Figure Pointing

This will be my last long term update for this year and as such let’s revisit some of our trusted point & figure charts. I must say they all have been rather lovely companions all through 2012 and I expect to keep this tradition alive in the coming year as well. Despite recent gyrations the medium to long term picture continues to be positive on the equities side:

For several weeks now our bullish price objective has been 1510 and I think as long as that diagonal support line on the P&F holds up the prospect of new highs remains in play. A drop through 1420 may trigger a shake out and would probably reverse the bullish price objective. This leaves us with a 30 handle range (1420 – 1450) between our long and short trigger. Once again we must appreciate how our P&F chart remains a concise and simple guide through the fiscal cliff pandemonium.

Nevertheless the VIX:VXO ratio spiked above its 2.0 Bollinger on Friday. So it’s possible we may see another retest of the 100-day SMA on the SPX (conveniently located at 1419.15 – near our P&F downside trigger). If it happens then we should see things slide Monday or Wednesday. Anything beyond that and I’ll strike it up to pre-X-Mas anomaly. Admittedly it’s really tough to make educated assessments once participation starts to diminish in mid December.

FXY – a few weeks ago that bearish price objective of 114 and change seemed almost outlandish. But we’re almost there now and I would recommend that you start scaling out of any short positions. If I see a reason to get long I will report it here of course.

AAPL – also remaining stubborn about that 445 bearish price objective. As you can see there is a diagonal resistance line it has been failing thus far and a drop through the 505 mark ought to accelerate things to the downside.

The FXE switched to a bullish PO of 139.5 (scary) on December 14th when it painted a double top breakout. As you can imagine I am not pleased at all as I live in Spain now and this is literally going to crush my exchange rate.

Crude has been boxed in for almost two months now. Which of course is an opportunity to become active once we either breach 86 or 90 – a mere four handle range. The bullish price objective of 99 is still in play as well, so set your clocks!

Gold now literally facing the abyss as this diagonal support line is what stands in the way of its bearish price objective of 1580. A drop below 1640 should get us there. Gold has been on our death watch for weeks now but the bearish triangle breakdown it triggered on the 18th took things to the next level.

Silver is looking similarly cranky right now. It triggered a descending triple bottom breakdown last Thursday and if it plunges through the psychologically important 30 mark then I think 26.5 is is pretty much baked in. The precious metals bugs don’t seem to get a break these days but that’s a good thing. I told you guys months ago that gold/silver were going exponential and the pain incurred since then has shaken out many of the weak hands. Once we approach the horizontal support lines on both gold and silver then I think we may get a nifty buying opportunity to slip into some comfy longs.

Cheers,

This entry was posted on Sunday, December 23rd, 2012 at 9:41 am. Both comments and pings are currently closed.



  • captainboom

    Mole, gentle reminder for a Daily Zero update while you are still awake.

  • captainboom

    AAPL has a Monthly NLSL at 570.  Not sure how well those work on that time scale, but the weekly NLSL that was broken the week of Oct 1 foretold quite the drop.  There was a monthly NLBL broken to the upside in April ’09 that resulted in the run to 700.  AAPL may well be in a world of hurt if it can’t close the month above 570.

  • AmazingLarry

    LKGB or another Bear-BQ on the 30-yr (/ZB)?

    M. Armstrong has been hinting at a Japan turning point in 2013. Maybe this is it?

    Meanwhile in Japanese equities (EWJ)….

  • http://evilspeculator.com molecool

    Wish granted :0)

  • http://evilspeculator.com molecool

    Larry – don’t get drawn into lofty predictions. Armstrong is very opinionated and although I respect his work I would not want to trade it.

  • http://evilspeculator.com molecool

    I didn’t want to include this in the post. But the ISEE equities painted its second highest spike this year on 12/17:

    http://content.screencast.com/users/evilspeculator/folders/Jing/media/44d04d30-8477-4dbc-9c55-d75eb3eedd70/00006135.png

    I would think there would have been a response by now – perhaps that little flash drop on Thursday was it. Which is why I’m not putting too much stock into this – plus it’s happening during the holidays.

  • newbfxtrader

    Japan is certainly getting closer to its endgame. Take a look at long term Japanese Yen chart. Definitely looks bearish.

  • AmazingLarry

    Agreed 100%. I look at it as interesting from a macro level and pretty much leave it as that like many others. Just prefer to show the data/charts rather than mentally masturbate on it. My scope doesn’t include P&F work yet, so I appreciate you going over them. I just see some correlations to what Armstrong’s computer spits out. That’s it. Not taking trades.

  • newbfxtrader
  • Skynard

    AUDJPY – Monthly, allot of resistance @ that 90 level:)

  • Skynard

    ES – Monthly, similar picture tagging the 25 BB on the monthly. Needless to say, we need to keep plenty ammo for the next move. Have been building some shorts and tightening longs.

  • newbfxtrader

    Yup. After pullback we go to 103 next year!

  • captainboom

    Muchas gracias.

  • Skynard

    Will go away this year again in MAY:)

  • Skynard

    Dollar brewing something:)

  • newbfxtrader

    A bit early to say but the double top breakout mole outlined is in danger.

  • Skynard

    On the Dollar?

  • newbfxtrader

    eur/usd check out a daily chart. the breakout is close to being a fake breakout in which case it will be extremely bearish.

  • Skynard

    Gotcha:) Div there!

  • newbfxtrader

    Inverse head and shoulders. But looking shaky now.

  • newbfxtrader

    Most of my usd longs are vs kiwi and aussie as per my COT play. But if Eur/Usd breaks back down I will add eur to my list of shorts.

  • Skynard

    Nice trades my friend:)

  • Skynard

    Can hardly wait, think LBS spot will be @ 356:)

  • newbfxtrader

    I hope so. Gotta be careful. Commodities have been crazy on either side.

  • Skynard

    Lol, that sucka moved out last week like their was no return:)

  • Skynard

    Daily

  • http://dartht.blogspot.com/ Evil_Gerb

    It’s T-time on the AussieYen.

    http://s14.postimage.org/v0enslr6n/temp1.png

    -Gerb

  • http://evilspeculator.com molecool

    Did anyone see the ISEE chart I posted below? Funny I can’t get a response on my own blog? ;-)

  • newbfxtrader

    Yeah that was on the 17th and the market kept ramping up afterwards.

  • Skynard

    Long 6J @ 56

  • newbfxtrader

    yen is on suicide watch…

  • Skynard

    Just for a scalp, that is all. Tagged the hourly 25 lower BB and the daily is diverging:)

  • Skynard

    /ES sitting on hourly NLSL

  • captainboom

    It’s because we don’t recognize you now, since your avatar disappeared.

  • Skynard

    Ya think allot of folks were expecting a Christmas Rally?:)

  • Skynard

    If that NR7 is lost, reversing this Mofo:)

  • Joe_Jones

    Hohoho! ;-) You nailed it Gerb!

  • Joe_Jones

    I had a good chuckle last week when I saw the intra-day data on 12/17. Some things will never change. 

  • itcomesupinwaves

     Is this based on a certain number of cycles?

  • http://evilspeculator.com molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨ 
    ¨°º¤ø„¸F R E S H „ø¤º°¨ 
    ¸„ø¤º°¨ M E A T“°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸





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