In the post directly below this one, the “Power of the Pattern” was suggesting the U.S. Dollar could be about to rally off of support and to the upside of a bullish falling wedge. (see post) Currencies can be a great leading indicator, as well as Copper and High Yield mutual funds.
Leading indicators slipping below key support? Check out below….
CLICK ON CHART TO ENLARGE
In the post “Is 1987 impacting todays prices” (see post here) numerous long-term resistance lines came into play of late. With resistance dating back to 2000 and 1987 at hand, seeing these leading indicators slipping below support brings in a new level of respect for risk and increases the odds that harvesting/protecting capital was a good idea a couple of weeks ago!!!
Your informational website is a great help, for those like myself, who are at, “the end of the wall street food chain”
Thank you, for being there…………
Hey Craig…I attempt to get direction correct and I do work hard on finding relative strength. Example, I have not disliked gold this year, yet per trading the metals, we only invested in Silver prior to it hitting $48. Gold did well, up 12%, yet Silver was up 62% during that time frame. Treasuries/high yields, they have different friends and foes, so we play each of them on an individual basis. Currencies….long/dollar short the euro usually works. A couple of months ago we bought FXA on a channel breakout, it was up over 6% in a month. Hope this helps a little. Further questions Craig am glad to answer. Send me an email with them so I can send back charts to further help the discussion.
Thanks for the awesome questions and thoughts!!! All the best,
Chris
I have enjoyed the last week / 10 days observing your charting and relationship analysis… was wondering whether you have ever tiered market sectors for best risk/reward at the current juncture for an intermediate-term swing trader. For stocks: R2000 a better risk/reward short than other indices? For bonds: short Treasuries or High Yield Corporates (is there a difference)? For metals: short gold or silver. For currencies: long the dollar, but best foreign currency for short? With these answers, I can translate the appropriate ETF
Lee….shorting is not necessary at all! Scoring on defense is secondary compared with “capital preservation!” Per the 500 index, a 100% gain took place in the late 90’s, another almost 100% gain from 2003 to 2007 took place and what an 85%+ gain from 2009 until the highs in May. The total gains possible are over 250%, yet I find many don’t have those gains in their accounts for one key reason…the lack of “harvesting/taking some of the gains!” So when you step aside, per harvesting some values close to the highs….high 5 to you! Great job!!!
Chris, Thank you for your thoughtful and timely information.
Late May I pulled out of EEM and the Russell..
Now how safe is Canada? I am in Canadian banks, energy,
commodities and bonds, collecting nice dividends, but your
analysis suggests putting even more cash on the side and waiting.
I am not in a position to short or do anything fancy.,
Todays performance is a prime example day of why the funds can be of help versus the ETF’s. As you mentioned the ETF’s were off almost 1% and the funds were flat to off 15 basis points. We have scaled back on PFF. Shoe box is close to a sell. If the CRB pattern is correct, some big time fun is not far away!
JNK took a relatively significant haircut today – off 1%. Will be interesting to see how the high yield mutual funds fared. Glad I got out of these on the break of the 20 day sma and 50 day ema,
Any thoughts on PFF – seems to have held up pretty well and is sitting on support dating back about 1 year. I imagine it will go with the rest of the S&P.
There is a lot of talk about the market continuing to go down, or a rally occurring – seems like it could also go sideways from here within a channel.
John… In my humble opinion, captial preservation is when patterns like this take place. If investors are looking to score on defense RWM has about a 65% chance of doing well because of the chart in this link.
https://www.kimblechartingsolutions.com/2011/06/what-would-you-do-russell-2000-updated/
Thanks for the great question,
Chris
Aaron… Last two times the 500 broke support with margin debt this high the 500 index fell 50%, twice in the 2000’s. Does that mean it will happen again? I understand your 1930’s concerns. I am not suggesting or attempting to suggest that we will have a 1930’s situation on our hand though. If you went to cash in 1929, you would have increased your purchasing power of the next three years by 900%! Wil this happen again? Don’t know. I do know this…we are using “capital protection strategies” right now and will see how the cards unfold going forward.
My main goal is to “enlarge portfolios, regardless of market direction.” I have never been more excited in my 31 years of doing this! The tools we have today are awesome, per dealing with how every this world unfolds!
Thanks for your great comments, viewership Aaron. Much appreciated.
Thanks Chris for your strong sense of conviction.
I too believe that this is a repeat of the 1930s
How similar do the charts of 2008-2011 look when compared to those in the 1930s?
Aaron
We trade the patterns whether stocks go up or down. What should should we be invested in or picking up to ride this movement downwards? Any buy signals?
Aaron…with some of the key indicators just now starting to break down and margin debt at such high levels…I doubt this puppy is over with. Back in 2007, when wedge support broke, the margin debt really started to unwind. Keep in mind, the wedge is just now “starting to break”! See margin debt lofty levels below
https://www.kimblechartingsolutions.com/2011/06/using-margin-debt-and-rising-wedges-as-your-guide-again/
And the kiss…
https://www.kimblechartingsolutions.com/2011/06/did-resistance-dating-back-to-1987-reverse-the-nyses-trend/
And resistance dating back to 1987 and 2000…
https://www.kimblechartingsolutions.com/2011/06/is-1987-still-impacting-prices-today/
Hi Chris,
I have read some commentary regarding market direction.
Yesterday, the S & P rallied to its 150 MA and has since headed lower
I have held SH, RWM, PSQ, and EFZ since the end of April due to my own analysis and your guidance. I am thinking of selling them if the S & P gets to ~1250 as that is its 200 MA.
A significant rally may ensue at this level
If the S & P breaks below 1250, would you continue to short the market? What is the next support?
Thanks,
Aaron