Monday- Little change in Exponential charts...

The story to day, is really no story yet. $Trin is rather low, more similar to a top then a bottom, although put/call ratios are more in the range of bottoms...Most indicators like RSI are showing increasingly oversold conditions, and geometrically we are still in the price zone where a bottom could form. Things are sort of inconclusive on the short time scale, but there's little doubt that we are still in an intermediate time frame downtrend, regardless of the details of what happens this week...

27-06-08 $NDX

Today was uninspiring for a bounce, price targets were met, but it would have worked better if the price targets would have been reached this coming Monday, when mutual funds tend to buy. Right now $trin is not low enough in my sense of things to still call this a bottom. Although the market has formed a spinning top candlestick which can often represent bottoms, I don't see put/call or particularly $trin at high enough levels to maintain the oversold condition associated with bottoms, the only strong point in favor of a rally is how deeply we have penetrated the Bollinger Bands...but we'll see Monday.

P.S. I think a more sure rally will coincide with a turn date of around 7/21/08, I still think that will come up as wave 1 of wave 3 in this decline...

A dramatic down day...

The scenario I outlined in the previous post is still possible, I see that the $SPX index is nearing it's support at 1275 (two previous bottoms around there) or so. That said, if we get a bounce in the next couple of days, one will have to be very nimble... this is possibly a crash scenario unfolding, so even a very short term bounce is a dangerous play here...

Basically I anticipated the price action on the $NDX reaching the Blue support line on Monday (that's how the chart below was plotted, with the low on Monday), when I composed that post earlier today. It's already about there, so a bounce could take place tomarrow, as the daily Bollinger bands have been fairly deeply penetrated....

A little situation for next early week (maybe)

Taking the drop from 6/5/08 to 6/12/08 as a possible "A" wave and 6/12 to 6/17 as a possible little "B" wave, you could project a small "C" wave ending at 1847.19 on the $NDX at the "A" = "C" point. I have extended the exponential charts to Monday, the 30th of June, to show what that would look like....Because the last day of a month and the first two days of a month have a historic bullish bias, and that the 1847 target happens to be the bottom of a Gap created on April 17th and 18th, and my Exponential chart shows it clearly hitting a major trendline (the downsloping heavy blue one), there is a lot of Justification for a bounce there. We'll wait and see...

P.S. Watch $TRIN and the Put/call ratios, if one or both are extremely high as we approach 1850, that's your signal....

Markets : 25_06_08

Markets managed a little rally today, based on Fed anxiety and release, and the rally began to fade as the day ended. Put/call ratios quite low, again, consistent with more down trend ahead...Note worthy was that the little dip and rally coincided perfectly with a .500 node on the $NDX, as you can see, however the real trend change more than likely should occur at a node of 1.000 .....

Tuesday: 24-06-08

Interesting day...In the first panel the $NDX bounces off of the one purple exponential trendline, and then in the second panel you can see it was stopped by colliding overhead with another trendline (which I've shown in the same color) Of course the overall direction of the market hasn't changed --- it's down.

War with Iran...coming soon..

Although this is outside of the purview of "the markets" I watch with sadness the multiple sources confirming a war with Iran is in the cards. There are reports (from Ron Paul) that Nancy Polosi had removed safeguards from a bill passed in '06 that would have required Congressional approval for any first strike against Iran. Meanwhile neo-conservative think tanks have already decided that the U.S. economy could survive a war with Iran even if oil spiked to $250 a barrel (These people don't care what happens to the economic fate of the U.S. or the world). One Neocon study even suggested bombing Iran's oilfields directly (sheer madness). The link is here:

http://latimesblogs.latimes.com/babylonbeyond/2008/06/iran-neocons-sa.html

George Carlin (RIP George, we'll miss you) said years ago the United States was "owned" by an elite. and the two parties were a sham, a phony. I think he was 100% correct. That elite is now telling us what it will do, and we have nothing to say about it. The American people are probably going to wake up to a very different reality then what they are used to. I already have, and it is highly disturbing...

P.S. On this next link is a video of Bill Kristol (one of Bush's former cabinet members, if you didn't know that) suggesting that Bush will start the war if Obama seems likely to be elected. Sounds like a general threat of some kind, and ties in with many other things I have read that I don't have space for here...

http://thinkprogress.org/2008/06/22/kristol-bush-iran/

P.P.S. What makes things so bad is that Russia and China and other countries have told us "Hand Off!" regarding Iran. I'm not saying Russia and China are wonderful, I'm only saying thet the elements are there for a real bad day for all of us...

Monday: 6_23_08

Put/call ratios here are more similar to a top then a bottom, even though there is some support at this level. So I expect the indexes to break down through these..

Friday's $NDX and $SPX action...

I suspect we do have a crash scenerio here, volume increased on the down day Friday. We are now real close to .500 node(on the $NDX) and stochastics are rolling over...

and $SPX..little of note here...

Back up to resistance....

Market rises back to trendline resistance...also .500 node is just ahead (technically tuesday, but it could fail at any time from now until then...) The high of today is what is plotted for today's point.

Market has a long drop in front of it....

Looking ahead there is a possibility of another two or three day rally next week, but overall, the big dates I see ahead are 7/21/08 which I have as a reasonable turn date with some kind of bounce of a few weeks, and the 1.000 nodes for all recent swings culminate around the last week of October...That is where the current decline will probably find a large intermediate bottom giving a reasonable rally into early 2009....

And the $SPX...

Continuing on down...

After we fall beneath the violet line we will switch views..

Bouncing off resistance (so far)

Compare with yesterday's chart. I have plotted today's high and closing prices. It looks like resistance has held although another down day would be good for confirmation.

Now at major trendline resistance...

My take is still that this is a bear market rally...tomarrow should tell the tale...

Compare this to the chart from Friday, in the previous post. We're much closer to the major trend lines...resistance should be higher tomarrow...

$indexes bounce off of support..will be halted by resistance Monday

The smaller curved (almost vertical) trendlines are generated by the previous swing ( in this case the March to June rally). These are providing resistance right now, and more on Monday. Of course, above that, is the thick downsloping Blue trendline representing the resistance caused by the entire October to March decline, which is even stronger...

More unsettling news from the oil front...

http://www.fcnp.com/news_stories/the_peak_oil_crisis_the_summer_ahead_20080612.html

This is grim. It looks like the world is living off of stockpiles, with insufficient crude being produced to maintain supply. Sounds like a major price spike is coming as soon as these little puddles of oil are used up and we are faced with the core reduced supply. $10 a gallon gasoline anyone? Maybe in a year, or a few months?

Read: The Peak Oil Crisis: The Summer Ahead

Possible path for $SPX...

Similar to the plot in the previous post...Notice that 7/21/08 is a 1.00 node on the $SPX while it is a nice even .500 node on the $NDX (previous post and chart). That produces high confidence turn dates. The same caveats about the predicted final prices being perhaps a little high apply here also...In any event, the $SPX calculates out to a point considerably lower then the March 17 bottom (unlike the $NDX), consistent with it being a weaker index then the $NDX because of it's exposure to banks and other financials stocks.

Possible path of $NDX...

Here you can see I have labelled what I regard as the two most likely trendlines defining the path of the $NDX on down. Keep in mind price action likes to punch slightly past the trendline that turns it before it reverses, so these price points could actually be a bit high... Notice that price-wise these two targets put the next bottom in the vicinity of where the March-June rally started. I can also say that the current drop looks steeper then my calculated trendlines (that I have marked with red arrows) and if the price action doesn't eventually slow down and merge with one of those two lines, then clearly the end of wave 1 of 3 could be lower than I have indicated...

Keep in mind that we are now in Wave 3...

Having penetrated the daily Bollinger Bands yesterday, a bounce was expected. But Bounces should be played now as places to sell or sell short. This will be the most intense wave, considerable more negative for the markets then the October to March drop(Wave 1).

Get ready for Peak Oil...

http://afp.google.com/article/ALeqM5i6mVEiZ6_EKX-nmld62UkJte6khw

Probably, we should all stock up on canned goods. Across the world, truck drivers are striking as they demand financial assistance to maintain their position as the major form of goods transfer. Prices for diesel are much higher in most of those places then in the U.S., in part because we still produce 25% or so of our own fuel from the Geology of North America. However, we should see what's happening in other countries as a warning as to what will probably start happening here in the not to distant future, as our prices will necessarily catch up to the level the rest of the world is seeing....and you know, it may be less than two years away.

Sharp down day....

This is looking more like a crash shaping up...I have an intersection of nodes around 7/21/08 or 7/22/08...Makes me wonder if we crash for the next 5 weeks...it's possible...

$SPX looks poised for a small bounce...

$SPX is sitting on trendline, and approaching a local .500 node, so a bounce is possible here, but this does not mean the Bear is in any significant trouble...

Todays little rally on the $NDX...

Not much to get excited about..you can see the convergence of trendlines above the price action in black that helped define the top on the 5th of June....

Nasdaq is trying to do a feeble rally..

$TRIN is already fairly low so I doubt it will get far...

Compare this chart of an internet stock with the $SPX chart in the previous post....

Not identical, but a run up to a big double top and then continuous erosion...

Fascinated by 2021....

Need a down day to confirm...

Using a AB=CD Fibonacci method, one can project a top of about 2065 on the $NDX. As shown here, by one set of pivots we have a .500 node and are striking a trendline. This is a strong top warning (again) and needs to finish it's probable Fib target and decline with one hard down day as confirmation of the top...This recent period has had three top setups, which did come to pass...The geometry has been very crowded, with multiple overlapping trendlines. Tomarrow is the last day before we pass a Bradley turn date (on Saturday) so we can take that as added evidence that the FINAL top to this Nasdaq rally is close...

Fibonacci price calculator added...

Anyone who would like to use this spreadsheet, email me and I will add you to the Google Docs list to make it active for you...

Regards,
Mark L.

P.S. Just by looking, you can see what I've done, and probably reconstruct this for yourself..pretty useful...especially near Bollinger Bands..(I prefer weekly here)

Intermedate trendlines still shows large overhead resistance

Also I would add, the day after tomarrow is a Bradley date....

Patience Bears...

Indicator divergences still favor the bears...