The State of the Trend

By: George Krum | Sun, Apr 27, 2014
Print Email

Today we'll start by reposting the same chart from two weeks ago which shows the monthly SPX still holding above the blue trendline. A break below will be the first signal that a change in trend is under way:

S&P500 Monthly Chart
Larger Image

And, although that's a positive for the market, we need to point out that last week marks the end of the seasonally strong first half of the year. Another reason for concern is the fact that SPX momentum has been declining for a week, and price is finally catching up:

S&P500 Momentum Chart

The list of concerns cannot be complete without mentioning the divergence between the SPX and the DJIA, and the broader indices like the NDX and IWM.

Which brings us to a story, just published by BI, about carnage in some high beta tech stocks. The companies in question are ALNY, BNFT, CLDX, CSOD, DDD, EXEL, FEYE, FUEL, GIMO, HALO, IMPV AND MKTO. To our surprise, out of more than 100 positive analyst recommendations (hold and stronger) for the group as a whole, there are only 2 sell recommendations, one for DDD and one for HALO. This prompted us to review the default weekly OT Signals ratings. There, by contrast, all the stocks received weekly sell signals in the period between February 24 and March 24, 2014:

Weekly Sell Signals Chart
Larger Image

Gold and silver barely made it above key support levels on the back of escalating geopolitical tensions. In our opinion, it would be very naïve to expect a quick and amicable resolution of the conflict in Ukraine but, despite that fact, we cannot get bullish on gold until it breaks above the 50% retracement level:

SPDR Gold Trust Shares Weekly Chart
Larger Image



George Krum

Author: George Krum

George Krum

George Krum is the author of the "CIT Dates" blog, and the following apps:

OddsTrader - combines the power of Hurst Channels with proper risk and position size management. For a web version see OT Signals below.

Gann 9 - the only financial app that allows users to effortlessly apply the legendary W.D. Gann's tools and methods for trading (including the Square of 9).

OT Trend - helps you quantify and forecast the seemingly random ebb and flow of stock, index or mutual fund movement.

OT Fibonacci - automates the process of applying Fibonacci numbers, ratios and time series to any security.

OT Seasonal - allows you to perform seasonal analysis on practically any security from around the world, and to build long-term forecasts and models.

OT Pairs - pairs trading, one of the most successful hedge fund trading strategies, is now available on your smart phone.

OT Pivots - combines the power of pivot lines with cycles to provide you with concise technical analysis and powerful trading signals.

OT Signals - a web app accessible from any browser, tablet or pc. It gives buy/sell/hold ratings for any instrument from around the world, and defines the trend and support/resistance levels.

Copyright © 2011-2017 George Krum

All Images, XHTML Renderings, and Source Code Copyright ©