If you look to the Chart below you will see most evidently the major top I speak of.  It is a Head and Shoulders top like the one in my US Dollar Index article’s Daily Chart.  But this is on the Weekly Chart and therefore shows longer term patterns.  This top is considered a long term major top and may play this role for some months to come.  The target to fulfill the pattern may be below 950 point for the S and P 500 Index and may well spell the beginning of a long term downwards cycle for the world’s financial markets.

This is the way the Chart looks:

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With the stock market lurching again, plenty of investors are nervous, and some are downright bearish. Then there’s Robert Prechter, the market forecaster and social theorist, who is in another league entirely.

Mr. Prechter is convinced that we have entered a market decline of staggering proportions — perhaps the biggest of the last 300 years. In a series of phone conversations and e-mail exchanges last week, he said that no other forecaster was likely to accept his reasoning, which is based on his version of the Elliott Wave theory — a technical approach to market analysis that he embraces with evangelical fervor.

Originating in the writings of Ralph Nelson Elliott, an obscure accountant who found repetitive patterns, or “fractals,” in the stock market of the 1930s and  -40s, the theory suggests that an epic downswing is under way, Mr. Prechter said. But he argued that even skeptical investors should take his advice seriously.

“I’m saying: ‘Winter is coming. Buy a coat,’ ” he said. “Other people are advising people to stay naked. If I’m wrong, you’re not hurt. If they’re wrong, you’re dead. It’s pretty benign advice to opt for safety for a while.”

His advice: individual investors should move completely out of the market and hold cash and cash equivalents, like Treasury bills, for years to come. (For traders with a fair amount of skill and willingness to embrace risk, he suggests other alternatives, like shorting the market or making bets on volatility.) But ultimately, “the decline will lead to one of the best investment opportunities ever,” he said.

Buy-and-hold stock investors will be devastated in a crash much worse than the declines of 2008 and early 2009 or the worst years of the Great Depression or the Panic of 1873, he predicted.

For a rough parallel, he said, go all the way back to England and the collapse of the South Sea Bubble in 1720, a crash that deterred people “from buying stocks for 100 years,” he said. This time, he said, “If I’m right, it will be such a shock that people will be telling their grand kids many years from now, ‘Don’t touch stocks.’ ”

The Dow, which now stands at 9,686.48, is likely to fall well below 1,000 over perhaps five or six years as a grand market cycle comes to an end, he said. That unraveling, combined with a depression and deflation, will make anyone holding cash “extremely grateful for their prudence.”

Mr. Prechter is hardly the only market hand to advocate prudence now, but nearly everyone else foresees a much rosier future, once current difficulties are past.

For example, Ralph J. Acampora, a market analyst with more than 40 years of experience, said he moved entirely out of stocks and into cash late last month. Now a partner at Alverita, a wealth management firm in New York, he said recent setbacks suggested that the market would drop another 10 or 15 percent, probably until September or October, before resuming another “meaningful rally.”

Over the next several years Mr. Acampora expects an “old normal market,” characterized by relatively short-lived swings that will provide many opportunities for smart investors — one that resembles the markets of the 1960s and 70s. “I’ve lived through it,” he said.

Like Mr. Prechter, he is a past president of the Market Technicians Association, the leading organization of technical market analysts, and he said that his colleague has done “some very good work.” But Mr. Acampora doesn’t agree with Mr. Prechter’s long-term theories, either intellectually or emotionally.

The “mathematics don’t work,” Mr. Acampora said, because such a big decline would imply that individual stocks would need to trade at unrealistically low levels. Furthermore, he said, “I don’t want to agree with him, because if he’s right, we’ve basically got to go to the mountains with a gun and some soup cans, because it’s all over.”

Still, on a “near-term” basis, he said, “We’re probably saying the same thing.”

Similarly, Larry Berman, who co-founded ETF Capital Management in Toronto and recently ended his term as the president of the technicians association, says he sees a “classic” short-term negative market trend developing now. But he doesn’t use the Elliott Wave theory, saying Mr. Prechter is trying to “measure the market in decades, which is too long a time frame for practical trading purposes or for risk management.”

Mr. Prechter, 61, lives in Gainesville, Ga., where he runs Elliott Wave International, a forecasting and publishing firm. He graduated from Yale as a psychology major in 1971,dabbled as a singer, drummer and songwriter in a rock band and became a technical analyst for Merrill Lynch.

He became fascinated by Mr. Elliott’s writings, which suggest that the market moves in predictable if complex patterns. Along with A. J. Frost, Mr. Prechter wrote “Elliott Wave Principle,” a 1978 book that predicted the emergence of a great bull market — a forecast that was largely fulfilled. By 1987, he was widely regarded as an expert in technical analysis. Articles in The New York Times said he was known as “the market’s leading technical guru” — and more. An article in October that year said he had “emerged as both prophet and deity, an adviser whose advice reaches so many investors that he tends to pull the market the way he has predicted it will move.”

He has far less day-to-day influence now, after years spent developing a theory he calls “socionomics,” which holds “social moods” as the cause not only of market cycles but also of economic and political events. A grand cycle is ending, he says, and the time for reckoning is near.

In 2002, he published “Conquer the Crash,” which predicted misery ahead. Even so, he said in 2008 that the market would soon rally sharply — then said late last year that stocks were about to fall and that the great decline would resume.

Since 1980, the advice in his investing newsletters, when converted into a portfolio, has slightly underperformed the overall stock market but has been much less risky, losing money in only one calendar year, according to calculations by The Hulbert Financial Digest. Mr. Prechter said he disagreed with the methodology used in these measurements, but offered none of his own.

For his part, Mr. Acampora says that the Elliott Wave has some validity as an indicator but that “it’s only part of the story” of technical market analysis, which also needs to be buttressed by economic and fundamental research.

Mr. Prechter says his unifying theory, socionomics, is a “young science.”

“We’re quantifying it,” he said. “We’re working on it.” In the meantime, he contends, it has enabled him to “look around the corner” and prepare for a dangerous future.Popular Posts:

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Brazilian share prices closed higher yesterday because of the rising global commodities prices. The benchmark Ibovespa stocks index closed 1.4% higher than the previous days close at 64,442 points. Volumes were at the usual level for this season.  Volumes were reduced yesterday by Brazil’s participation in World Soccer Cup play in South Africa, with most investors watching the televised game rather than the Ibovespa index.

Brazilian shares, meanwhile, rose in yesterday’s trading together with global commodities prices. Rising metals and oil prices contributed directly to the bottom line of major Brazilian exporters. Locally, the market was positively influenced by Brazilian President Luiz Inacio Lula da Silva’s decision to veto portions of a bill that would have increased long-term costs to the nation’s pension system. They also hailed Finance Minister Guido Mantegas pledge to maintain the governments’ 2010 fiscal goal of a surplus equal to at least 3.3% of gross domestic product. At the end of trading, Raw Materials and Telecommunications sector stocks were among leading gainers. Mining giant Vale rose 1.2%, southern steel maker Gerdau went also higher, rising about 1.8%.  The Telecommunications Industry leader Tele Norte Leste rose 2.6%. Despite a rise in global oil prices Brazil’s government-controlled energy giant Petrobras, ended lower, dropping less than 0.2%.  Aircraft manufacturer Embraer, rose at least 0.6% Mining utility Cemig advanced up about 2.0% to close at 25.40.Popular Posts:

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As I have written on a few occasions in the past on the Market Snapshots Category, the S&P 500, or “The World’s Barometer” can usually succeed in showing the trends the markets may be taking and give a glimpse into what may lye ahead for the World’s Financial Markets as well as the Global Economic Markets as a whole.  It seems that the worst may be over now for the US Markets and the World’s Economies as the SPX, after topping out in late April, forming a solid U top, is now signaling a clear bottom both with a double bottom on the Daily Chart below, and a major Japanese Candlestick OKR, an engulfing pattern as shown on the Weekly Chart at the bottom and explained in my OKR Tutorial.

This is the way the Daily Chart looks:

This is the way the Weekly Chart looks:

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As these lines are written, the S & P 500 Index, the one I call The World’s Barometer, as it gives a relatively sure indication of the world markets’ direction, seems to have ended the correction I spoke about in previous articles in this Category.  It has, as shown in the Chart below, made a significant Japanese Candlestick pattern called a Hammer and it does indeed look like one.  This hammer gives the final blow to the downwards descending pattern and the verification, or Trust, we see tonight is the beginning of a new upwards trend.

The blue lines that surround the price candles are Donchian Channels.  When the prices hug these channels at the high end or at the low end for some bars, the prices tend to go up to the signal line (red–in between) and many times past it and correct to the other extreme.  Here we see that the Donchian Channels were tested most of the week, and now seems the price’s chance to correct is coming.  And it comes just in time.

The Retail Market in the U.S., as represented by their respective equities, is starting to recover from the blows of this harsh Correction.  The SPX correction was at the 61.8% Fibonacci Correction Level and those tend to be particularly harsh most of the time.  Please check out the Daily Chart below, of a trend-reversal day at 1:33 p.m. EDT of the United States.  It speaks for itself.

This is the way the Daily Chart looks:

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We can quite clearly see that the S&P 500, Standard and Poor’s Index of the 500 leading World Stocks traded on the Wall Street Stock Exchanges is on a terrible downturn lately and has seemed to disgrace the recovery position we thought ourselves to be in and cause a new flare up of “analysts” predictions of a double-dip or a new economic crises to which there is no shred of empirical evidence.

In fact, if you look at the Weekly Chart below, you will see the upwards trends, lines that may indeed be followed by the prices and do indeed indicate an upwards movement.  Also you can see the dotted lines, representing Fibonacci Correction levels, returning upwards at the 23.6% level.  This is a line that is also an historical s/r line and is standing strong here as a support for the price levels of the Index.

In addition, if you will observe the Daily Chart you will see the Piercing Candle (a green candle from Friday’s session that pierces the big red candle from Thursday through more than half its’ height up and conveys a sign of trend shifting), giving us hope that the weekly lines will hold in addition to the support line that is right at the weekly close mark.

Friday’s sigh of relief after an early day plunge that ended up in an upbeat green candle showing over a 1.5% move up in price level compared to the previous close gives us a fundamental reason that the optimism of the capping up of the week will slide on down to this coming week.  Since I am an incurable optimist, I do indeed believe that the business cycle is in a recovery phase and not headed to dip itself anywhere dangerous until the next foolhardy and greedy businessperson gets a new idea about some “very special” profitable financial instrument that can be a potential poison to us all.  And, economically speaking, there is no reason for the market’s panic over the last period, hey guys, everything will be all right, promise!

This is the way the Weekly Chart looks:

This is the way the Daily Chart looks:

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If you want to enjoy success with your online trading, you will have to gain mastery over your emotions. Your stock exchange decisions cannot be ruled by emotions. This is where very often beginners make mistakes. When you are new to the stock market, everything will be new to you. It will take a considerable amount of time for you to first understand the basics of stock market investments, various types of stocks, different stock market approaches, Technical Analysis, various stock market trends and movements etc. This can be highly overwhelming for a beginner. It is very easy to succumb to one’s emotions while making important stock investment decisions.

Panic is one of the common factors that ruin your success. When the market trend goes against your predictions and when you see that you are likely to meet some loss, you are likely to act impulsively. Impulsive decisions are not aided by reason and they are very likely to be wrong so it is important that you be in control of your emotions. This is one of the most challenging tasks as a beginner.

You will be able to manage the situation better by getting some professional stock market help. Today there is so much help available online. You should make use of all the help you can get. Do not wait to make all the mistakes by yourself. By getting help from seasoned experts in the field, you can learn without actually making many mistakes. The more knowledge you have regarding stock investments the better it is for you. You will be in total control of your decisions by making efforts to learn about the stock exchange.

When beginners see that all their calculations are going wrong when the stock market is volatile, they will try to undo their mistakes by taking quick decisions that are made out of fear. Only when your stock market decisions are aided by sound technical analysis, you can count on success.

When you combine external professional help and your own ability to technically analyze the market, you are likely to make sound decisions. Market volatility will not shake you and over a period of time you will be able to see yourself making sound stock market decisions despite severe market pressure. Until you reach such a stage, you will have to tread cautiously so that you can avoid mistakes and the associated loss.

You will be able to find highly useful information at Techcharts4you.com that will help you make right stock market decisions. You will not have to surf the internet for several hours in an effort to find top-rated stock market help as you have everything you need here in this website.Popular Posts:

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Whether you are venturing into the Stock Market as a full time endeavor or just planning to use it as your secondary source of income, you need to first understand the basics of the stock market so that you can make the best use of every investment opportunity that comes your way. Added to that, it is important that you approach the Stock Market in a highly professional way so that your investments are fully guarded against risks.

When it comes to personal financial investment in stock market, you cannot expect to be 100% free from risk. However, every successful stock market investor tries to minimize the risks as much as possible. Even the most experienced stock market investor is not completely without risks. The only difference between a professional stock market investor and a rookie is that, the beginner will not know how to minimize his or her risks.

You will be able to minimize your market risks by improving your abilities in Technical Analysis. All your investments should be supported by sound Stock Market analysis. The Stock Markets are not a game of luck. If you are relying on your luck, then the best place for you would be a casino and not the Stock Market.

Before you approached the Stock Market, you should have done your homework. You should assess market trends and make use of all the professional support and help that you can. One of the secrets of making effective market analysis lies in one’s ability to make the right associations. You should be able to associate various happenings across the globe and make intelligent connections. This, of course, is not an easy task but it requires a lot of experience. As a beginner, you are bound to feel overwhelmed with the technical terms and with the jargons. These have made many beginners give up totally on Stock Market Analysis. Such people end up making their investment decisions based upon their gut feelings or on their friend’s advice without fully reviewing their choices.

This will not be the best way to approach the Stock Market as this will only increase your risks. Rather than making random decisions, you should find some reliable help. There are a number of resources on the internet that you can use today readily. You should also constantly update yourself with all the basics required for making sound Technical Analysis. At TechCharts4You.com you will find the best resources available on the internet. All the resources are made available to you here free of coste. By making use of such resources your abilities will gradually improve over a period of time. You will also be able to make accurate Stock Market predictions based on Stock Market Analysis once you learn the game.Popular Posts:

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Today I intend to start a series of articles that will attempt to ascertain the direction that the economy is taking by examining a crucial market on which all of us depend on to some extent.  That is the petroleum and petroleum products markets.

There are certain aspects here I would like to relate to but first I would like to address several fact concerning them that are worth to know:

1.  There were not found any great fields of Light Crude Oil like those in Saudi Arabia or the North Sea for decades.

2. Atrophy of the fields is becoming widespread, like the Cantarell Fields in Mexico.

3. According to the financial statements of the big oil companies in the world, those that are not government owned, there is a constant struggle by them to renew their oil reserves.

4. In spite of the escalation of prices, there has not been an increase in the rate of production.

5. In spited of the formidable efforts to develop alternate sources of energy, wind, sun and the like, their contribution to our energy needs as substitutes remains very low, and is likely to remain so for many more years.

6. Almost every source of alternative energy is good to produce electricity.  They are, however, unsuitable to drive engines or machinery that drive an economy.  In this connection I will remind everyone that the vehicle industry is paving the way with battery-powered vehicles, though this effort is still in diapers.

7. The byproduct of the petroleum industry-the myriad of plastics has become a major material in durable goods that surround our daily lives.

With all the background reported here, I will continue in the next part of this series with the situation of supply and demand in the U.S.  The third and last part will be included also in the Commodities Funds Category and will focus on the energy sector.

I will then focus on the concept “PEAK OIL” that is interpreted as the highest output level of liquid Light Crude Oil.  The oil that is not from liquid sources is that produced from stones absorbed with it, or from other elements that are not liquid in nature.  Additional liquid sources of oil exist in practice but they are situated in places like the depths of the oceans;  particularly cold and especially hot areas all over the Earth and unstable areas from a political perspective.  Oil production from them is expensive to the point of economic inexpediency.

If there is interest, I will add a fourth installment analyzing Market Sector Funds that describe what is happening in the energy sector through the eyes of Technical Analysis.Popular Posts:

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Yes, I know that I wrote farewell to the upswing of the S&p 500 for the first time since this site has been up {mid December).  I know that I said there is a correction in the offing and that the Standard and Poor’s index of the 500 leading stocks traded on the Wall Street trading floor has seen a top.  I know analysts are grabbing all the positive fundamental data that they dare and declaring that Chicken Little was wrong.  I’d hate to disappoint you guys, but the correction has just started.

Check the Cart below.  It clearly shows the blue Gann Line I spoke of earlier that WAS the original trend line here being broken by the “Evening Star”.  On top of that we have the more accurate trend line that catches the daily lows of this short term trend being broken by the “Evening Star” as well.  After that the failure of the price bars (or candlesticks) to break the strong, historical resistance line at 1212, and then the unconvincing false break upwards yesterday which is proven to be false today by the Futures on the Index going down now, 9:03 a.m. Wall Street time, Tuesday April 27th, 2010 by about 0.5%.

This harsh sideways and the insistence on reaching the resistance and even momentarily seeming to break it is indicative of a major top.  This may be a top that comes as a reaction to previous waves and then it spells a very aggressive downwards spiral according to Elliot’s Waves Analytical Theory, or it may be just the beginning of the 61.8% Fibonacci Correction that I have been waiting for and as such will surely end and the long-term upwards trend will eventually continue though taking time to completely recover.

Published by MetaStock(www.equis.com)

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According to my calculations, the major resistance line 1182, of which I spoke earlier, was passed by the S&P 500 by like a freight train.   As shown in my new-styled charts below, both the weekly and the daily charts of the S&P 500 show an upswing of a 45 degree angle, or what is called a Gann Line, on them.  This is the optimal line for riding an upswing and the longest upward streaks are based upon such lines.  I will remind everyone that the S&P 500 is the world’s major stock market barometer on the world’s situation in general, and the world financial market situation in particular.  Still, this is NOT the same trend started in March, 2009;  nor is it a medium range trend.  It is still only a month and a half or so old and it still remains to be seen if, for example, the 61.8% fibonacci line will be broken, as it is a major resistance and a place where many corrections, or temporary downturns,  seem to start.

This is the way the weekly Chart looks:

This is the way the daily Chart looks:

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Here it is.  A lot of you wanted to know about how the method I wrote in my Advanced Tutorial on the OBV-EMA 3 trading method worked on the S&P 500.  Well, it doesn’t.  The S&P 500 is a true index and as such has NO Volumes on it and therefore no ON BALANCED VOLUME or OBV.  However, to circumvent this problem, I have here used the S&P 500 large-cap futures, the SP, and the continuous version offered by eSignal that takes care of the seasonal endings of futures in general.  Below you have the result and it is indeed bullish, though not to a strong extent.  On the short term the MOM and RSI seem to be high and maybe ready for a respite.   But I do believe that the short sideways that may be will be very short and the buyers will be back after a relatively short time no doubt.  This means for the world that a wait and see attitude is to be taken about financial considerations in general and the world’s stock markets in particular.

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On this new-style chart you can see clearly the wonderful renaissance we’ve had over the past two months (as a whole), going from January’s high, the highest since the New Great Depression began in 2008.  Down to the January low and rebounding, as I knew we would, to a new high in March, and just recently having 6 out of the last 9 upwards green candles and 4 of the last 5  candles going up also.  I t shows a strengthening in the upwards movement and backs up my earlier conclusions that we are in a recovery phase with little chance of seeing a new bottom.

The long rend line used showing the remarkable 2 months we just had is a Gann line that shows a symmetry of 45 degrees on the incline when the X and Y axis meet the right criterion.  the Trend line after that is our current uptrend, not as strong and maybe not so long to stay as the last one.  It might be replaced by a sideways pattern of sorts or another angle of incline.  I really can just picture it going upwards soon, as there are a few good reasons for that:  lack of major resistance, strong long-term chart with a recently started monthly trend.

.

This is the way the Chart looks:

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From my experience as  a long-term trader, the more the investor’s concentration is on a smaller different number of investments the better.  When he picks from one of the available stocks, indices, commodities, currencies, bonds and options, he will recognize their behavior better and this will give him better profits and performance over the long haul.  Management of a number of different investments is a demanding job, time consuming and requires knowledge that is not found in most places.  It seems that 10 to 15 steady assets of the same or similar types that have high liquidity and are similar in behavior can be taken, though solid as well as more risky investments should be considered, each according to his own emotional level of tolerance (more risk is for the stout of heart, I always say).

The choice of trading tools, and the platform of analysis is a thing which may make the difference between profit and loss.  I can’t point out specific systems, they are so many, but the important thing to tell is that intimate acquaintance with the tools is vital, in order to abstain from pointed mistakes, and in order to understand their performance and execution methods.  In addition to this you have to test properly expenses in connection to every tool.  That is because at times this is a critical element as in the example concerning the commissions on purchases or execution of options or futures contracts.

Investing is a profession, and like every profession demands knowledge.  Learning how to invest is more successful when there is curiosity and interest.  It is difficult to manage without understanding the background to what is happening in the market and, for the Technical Analyst,  a grasp of the tools on the analysts tool belt.  There are in the hands of the investor today, among others, books, newspapers, internet and economic channels.  All of these must be part of the investors’ aids to determine the positions that he will take with the help of the tools of Technical Analysis.Popular Posts:

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• China Res-Land: The Big Giant Goes Astray Views: (58787)
• A Market Forecast That Says ‘Take Cover’ Views: (58574)

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The Standard and Poor’s 500 index has long thought to have been the worlds’ leading indicator of where the markets may be headed, because it comprises the 500 leading world stocks and is representative in composition to the world’s market as a whole.  When it does an OKR close to  its upwards trend line, and what’s worse, Paris and Frankfurt do the same in the same day (Friday, 19 March), this is a bad sign for world financial markets as a whole.  This is not even mentioning the Switzerland, Madrid, Belgium and the Eurostoxx 50 indices are all down sharply, some crossing their trend line.   This is in addition the Hong-Kong, Japan, India and other Far-East Markets that somehow can’t get out of their sideways ruts.  It may be a while before the uptrend is back on track, and I do mean that the true direction is upwards and, to my belief, we are only in a temporary phase of correction that will surely end soon.  Please see the Monthly and Daily Charts below.

This is how the Charts look:

And check out the Monthly Chart:

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