9 replies to this topic

[IYB]

It has been said that markets do not repeat but that they do rhyme from time to time, and this market is rhyming with June 2010 in a rather remarkable way. We've made reference to this before, but this rally looks just about exactly like the early June 2010 rally off that bottom, which subsequently peaked on Summer Solstice - which was June 21, 2010. Here is what that looked like:

http://stockcharts.com/c-sc/sc?s=$NYMO&p=D&st=2010-03-01&en=2010-07-01&i=p45962201791&a=219265881&r=1340242269177.png

Now let's look at the recent rally off of the recent early June 2012 low, as internals including the our Hourly Trend Trackers and Seven Sentinels have tracked nearly identicaly - and we look to have again peaked on Summer Solstice today:

http://stockcharts.com/c-sc/sc?s=$NYMO&p=D&yr=0&mn=5&dy=0&i=p92020892343&a=225433288&r=298.png

That's the pattern we "expect" as we watch this unfold. But as always, we trade off of signals, not expectations, and we will here as always. We've been showing day by day the overbought condition of this market and the maturing internals at SevenSentinels.com, as we've held {but been slowly scaling out of} our leveraged longs so long as the Trend Signals remained on Buy Mode. We continue to wait for the signal. One more look at SPX:VIX showing the extreme overbought today, rhyming with the extreme overbought on Summer Solstice 2010:

http://stockcharts.com/c-sc/sc?s=$SPX:$VIX&p=D&yr=0&mn=5&dy=0&i=p99437370105&a=246894100&r=889.png

http://stockcharts.com/c-sc/sc?s=$SPX:$VIX&p=D&st=2010-01-01&en=2010-07-01&i=p95320060062&a=260059102&r=3725.png

We are now down to 20% long 3X leveraged long UPRO, and will look to flatten the position when we get an HTT Sell. We will be shorting rallies for the active trading accounts once that signal comes.

Just as follow up- here is where we got our last HTT buy signal at 3 PM June 5, 2012 at 1284 SPX:

Got hourly buy signal (usually good for about 5 days + or -) at 3 PM today, fyi. Looking for a pop to the 13-day ema....

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=3&dy=0&i=p93864824559&a=230822744&r=786.png

Good trading all, Don

[arbman]

Interesting... Thank you very much Don, I think it is a consolidation... Maybe a top after one more spike, but I see what you are saying. Aloha!

[Islander]

Like the pattern fit. Thanks, but why does is come out this way? It is the pattern of a collasping economy I fear. Hope dies slowly and only after many tries to recover using the traditional pump priming. Longer run inflation becomes the issue: how much and when? PMs seem to beckon here at the next low. Islander

[andiron]

jive with what i am seeing as well...greece like 2010 was trigger in early May as well.. good job!

[Geomean]

Yesterday's daily index charts seemed more like a hammer than a hanging man. I overlooked on Monday that there was no intersection on any of the index charts (i.e. Monday's price bar did not intersect the range of the last Wednesday's bars) which would have indicated a potential completion of any upside patterns, which had been the concern. The absense of intersection [yesterday's range intersecting the range of three bars prior) continues to be the case. Upside threshholds on TD Propulsion™ calculated from the Oct lows have been exceeded on $INDU and $Compx. Price has paused at TD Propulsion™ upside threshholds caclulated from the Oct lows on $RUT and $INX and at prior TDST line on $DJT daily charts.. Also hit from the underside tine of some Andrew's pitchforks, where it paused. Not even close to any downside thrust threshholds.

[orange]

I think your analyses is perfect IYB, I just wonder if we will get one more marginal high before the sharp drop. Nonetheless, I'm short in my trading account.

[CRUISENAL]

Hello Don, You may want to also compare now to June 2000. Excellent posts! Alan

[gm_general]

When before have you been in so much cash when not one IT sentinel is on sell?

[arbman]

Congrats D, nice call... Market literally fell apart today after Fed's disappointment.

[Geomean]

Daily signals completed when they hit intersections and then accelerated down. Now $INDU and $INX are hitting (bouncing off?) downside TD Propulsion threshholds of 1326 and 12591.$Compx threshhold is @ 2846, $RUT @ 761. Double bottom anyone?