NDX & SPX

As mentioned previously, NDX has hit its HNS right shoulder target at 2783 & reversed down. Now looking for support below its 200DMA around 2650. If that doesn’t hold then lower support is 2550 on the rising multi year trendline.

NDX26022013

SPX is showing a bearish shooting star on its monthly chart. First support is 1466, followed by  1415. Technically it looks setup to hit around 1415 before a much stronger reversal. Monthly chart isn’t overbought, so short term declines are expected.

SPX 260213

Having said all that, short term $TRIN & $NYMO are showing oversold signs, so be prepared for strong daily reversals along the way down.

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LVMH

Bearish rising wedge setup for LVMH has forming since early 2011. It also hasn’t been able to clear weekly RSI of 65. Short term resistance/support is 134.9/129. Mid term, 120 at 38.2% fib extension is good entry if the wedge breaks down. Lower mid term support is 111.

If it does clear 143 & stays above, next target is around 167, but Im currently on the bear camp. Maybe they should buy Michael Kors…

lvmh220213

Charts Remix

Gold: looks short term oversold & getting ready for a bounce. Its weekly RSI hasn’t been this low since Oct 2008. Today’s FOMC minutes may mention the POMO outlook, which can provide the catalyst.

This link shows the S&P500 vs $GLD & worth noticing is big divergence between them. Traders are saying economic recovery is here so we dump gold, but stock market is short term overbought so any big stock correction should send investors fleeing the opposite back to gold, especially since Fed POMOs remain.

Gold200213

S&P500: Target is about 1550, then a general pullback to its 50DMA & rising RSI & chart support trendline. I don’t think its possible to reach 1700 without a short term pullback of about 7%.

SPX 200213

CAC40: Looks just like the Italian MIB. Falling trendline intact.

CAC200213

Recent divergences

Recently, Spain, Italy & Germany’s markets have been diverging negatively compared to the US markets, & I think this is an early warning signal that the global stock rally may face strong headwinds soon. All 3 are below their Jan 2013 highs, yet the S&P500 is attempting to break out to multi-year highs. Europe has been on Draghi inspired OMT euphoria & its worrying for them to stall their advance now. Isn’t it also convenient for this to happen close to the March 2013 US sequester deadline?

One can follow the performances of them via EWI, EWP & EWG ETFs, which are currency neutral, tracking errors notwithstanding.

EWI & EWP‘s correlation with the S&P500 have been negative recently, & EWG slightly positive. I’m keeping them on my watchlist.

 

Update: here is Italy’s chart. It was rejected by its falling multi-year resistance & recently bounced off its support line from July 2012. What it goes on to do here is key, with the upcoming Italian presidential elections result the catalyst.

Italy140213

EZRA

Possible bullish breakout trade setup. Ascending triangle indicates accumulation. Mid term target resistance is about 1.60 once it clears 1.34. Short term support 1.14. Its multi-year falling trendline remains a key mid term obstacle so expect consolidation at about 1.60 before its next move.

EZRA060213

NDX

The traditional NDX leading indicator is near its moment of truth. A clean right shoulder may forming if NDX stalls around 2783-2793, just about 1% more to go from current levels. If it does stall & breaks down, right shoulder target is about -8% from current.

For a proper bull continuation, NDX should lead the way, break through 2800 & stay above.

Its correlation with SPX is quite high but recently has been diverging, so I’ll be watching for more signs.

NDX has been underperforming versus the SPX for the last 1 year, so if this is a bull continuation, it should still have lots more to go.

NDX10060213

CHKP trade update

I’m totally out of CHKP with a little profit due to my poor entry timing. Its technical pattern is bullish, but unfortunately the broader market is just to complacent for comfort. Too many topping signs means its thin ice trades now.

January’s performance does bode well for the rest of the year, so its time to pick out stocks worth riding on when the larger pullback occurs.