the direction of the Dow Jones 30, the S&P 500 and the Russell 2000.

Intermediate and advanced trading professionals understand what this means.

When a market has experienced a long, sustained advance that may cover months and years … near the end of that advance and just prior to the ultimate top, the market thins out.

That’s the process whereby fewer and fewer stocks are participating in the advance.  Essentially, the bear market has already started as more and more stocks fall away from the uptrend.

In fact, ZeroHedge just reported the S&P 500 in its narrowest (11-day) closing range in history:  An unprecedented event.

Now that we appear to be at the upward extreme, what happens next may be unprecedented as well.

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For technical analysis on individual stocks, markets or indices, please visit our parent site at www.ten-trading.com

 

If you want to get rich …

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If you want to get rich, you have to go broke first.  Maybe you’ll have to go broke several times.

It seems this step is an invariable requirement in the acquisition of wealth.  The market masters of the early 1900’s went broke.  Speculators like Livermore, Keene and Wyckoff.

Even Robert Prechter of Elliott Wave International has stated as much in his interviews; He puts it a little differently:

‘Be sure to lose your first fortune(s) early … so that you have time to recover.’

Note his inference on ‘recovery’.  Winners recover.  Losers recount.

I have an acquaintance that wants to begin trading in earnest; searching to gain significant wealth.  He’s already had a successful career having been a weapons officer in the Air Force and later, an aerospace engineer.

Now, he asks me market questions, the answers to which require that he invest countless hours (and possibly years) of study and dedication to learning the craft.

After a recent barrage of such questions and in a sense of exasperation, I simply said:

“If you want to learn about the markets, the best way to do that is to start losing money.”

How much better it would have been for my own firm to have understood that fact.  We would have set up at least three separate trading accounts … the first two of which were expected to go to zero.

If by that time (the third account), a concise plan had not been developed, well then, one can at least decide to exit the profession altogether having lost only 2/3rds of one’s wealth instead of it all.

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For technical analysis on individual stocks, markets or indices, please visit our parent site at www.ten-trading.com

Preparing For Gold Hysteria

Fotosearch_k44766586-1For there to be a lasting blow‑off capitulation up‑thrust (and reversal downward) in gold, the stage needs to be set.

Reports like the one at this link help to set the stage for investor panic.

Personally, I appreciate Greg Hunter’s weekly wrap up and have watched it for years.  Mr. Hunter was an investigative reporter, unique in his style and ideas … as is typical of someone with an edge or focused capabilities, he found himself on the receiving end of a corporate pink slip; or as he put it, ‘We have chosen not to renew your contract’.

On the flip side and by definition, Mr. Hunter’s guests are part of the masses; they are in the public eye.  In that case, their ideas are public and mainstream.  In the final outcome, the total of all mainstream and public (trading) ideas must result in loss.

Will this time be different?  Will gold and silver see a blow‑out move to the upside and keep on going?  Certainly, it could happen.  Anything can happen.

As has been reported previously, sentiment indicators do not favor a long term sustainable upside move.  There is too much bullishness.

What’s more likely, is some kind of penetration above known resistance with the attendant mass hysteria about “This is it!”

If and when that happens, we’ll be on the sidelines monitoring volume and price action … with an eye on going short.  If so, we’ll be positioned for a potentially dénouement down move in the precious metals and mining shares.

For technical research and analysis of the precious metals and other sectors, please visit our parent site at ten-trading.com

 

“Buckle your seat belt Dorothy ….

’cause Kansas is going bye – bye.”

If there’s a spot for the market to reverse, this is it.

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With markets at stretched, bloated and obscene valuations (as reported by David Stockman), we even have an article that tells us the bull market is just getting started.

Well, anything can happen but false narratives abound at the extreme end of a trend.  A ‘new bull market’ could very well be false.

In depth technical discussions of the S&P and other markets are on our corporate site located here.

The bottom line is, we might already be on the ride … to much lower levels.

 

Charts produced by TC2000 which is a registered trademark of Worden Brothers, Inc., P.O. Box 1139 Wilmington, NC 28402.  Ph 800-776-4940 or 919-408-0542.  www.Worden.com

 

 

 

Coiled Spring

While the market looks dull, it’s actually coiled up like a spring ready for its next move.

The best analysis we have found thus far, is the quote below.  The analyst states that price action looks like a pendulum swinging down to rest.  We’re in a brief period of dull market activity.

“These dull periods often occur after a season of delirious activity on the bull side.  People make money, pyramid on their profits and glut themselves with stocks at the top.  As everyone is loaded up there is comparatively no one left to buy, and the break which inevitably follows would happen if there were no bears, no bad news or anything else to force a decline.”

Indeed, it’s an excellent assessment of the price action in the S&P as seen below.

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The problem is, that analysis was not written this past Thursday or Friday.  No, that assessment was written over a century ago in Wyckoff’s seminal text:  Studies In Tape Reading.

To understand the present, we need to understand the past:  especially with stock market activity.

The human condition has not changed since inception.  There’s no new ‘quant’ program that has it all figured out.  If that were true, price action would look different.  We would not be able to use century old techniques to call market turns to-the-day (repeatedly) as detailed here and here.

The only media mention of Wyckoff that we’ve ever seen is a brief reference by Linda Bradford-Raschke (former pit trader) at this link.  At time stamp 0:36, she mentions Wyckoff.  It almost slips by for those not attune.

  • If the pit traders know where to go for guidance, should we not do likewise?

As we come forward one hundred years, we see the S&P has coiled itself like a spring.  For the past seven-plus years, it’s been delirious bull market activity as Wyckoff stated.

Traders and investors have continued to gorge or force themselves on every last up-tick.  The market has now come to rest apparently unable to move higher.

What new catalyst will come to the fore to launch to higher levels?  It could happen:  However, the most probable resolution of this formation is a move to the downside.

References:

Wyckoff quote from Studies In Tape Reading.  Used with permission from Cosimo Classics.

Charts produced by TC2000 which is a registered trademark of Worden Brothers, Inc., P.O. Box 1139 Wilmington, NC 28402.  Ph 800-776-4940 or 919-408-0542.  www.Worden.com