Archive for September, 2010

This updates my daily bars chart of my Sept. 20th post.

This past week, price definitively broke up through the weekly R1 level, which shows great strength to this uptrend.  But, it hit the H2 level described in my last post here, and pulled back from that.  On Thursday the pullback halted right at the Alternate R1 curve, and on Friday price surged strongly up again.  So, we have two possible scenarios here.  One is that this is a resumption of the uptrend after a little pullback.  The other scenario is that the H2 level will hold, and price won’t go above it, thus ending this uptrend.

If the first scenario plays out, price will break above H2.  For this scenario, I have fit a TopFinder, the purple curve, to this little pullback.  It shows that this uptrend is currently 61% to its completion, in terms of cumulative volume, and it projects that this uptrend will end at the horizontal position of the vertical dashed line on the far right of this chart.

Notice that this uptrend that we’ve been discussing here is on the very short term, a timeframe of a few weeks.  Also on this chart is a somewhat longer term uptrend of a few months that began at the end of July.  Price is now displaying both a higher high and a higher low.  Whether or not the very short term uptrend has ended now, the somewhat longer term one is still in effect.

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This updates the weekly bars chart in my Sept. 20th post.

We see here that last week’s price bar broke above R1, so this indicates a new uptrend on this timeframe.

I’ve drawn in horizontal line H2 at the level of the January high since such a line sometimes offers significant resistance.  Notice, in my previous post here today, that this level is the same as the level of the Old R1 curve of the monthly bars chart, so this is a significant level, and one which plays a role in the daily bars chart, which I’ll update next.

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This is an update to my July 31st post about the long term trend as shown on the monthly bars chart.

With this chart here, we see that the conclusions of my last post on this timeframe still hold.  Price has come up, but it’s still below R1, so we’re still in a downtrend on this timeframe.

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This is the update of my Sept. 11th post.

In these two charts here, the daily bars and weekly bars charts respectively, we see that last week price strongly broke above the weekly R2 level and surged up to the weekly R1 level, where on Friday it paused with a doji candle.  This means the market is at a crucial point.  A breakthrough above R1 would be a very bullish indication, showing that on both the short and intermediate term timeframes the uptrend has substantially further to go.  But a turn down from Friday would signal the end of the short term uptrend, and would indicate that on the intermediate term timeframe, the weekly bars chart, we’re just in a sideways consolidation.

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This is the update of my first post of Sept. 4th.

In my Sept. 4th post, I said that it was important to watch price’s behavior w.r.t. the Weekly R2 level.  During this past week, price consolidated on Tuesday and Wednesday down to the R1 level, found support there, and resumed its upward motion.  On Thursday and Friday, price poked above the Weekly R2 level, and at the end of the week it actually closed just a hair above it.  This is not a definitive breakout above Weekly R2, so we still have to watch what happens at this level in the coming week.  However, overall, it appears that the new uptrend is still in effect.

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This is an update of my Aug. 9th post on the accumulation/distribution situation.  See that post and its preceding ones for definitions of the indicators and terminology I use here.  Shown here is a daily chart of my accunm/dist indicators extending all the way back to mid October of 2008 in order to see the longer term behavior.

In the first part of this chart, during the steeply declining market up to mid January of 2009, we see in the upper pane that average down volume was significantly above up volume, as would be expected in a downtrend.  But for about two months before the March 2009 market bottom, there was little significant difference between these two curves, which means that the negative sentiment behind the market had dissipated, a leading indicator of the end of the downtrend.

From March through June of 2009, up volume was robustly aove down volume, consistent with the strong up market.  But, from July through September 2009, the two curves were nearly the same.  And from Oct. ‘09 all the way through to the top of the market in mid April of this year, down volume was strongly above up volume.  I take this as a very long leading indicator that the sentiment behind the market had turned negative.  From the market top in mid April up to mid August of this year, down volume was very strongly above up volume, consistent with the market downtrend.

But, starting in mid August, the gap has closed, the first time this has happened since last October.  This is a very significant happening, and to my eyes looks a lot like what happened in early 2009 ahead of the market bottom and turn around to the upside.  This could well be the indication that we are at, or close to, a major market bottom, from which an intermediate to long term up trend will emerge.

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A week ago, I noted that price had stopped its decline at the horizontal support level defined by the May 25th low.  Now, this past week, we see in the first chart below here (daily bars) that price has robustly sprung above that level, breaking above R1.  The R1 break means that, on the very short term basis, the previous downtrend has ended.  Furthermore, on a many weeks long timeframe, we see that last week’s low established a higher low compared to late June, so this is likely an uptrend now.

Now look at the second chart here, weekly bars.  We see that the horizontal support identified on the daily bars chart is here quite prominently on the weekly bars chart also, going all the way back to that minor high in late August of 2009, and confirmed at each one of those gray arrows.  So, the fact that price is bouncing up from it again probably means this is a major trend reversal on this timeframe, too, making it likely that we are starting a new uptrend on this intermediate term timeframe.

This coming week, it is very important to watch what price does at the Weekly R2 level, also marked on the daily bars chart.  Looking at the daily bars chart, it seems that price has such upward momentum that it will likely go right up through the Weekly R2 level, confirming the new uptrend on both of these timeframes.  But in the somewhat unlikely event that the Weekly R2 level holds and price turns down from there, then this new uptrend scenario would be in serious doubt.

In my next post here today, I’ll show how the accumulation/distribution behavior is now supportive of a new uptrend.

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