Point & Figure Update

Here’s a good tip for you: Do not ever visit Paris in the winter. It’s cold, it’s gray, it’s rainy. Everyone is in a crappy mood, and most above all pretty much every other person you run into carries the hanta virus or some other nasty seasonal malade. Which they are happy to pass on to you I might add as misery apparently loves company. All that cheek kissing they practice over here is nothing but a scheme to pass on your recently acquired kudos to another hapless victim.

Not to harp on the French by the way – the above applies to pretty much most of of Northern Europe. In fact I love France in general but I never much cared about Paris – and you can double that sentiment for Paris in the winter. Suffice to say I didn’t have much of a choice here (trust me I was trying hard to get out of this one) and I’ll probably pay for my failure with a week of fighting the flu or at least a nasty cold. If I manage to survive this trip without coughing up blood on Tuesday it should be recognized as a bonafide miracle by the catholic church.

I promised you a post on Monday but then realized that I won’t have any Internet access as I’m checking out of my hotel tomorrow morning. So I decided to instead put up a quick point & figure update – it won’t be extensive by any measure as I’m not feeling so great and very much hope to catch up on some much needed sleep. Thus I ask you to forgive me if I ‘call this one in’ 😉

You may recall that our P&F chart has been pointing toward a preliminary PO of 1550 since late December. That apparently wasn’t bullish enough as we now have a bullish PO of 1615. Call me a skeptic but let’s not forget that this is a LT chart. Even if we wind up touching new SPX highs then we won’t get there in one big swoop. Not with a VIX reading near the 13 mark – nothing is impossible but I wouldn’t bet my house on it. More likely we’ll see a wash out followed by continuation.

Either way the P&F is showing us pretty significant resistance at 1470 – a push above 1475 would probably lead to acceleration and a continuation of the short squeeze – low VIX readings notwithstanding. This chart (and the lack of reversal signals) are the reasons I have been pretty hesitant about calling a top here.

Here’s the regular LT panel duo – as you can see there’s really nothing blocking continuation higher – no long term SMAs or some sort of net-line. The one technical hurdle I see here is the same as on the P&F – the 1470 price level. So let’s not over think this and stick with that.

A few weeks ago I sported this AAPL P&F chart and announced that wherever this one goes probably goes the rest of the market. Despite the rather ambivalent gyrations as of late (e.g. no participation in the current rally) I would maintain that the one key level on this chart is the 500 mark. As long as AAPL manages to remain above its magic 500 mark equities should be safe from a major correction. If we see a drop below then I would consider it our canary in the coal mine and start looking at medium to long term short setups in equities.
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No change on the crude P&F panel – still donning its 99 PO and I have little doubt we get there especially if it manages to cross a key inflection point looming right above:

The long term interval chart is showing us a double whammy of upside resistance. It may take some doing but once above there’s literally nothing blocking the way. It’s possible we turn here of course and some speculative shorts with a stop above 95.1 may be worth a shot. If it doesn’t hold then look forward to even higher gas prices in 2013. Not what I put on my Christmas list, that’s for sure.

Gold – still looking bearish, despite all the recent noise. I would remain MT/LT short here with a stop above 1670, which is where a breach may put the bears on notice.

The Euro as represented by the FXE – looking very bullish right now. Not only did this one register an ascending triple top break out – once above 1.33 it will also breach a diagonal resistance line. Any remaning prospects for a more favorable EUR/USD exchange rate will find a shallow grave past that point.

Here’s are the LT interval panels – my only hope (as a frequent visitor of European ATMs) are the weekly and monthly SMAs which currently seem to correlate near 1.343. Beyond that there’s nothing but air looming above. Which may probably the point where I should start charging you guys in Euros 😉

Alright, off to a quick dinner and then it’s right into bed. Perhaps you could keep your fingers crossed that the Mole may be spared the great French pestilence of 2013. See you all on Tuesday once I’m back in cozy (and comparatively warm) Valencia.

Cheers,