Two views of the $NDX and one of the $SPX...

Note the $NDX chart (middle chart) with price action sitting on a trendline, and at a .500 node...Could be a bounce in here somewhere, although it won't negate the Bear market...

As always, click on the charts to enlarge them...

What hath the Republicans wrought?

The rise of Sarah Palin, in my view, is a rogue event, a game changer. She is tapping into a reservoir of angst among some sections of our society, and though her rise was engineered by Karl Rove, it may be beyond their capabilities to control the outcome.

This is good for neither the Republicans nor the Democrats. YouTube has a video of her addressing the Alaskan Independence Party, which advocates that Alaska should secede from the United States. This is reminiscent of the Confederacy and the Old South, and has shades to some degree of the candidacy of George Wallace, 60 years ago, but probably with less overt racism.

The great unseen underclass of the United States has been courted by both parties, but recently has affiliated most strongly with the Republicans. "Family Values" has become a coded phrase that means far more then merely supporting families. It is a statement of a group that is pushing back against modernism in a variety of forms, and a statement of anger at being "left behind" economically by the forces of change wrought by technology.

Originally, most of the people we are speaking of were aligned with the Democratic party, but that was a long time ago..The Republicans welcomed this part of the electorate into itself when the Democrats championed civil rights under Kennedy and Johnson in the 1960's and 70's. Now the party is being swallowed whole by this long-ago ingested organic force, with consequences no-one can foresee....

It's predictable that an economy in crisis would produce populist candidates, but this could be a particularly toxic brew. As the economy continues to worsen, any failure by the conventional parties to right things will probably feed more candidates such as this one, which abhor complexity and want things reduced to extreme simplicity. Needless to say, truth is often complex, and a ruthless drive for simplicity is usually associated with tyranny.

As our population is relatively unschooled and undisciplined, it will make this temptation and the danger of it all of the greater.

______________________________________________________________________________________

I've been alerted there's another blogger, using more colorful language (and making more assumptions then I would), but if you want to raise your blood pressure a bit, visit this site:

http://elainemeinelsupkis.typepad.com/war_and_peace/2008/09/triumph-of-the.html

Warning: She uses some rough labels...

The dam finally broke on the $SPX...

After a few days of non-committal chop, the markets broke down with a vengeance today. Whether this was purely technical, based on fundamentals or from the fiery start of a new round in the culture wars at the Republican convention, is hard to say.

Notice the vicinity of the 1.00 node (upper chart) and pulling away from the blue descending trendline (lower chart) that has limited up moves so far...

$NDX in definite downtrend, $SPX is thinking about it...

The $SPX looks like it might be making a rounded top just under the thick blue declining trendline. The $NDX is pretty clearly going down, (which started in the approximate time frame where the blue and violet lines crossed, as predicted) but in a volatile fashion.

Check out the Financial Sense Newshour from today, August 30, 2008

Jim Kunstler speaks on the 2nd half of their Internet radio show. If you've never heard him before you should listen in...
The link is :

http://www.financialsense.com/fsn/main.html


If you have listened to folks on the Financial Sense website before, you know that Climate Change and Peak Oil are game changers for the world and threaten the very foundations of our civilization,

I encourage you to join one of the two organizations whose links I provide here:

http://www.wecansolveit.org/

http://www.pickensplan.com/

The top one is affiliated loosely with Al Gore
and the second one is (Obviously) T. Boone Pickens's attempt at solving the energy/climate crisis....

I have signed up personally with both.

For those of you who have missed it, please check out this 10 year oil price chart and explanation, it provides the backdrop for today's posting, and the references above:

http://marketmathematics.blogspot.com/2008/08/how-i-see-oil-markets-long-term.html#links

As always, click on the charts to see them better (make them bigger)

One thing holding the markets up...

One thing that may be supporting the markets is this wedge structure, which could eventually be Bullish on some time frame in the future, hard as that is to understand (even by me!)

S-L-O-W Market...

Not sure what's holding this market up..most of my breadth indicators are in agreement with the exponential charts that the rally is over...It might take Gustav and a rise in oil prices to start something really moving...

Watch for Gustav...

Is it my imagination, or does Gustav sound vaguely Russian? In any event, Gustav in the Gulf of Mexico next week could start the fireworks to raise oil prices, and sink everything else. In my view the equities markets are hanging by a thread...

Energy gathers momentum while major indexes loose steam..

I don't know how many noticed, but energy is doing fairly well now, even as the main indexes are showing signs of strain. In the coming years probably the only stocks to do well, will either be firms producing energy, or managing it or conserving it..

$NDX is definitely in decline...Thursday A.M.

Hard to argue with this chart. Although the crossover is technically tomarrow, I think the $NDX has already made it's decision. Looking at the chart, the decline has started pretty close to the crossover, it takes fine eyes to see much difference, and it's now fallen clearly below the ascending curved support lines (thin blue and thin brown on this chart) so it looks like the $NDX is leading the charge downward..and it's probably a long way down from here..

Click on the chart to magnify...

Flip a coin...

The $SPX is now right on the trendlines I pointed out yesterday (compare todays chart with yesterday's), so there could be some support there, and the $NDX has fallen back on top of one of it's major trendlines, could be support there as well. But $Trin has actually gotten LESS bearish even as $CPC rises. By eye, on another $NDX chart it "looks" like the big trendline cross I've been talking about has already happened, although mathematically it's not due 'till Friday. So truthfully I can't say what will happen tomarrow, although we all know that a big decline is getting ready to happen at some point, or may, in fact, already have started. But is it really now? Not sure. All I can say is we're in the window for it..

As always, remember to click on the charts to "blow them up" so you can see them better...

Bobbing around the top

Recently, declines have met the smaller ascending curved trendlines and then bounced, in order to make another run higher, as shown by the arrows. Will it do it again to give us a final top, near the end of the week, or is it already over, i.e. will a failure take prices below the ascending curved trendlines?

I noticed $TRIN got rather high today, which argues, I believe, for another bounce...

$NDX and $NASI and the $SPX

Little changed from yesterday, I have added a slightly different view of the $SPX (the one from yesterday is still valid, it also shows an overhanging blue trendline), showing it's proximity to a 1.00 node even as the $NDX approaches a Crossover of it's main trendlines within 1 trading day of the $SPX hitting that 1.00 node.....

Notice I have updated the $NASI chart. The green up bars have caught up with the upper down-sloping purple line, and by this criteria, the top could happen at any time, although I'm betting it's towards the 22nd through 26th, as I have said...

One other possible scenario is that we have reached a top Friday, spend some time dropping away from the upper daily Bollinger Band (remember, a bunch of Fibonacci ratios line up on Monday, the 18th), and spend the end of this coming week or first part of the following week retesting the same level at the upper Bollinger Band...before we start the autumn decline...

$NDX and $SPX on 8-14-08

$NDX is poking it's head above the strong blue resistance line..along with daily indicators showing a rather overbought condition...This doesn't look sustainable.

For the $SPX the 11th of August did indeed turn out to be a short term top, as the numbers seemed to indicate.

Watching oil prices...

One thing to watch in the equity markets is the oil price. Here you can see the oil price descending close to a 1 year trendline. A bounce off of this line, though a short term thing, could psychologically impact the stock markets in a negative way. I am wondering if it bounces on or around the 25th....

Another piece of evidence...the breadth indicator $NASI...

Count in your mind how many green bars (after the current short one extends as this week progresses) will get to the top down-sloping purple line. I get one, personally. So I can see the rest of this week and another week to the top is a reasonable estimate...So the 25th, (+ or - 1 trading day) doesn't seem to far out of line...

Today's charts...

We may have hit a short term top today..certainly the candlestick for the $NDX (in particular) was consistent with that. Also put/call and $trin are consistent with a minor top. As seen on the $NDX chart, we reached up today and hit the blue trendline (only on that index), and backed off immediately...

Now what?

One scenario is we slide until the 18th, and then climb back up to the 25th or so (and make the final top).

That is only my speculation, don't become to strongly attached to it. Tomorrow is going to tell us a lot...

Some convergence between August 22-26..

Digging deeper into the $SPX and $NDX charts I posted earlier, there is a major node (1.0) on the $SPX, and a major Crossover on the $NDX, both happen in the range of 8/22/08 (Friday) through 8/26/08 (Tuesday). This could be the final top before all hell breaks loose...and the bear comes back in force...Keep these dates in mind...

$NDX and $SPX charts

Note the heavy blue downsloping trendline(s), these are tough resistance and there's some chance the rally could stop at these next week sometime...

Also on the $NDX chart you can see the purple and blue heavy trendlines are near crossing...this sometimes also portends a trend change and could stop the rally....particularily if the price action strikes the heavy blue line at the same time the purple line hits it as well (although the day of their crossing may have this effect without in fact being touched by price) ...in any event, watch $Trin and $CPC values as the blue trendline is hit and slightly penetrated..that should tell us if these lines will be the top...

P.S. the Crossover occurs around the 22nd of August..

$NDX and $SPX charts

As you can see the markets have done what I said they would do, which is chop around without much progress...I haven't posted these charts for a few days because they're so boring right now...That will change however...

Thought I would add that we will lose steam on this rally, but it's probably a couple of weeks away. Not that it has that much steam now, mind you...

Oil stocks recovering...

After a false start a few days ago, the oils seem to be moving up now...The breadth indicator for the oils, $BPENER made a new low after yesterday's close, deep in oversold territory, even as the oils firmed up after the Fed non-announcement in the afternoon. There's still a chance for a pullback, but as of 9:30 CST, things look stronger....

How I see the Oil Markets long term...

Most of the corrections in the oil markets have been 50% or so, and rested on old tops for support...Thus this simple projection...Oil production didn't really peak and start falling in 1999, but that's the point where demand started to outrun supply, which is an early warning of flattening oil production...

The anticipated bottom in the price of crude on this chart historically coincided with a gasoline price in the range of $2.15 to $2.50 a gallon...I don't know and even doubt gasoline will fall that far, but we'll see....Either way, the price break will just be the calm before a much larger storm...

Energy had rough ride today...

Like you all didn't notice that....Anyway the Bullish percent index which roared from oversold to "buy" territory last week (from below 20 at the bottom to over 30 is the general rule for that on P&F charts), collapsed today with prices back to it's starting point. The good news is the energy markets are still oversold. The bad news is that it has undone it's buy signal. Generally speaking one wouldn't expect this index to stay oversold real long without a more sustainable rally. Truth is though, it _could_ go down a bit more before it does so...Use your judgement here...

Another factor is the tropical storm Edouard, moving through the oil patch for the next couple of days...

P.S. I have added a chart from BigCharts showing one of their little known volatility indicators applied against Conoco Phillips, as a representative oil stock, and you can see the "slow" volatility indicator is showing readings consistent with a bottom...

I took a position in the energy sector today

Will be watching 8/11 amd 8/18 as potential short term tops..

Good time for a short term energy trade..

While we are waiting for the general markets to "do something", a good short term trade is setting up on oil stocks. $BPENER has risen off of it's normal "very low" level, and several energy stocks made good gains today, signalling that a short to intermediate term bottom has been made. Calculations on these energy patterns gives an 8/11 or 8/12 ending date for the pattern, just like the general market, so I wouldn't stay in on the long side any longer then that, just to be on the safe side..

Day traders market..

For those of us who are not day traders this is one boring market... I expect little of importance to happen until the 11th of August or so...

The next important dates are 8/11/08 and 8/18/08...

Many nodes landing on 8/11/08, and many Fibonacci ratios aligning on 8/18/08...Could be a double top...

Normal tolerance is + or - one trading day.....

Market still staying within the downwash fan of regression of the top of early June

Note that $NDX topped just past the .500 node, although I thought that.500 point would be a bottom, if you look close it was...sorta...We'll see what happens next...

The chart of $NASI is showing recovery from a deep bottom, but I don't expect a lot of vertical progress by the price action on the indexes as the Breadth indicators work off their oversold condition...

Markets are in an odd state..

Currently we have $trin and $CPC closer to what you see at tops, although many breadth indicators are oversold. I originally conceived the 7/21/08 date as a bottom, and I think perhaps the manipulation of the naked shorting rule started the rally a little early. That said, I am out of this market for the time being. I will re-short once I'm sure this market knows which way it's going...and obviously after it has worked off it's oversold condition...

Today is the .500 node and 1.000 node on $SPX....

So, although the charts changed little today, something should happen tomarrow...Volume has been dying on this little rally, so it has to do something soon...

Still close to .500 node..

Waiting to see what happens next, market looks like it is doing an A-B-C correction up...

$64,000 question, what happens on the 21'st?

There was quit a bit of overlap of many math nodes on the 21st, which is Monday. I thought that would be a bottom, but since the market rallied before we hit that time target, I'm wondering if that date could be a top...One thing that doesn't make sense with that idea is that many breadth indicators are at levels associated with major lows, so another down leg from here seems difficult unless the breadth indicators go beyond ordinary "oversold" readings. So the .500 node is still technically 2 trading days ahead, on the 21st. So what will happen there? We'll find out soon...

today's action

Here is the bounce on the $NDX and $SPX, near a 1.000 and .500 node respectively..

Heck, going long here..

It's looks like the crossover pictured yesterday has triggered the rally..so it looks like we won't get to exactly the .500 node after all..

edging slowly downward...

Getting closer to .500 node (bottom chart) also at major crossover (top chart). I think the .500 node will win, however, bounce delayed until we get closer to .500..

Note also the green downsloping line in the lower chart, that could provide resistance, but price action should still penetrate it before it can bounce from it...

Not a bottom yet, I don't think...

$trin is rather low at the moment and put/call is not at levels seen at bottoms...probably not there yet...Timing still suggests we are at least a couple of days away...

A down day...approaching .500 node

Just the close is shown..

How Will You Ride the Slide? A great statement about oil use....

http://www.youtube.com/watch?v=Ulxe1ie-vEY

If you like it, use the link below and share it!

Wild day...still sliding down...

Crawling inexorably towards the .500 exponent and sliding down...Both $trin and $CPC are not yet at bottoming levels...so more down is coming...

Conventional trendline study.

Using the conventional channel on the $NDX, I took a linear and logarithmic regression of the points on the Stockcharts snapshot of the $NDX. The days I used have a vertical blue dash under them.

Using the three (what I regard as) potential turn dates, the lower price channel targets are as follows: (Linear regression, then Log regression)

7/17/08 1716.7 1723.3
7/18/08 1710.8 1717.9
7/21/08 1693.0 1701.8

This is probably the range of prices the bottom will be found in...

I would also add that the weekly Bollinger Bands, next week, should also give us a clue as to the price level of the bottom...

An inside day...

Charts haven't changed much today...still expecting one more decline into the end of next week or into Monday of the following week...Mathematical nodes point to the 21st, as a bottom, and Fibonacci work points to maybe 1 day earlier. So we will be on a bottom watch from next Thursday through Monday...

Mark L.

July 9th, 2008 Continuing on down....

No surprises here...just continuing down....

Nice bear market rally today..should fail..

We are still looking for a more major bottom in about 9 to 10 days...

07-07-08, small bounce is trying to happen, but still a bear market...

Some sizzle after the fourth, that's normal, but bucking the tide...

Today's low and close are plotted...

July 3rd, 2008 Another day in a Bear market

Not much new, continuing down...

and back down again...

Resuming the downtrend...Bears will make quite a bit of money here...

Notice the Stockcharts weekly print of $NASI ($NDX summation index) I give the red bars about 3 weeks to get down to the lower purple trendline. That's when my 7/21/08 bounce date is due. Looks about right, as far as I can tell....

Rally finally happens, belatedly..

A roller coaster today, the rally started, faded completely away and then was reborn. Many will think this is "the bottom". It isn't. Probably this lasts 1 or 2 more days at best, then back down we go...

Note the approaching .500 node on the lower right, that represents 07/21/08. I think that will produce a bigger bounce then this will be, although it will not be the end of the downtrend either...