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Trader Craig

Thanks for the requests to resume posting.  I appreciate the positive comments.  I will be coming back this fall.  I apologize for the inconvenience.
It does look like the current rally will fail soon.  Market breadth is not confirming the rally.  Look for a restest of the summer lows this fall with a possible low-risk long entry into the spring…

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Hiatus

by Trader Craig on April 21, 2012

in Stocks, Technical Analysis

I wish it weren’t so, but I’ve had to take a hiatus from writing this blog due to the enormous amount of things going on in my personal life at the moment, not the least of which is my oldest getting married next month.  I will return to posting, probably in June when things settle down.  Thanks.…

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Little has changed since the last post.  It looks very much like the market is in the later stages of its current rally, as the McClellan Oscillator remains below zero, and the Summation index continues to fall.  The equity only put call ratio has quickly moved back into overbought territory, which is another concern.  As we watch the likes of…

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It is at times like these that a trader wonders if the only way to make money is to keep buying breakouts, but as surely as one gives in to that urge a significant reversal will occur.  It is only a matter of when.  Looking back at the initial rally from the 2009 low, we can see that the Qs …

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WYNN has completed a very clear upward double zigzag from its December low.  It is tempting to go short here.  The risk would be above the 3/2 high.  However, my past experience says this would not be a good choice.

While the daily chart shows a completed pattern, the weekly chart shows that WYNN is trading above its moving averages

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While the selloff in equities seemed to be averted with a 3 day rally into the weekend, there are now several clearly negative divergences that have set up.  The MACD, MFI, RSI, and Volume are all indicating that the rally over the past 3 days will fail.  That doesn’t mean we won’t see a new high on Monday, but that …

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The NYSE McClellan Oscillator hit an oversold level on Tuesday.  There appears to be two cases following when this occurs.  In the first case, the oversold level marks the end of the pullback/correction, which is what happened in March of 2011.  In the second case, which is the more common outcome, the market continues lower after a bounce, and the …

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The absolute breadth indicator has been quite reliable over the past few years at signaling tops and bottoms in the stock market with few false signals.  Extremes in the indicator point to significant imbalances between the number of new highs and new lows.  These imbalances tend to occur at market turning points.  Today the absolute breadth indicator reached a low …

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Perhaps today’s high completed the rally from the December low, or perhaps the market needs another push higher.  Either way exhaustion seems to be setting in.  IBD continues to note that leading stocks haven’t really participated on the up days recently.  
The VIX is showing a positive divergence with a higher low against the SP500′s higher high.  This alone …

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The TLT appears to be forming a very long triangle that should lead to an upside breakout later this year.  If so, the target is 132 to 140.

Very little has happened this week as the market has stalled out with the SP500 just below the 2011 high.  It looks like the SP500 will try to breach that high next

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The SP500 is stalling just above the median line for the rally as negative divergences continue to develop.  Failure to reach the upper channel line suggests that a return to the lower channel line or to support at the October high will be the target for a correction.  A break of 1337 should be the first indication that the correction …

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Oftentimes the terms pullback and correction are used interchangeably, but perhaps it would be better to make a distinction.  Let’s use the term pullback to describe a minor decline of smaller degree within an ongoing uptrend and a correction as a larger decline that concludes an uptrend at the current degree of trend.  It appears that we are near the …

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