IWM (eft for Russ 2000) to go down along with most indices.

High probability for a 5th Elliott wave starting it's mid portion which should bring it down to around 102-106 in 10-20 days.  See chart.

Stop at 115.25.

Trade at your own risk, I am not a professional.

One more leg up probably.

The S&P 500 has stayed in the channel developing since the early part of March (see chart).  There is probably another leg up extending above 2130 to be had.  No bear market until there is a break of the lower trendline which is at 2075 now.

Oils still looking weak but I am kind of suspicious that there may be another up leg developing because the 50 MA is in an uptrend on many oil stocks and the latest leg down is really sideways in many of the oil stocks.  Nevertheless, it is in no man's land without a high probability trade available now.

FIVE continues upward. A retrace to 35-37 would be a buying opportunity.

CLF has buy signal in.  Buy range is anywhere above 5.20 with a stop at 4.95.  This is a big potential win, with a target of 7.1 which would yield a 30% gain.

I am not a professional. Trade at your own risk.

Momentum gone. Yep, it's a bear alert.

My Elliott wave interpretation of the S&P 500 2 months ago was wrong and the index put in a new high up to 3.4% gain since my last post.  But upward momentum has been lost and many stocks have given sell signals according to stochastic cycle analysis on the weekly charts.  Weekly 50 moving averages have turned down or are flat on some blue chips among others.  These include CAT, GM, HPQ, IBM, JNJ, KO, MCD and QCOM.  These should lead the pack down.  The pattern in banking stocks suggests a terminating diagonal triangle which also suggests a strong drop, but their 50 MA's are still trending up.  I can't exclude a blow off top. Any run up to new highs would be exciting, but should be short lived.

I suggested oil stocks would make a 10-20% run up last post.  They made about 8-10% and now are looking pretty weak.  SXL bounced around up to 44 but has continued it's drop as I predicted and it's got more to fall. The arrows on the chart are one's that I drew on February 28.

One of the dollar store stocks is looking strong. FIVE maybe going to new highs above 50. Now at 38ish.  I have a stop in at 33.

Summary: Upside potential limited.  Downside likely.
Trade at your own risk. I am not a professional.

Some shorts likely.

S&P 500 may be about to enter 3rd of 3rd elliott wave style with a target of 1990.  Probably a month with some volatility likely.  Specific choice players on the downside are BBY and BA.  BA has an especially classic look for retrace down to prior 4th wave triangle apex at 130, though it may have a fifth wave to 160 first.

SXL made the initial drop I previously mentioned but now may stall around low 40's.  In fact oil stocks look poised for 10-20% run up  if  they close this week and early next week strong. HAL to 55, CVX to 116.

OWW winner, SXL going down. Silvers may be bouncing from Retrace.

My target for Orbitz was $13-15 but since Expedia has offered to buy it for $12, we will settle for the 11.55 current price and exit.  My advisor said it may be in limbo while details of the buyout are settled. Anyway, that was a 35 % gain on the stock from the $8.50 buy price and better on the 7.5 options bought for $1.3, sold at $4.00

I mentioned oil stocks in the last post and they have been doing a rebound upward as I thought, but took a turn down in the last week.  As a group, I am not sure if they have some more back and forth in a 10-15% range for a few more months or if they are ready for the next leg down.  However there is one oil stock that looks perfectly poised for a 30% drop.  SXL (chart below) has a beautiful 61.8% retrace in classic A-B-C Elliott pattern to the 46 level. It has confirmed a turn down with weekly and daily oscillators.  The target is $30-32 in 3-5 months. Shorting is an options play for me so I am going to pick up some April 45 puts at around $2.50. Depending on what path it takes, they will be worth $5 -10 by mid April.  Risk management will have me sell half of them for $5 and let the rest ride to $8-10. This is a 90% trade. The stop is if the stock hits 46.5 which would probably cut the option price in half.  So risk a 50% loss for about a 200% gain.

The silvers ran into some resistance mid January and have been on a leg down since then, though Hecla is holding up well relative to the field. I have tight stops on my miners which are at a support level but have yet to fully declare whether they are ready for a 3rd wave up or need one more 10% drop.  Either way, HL is a long term play and is looking good.

Winning hand so far.

Orbitz has moved up as predicted on my last post.  Recommended at 8.50, now at 9.95, up 17% .  Target is $13-14.

Hecla continues to climb with the rest of the miners and the metals.  Up from around 2.80 on my initial post to close at $3.26 today for a 16% gain since 12/21. Target initially about 5, long term above 12.

Oil stocks look to be in a retrace upward. look for around 2 weeks of Exxon and Chevron and the others moving up.  Then I'll be looking for a turn down again.

Orbitz and Hecla

Two lovely set ups for low priced stocks.  Orbitz (OWW) has been consolidating for a year and a half in what looks like a 4th wave triangle.  It has trendline and 100 week MA support as well as upward momentum on multiple time frames. Buying anywhere from $8-9.  Stop at $7.15 and target of $13-15 which should be good for a 50% gain.

Hecla (HL) has had steady or increasing earnings as silver has dropped about 50% over the last couple of years. $2 has been solid support which includes 15 year trendline support. Average weekly volume for the last several years has been around 40 million shares. Last week it was 125 million and the Friday volume was 79 million, approximately 10 times the average daily volume. Stop is at 2.19. Target is $9 which would be a triple, but it has potential for even higher than that.  It's got some hurdles in that most moving averages are above it, but my gut says that it will be slicing through those fairly easily.  

In my last post from July I predicted Gold heading down from the 1350 range to 1000.  It made it's way to 1130 and has meandered higher from there.  Hard to say for sure if the low is in, but I think silver and gold are at or near intermediate term lows so watch for their rise over the next year as well as many of the miners. 

I am not a professional. Trade at your own risk. 

Gold dropping to 1000 highly likely, but not right away.

There is a high likelihood that $GOLD is tracing out a consolidating triangle pattern and reaching channel resistance that would result in its long term downward trend that started in 2011 continuing. This is not confirmed at this point in time but appears to be setting up.  If this is correct, then $GOLD will find stiff resistance at 1375-1385 and we will see weekly momentum and cycle indicators turn down.  What is particularly sweet about this is that exits from triangles are usually sharp.  In Elliott wave parlance they are called thrusts because they move so fast. The way I charted it, gold is finishing the E wave.  However, it may still be in a C wave which means the triangle could drag on for another year.  There is also a possibility that it is not a triangle but a 1-2,1-2 and gold will continue upward toward 1500 but this is less likely. We will just have to wait and see.  If it does turn out to be a triangle, you will be looking at a 25-30% move in a relatively short time period and that can spell very good
m-o-n-e-y.

That is a sharp retrace.

IBM put on about $7 in two days for a nice win.  This is an example of how every once in a while an Elliott wave pattern is useful.   It is now at resistance around 188 - 190 so taking 80% off the table.
AXP is still in play to go to 98-100. stop at 94.
MCD was the slow mover with a down day today to trend-line support.  Therefore, this is now a good risk/reward ratio. Should spring up to 105 in a couple of weeks.  Stop at 99.5 minimizes loss.

a few 5 percenters

The trend is still up in many stocks though weekly momentum is starting to wane.  A few stocks in particular look pretty good for adding 5% in the next few weeks.  

American Express (AXP) looks to be coming out of a 3 week sideways consolidation and should head toward 100. I'm buying between 94.10 and 95 with a stop at 93.5.  Expecting similar action from MCD though it may be a little slower to move since the daily momentum hasn't turned up yet.

IBM is looking like a high probability to head up to 186-190 from the 181 level.  What is particularly interesting about this one is that it may be coming out of an Elliott wave diagonal and these usually result in a pretty sharp reversal.  Thus an option play could result in some nice profits. 182.50 strike price calls expiring 7/11 are selling for a buck and should hit around $3. 

On the short side, one would have expected GM to be dropping over the last month or two with all of the recalls, but it appears to have needed to make a retracement from the 5 waves down it did January to April. Now it has completed an ABC to near 61.8%. December 35 puts are $2 and should go to $7 since the target is $28 for the stock.  Stop at 38. 

Trade at your own risk.  I am not a professional.

Weekly charts win

The weekly charts have handily beat out the daily downtrend.  New high in Nasdaq very likely.

Tiffany was a classic example in the markets that anything can happen despite the best technical set up.  CSCO to 27.

Bearish scenario still in play

There have been some erratic price movements to the upside since my last post and QQQ popped up to 88.5. It may still try to hit 89, but downward pressure is on.  Signals I have recently described are still showing in numerous stocks.  One classic example is Tiffany.  TIF had a classic Elliott 5 wave impulse down March to Mid-April, then a back and forth retrace to the Fibonacci 61.8 % retrace which is also at a 3 point downward sloping channel.  Other parameters also point to continued drop in the stock. The initial target is around 80, probably in 3-5 weeks.

A few stocks expected to lead the way down are IBM, SHLD, ANF, and AXP.  Expect about a 10 % drop in these over the next month or so.

Also, CSCO did make it's anticipated pop and should continue toward 27 despite downward pressure on stocks overall.  Stop for CSCO is now 22.4

I am not a professional, trade at your own risk. 

Watching carefully

The bearish signals are most significant in the Nasdaq.  Watch for the 87 area to hold resistance if the bearish scenario is to remain intact.  BMY may be a good long, will continue to watch for follow through on that one.

Da Bears

Special update... I have had a tendency to focus on bearish events in the markets and on several occasions have called downturns incorrectly.  Being aware of this tendency, I have attempted to find stocks that I believe are moving up, such as YRCW, CGI, OWW, CSCO, and a few others to join in with what has been an incredible bull market since 2009. Several of these have done well and a few such as RIG and CLF not so well.  I mention the above so that you know that I have considered my bias and hope that you do not hear me crying wolf with this update.

The chart below shows the daily Nasdaq 100 ETF (QQQ) with a pattern that suggests and impending downturn.  The degree of the drop is not clearly known at this time as it will depend on price action on weekly and monthly charts as well.  I will be paying close attention to those to look for evidence of a new upturn.

However, a preponderance of evidence is mounting that suggests a significant top has occurred in the markets.  

1. Numerous major stocks have closed gaps that were left in impulse waves with retracement type patterns.  GE  and AT&T are excellent examples.

2. Many major stocks appear to have completed bullish 5 wave impulse patterns. AA, BIDU, NFLX, APC, AET, BA, TIF

3. There are several stocks with weekly bearish candlestick patterns (inverted Hammers and bearish engulfing) 

4. Banking stocks have turned bearish and are often early to move in new trends.

5. A 5 year cycle has hit with the March highs. 

It is certainly true that markets can do anything at anytime and just because there is evidence that many stocks appear to be entering a bear phase, it does not mean that all of them are.  At this time, I think it would be prudent to keep tight stops on positions.

For anyone looking to short, I suggest picking some that already have 50 week moving averages that are flat or have turned down such as ANF, BAC, BBY, C, EWJ, EWZ, FXI, GM, HD, IBM, JCP, JPM, NKE, RIG, SHLD, T.

In regards to recommendations from my last update, BIDU hit the 165 target and FB it 63.5, just shy of my 64-66 target range.  CSCO moved up a bit but did not shoot up in a 3rd wave, so I have sold 2/3 of my position and am maintaining a stop around 20.90 for the rest. 

Trade at your own risk.  I am not a professional.

CSCO, VLO, BIDU and FB update

VLO ran up into the range I mentioned topping recently around 53.7 and dropping back down in what looks like a 5 wave.  This brings into question whether it will stay below 55, so this downside play is on hold until a proper turn in momentum is seen.

Cisco did come down to 22.5 and is looking solid. It may be entering a 3rd of a 3rd elliott wave which would mean rapid movement up to 27 and eventually 30.  There is still a low chance of a quick drop down to 22 but that would be a tremendous buying opportunity if it was rapid because that level has significant support. 

BIDU and Facebook still have some downward momentum but look to be joining in the coming rally with short term targets of 165-170 and 64-66 respectively.

I am not a professional trade at your own risk.

Cisco looking strong in face of weak overall market. VLO setting up for fall. CGI was a big winner.

Cisco has upward trends on daily and weekly charts as well as a series of bullish impulse waves since mid 2011.  While the Nasdaq has shaved off 8% in the last month, CSCO is up around 8%.  Look for pull back to $22-22.50 to buy.  Target is 28-30 over the next few months for around a 25% gain. stop at $21.

On the daily and weekly charts, momentum for VLO is sharply down.  In addition, there are significant divergences on indicators.  The chart below shows a classic and pretty impulse wave down.  I'll be watching for a retrace up to at least 52.5 and possibly up to 54 but then it should turn and go south with a first target of 48 and second of 42 ish.  If we can pick up May 55 puts for 2.50, we should be able to get a triple by selling them for 7.50 in a month or less.  I'll be watching for the turn signal on this retrace.

Updates from the last post...

- RIG broke down through 20 years of trendline support so that trade is over.  If you bought at 47-49 and got stopped out at 42 then that was about a 12% loss.

- IBM made it to 190 as I suggested but is having trouble with 195.  No recommendations now.

- CVX did not make it to 130 so we got stopped out at 120 for a 4% loss.

- Citigroup and BMY both promptly made it to 55 as predicted for 6-8% gains.

- CGI made it up to 24 for a 23% gain.

- And my big love YRCW is still looking good as a long term buy.  After my last post it dropped to my buy range of 12-15.5 and then promptly took off for 27.  Now at 20ish it is still a buy and may drop down to 17.5  for the opportunity to pick up some more.  

I am not a professional. Trade at your own risk.

Picks

Markets appear significantly overbought, but still no clear signs of slowing down so I am focused on the upside though still keeping an eye on some potential bearish plays as a hedge.

Updating from last post, CAT was not actually dead, just in a coma which it woke from and came roaring back up to the target above 90.  It is reaching resistance now and I have no recommendations regarding it.

RIG retrace made its way down to about 47 but has turned back up and should be taking off for long term bullishness as mentioned in previous posts.  It is a buy!

IBM got down to 172, just above my target of 170 and now is in a strong up trend with next resistance at 190.

CVX bounced around since the last post making it down to 118 ish but now is back up to 125 and still should hit target of low 130's. Stop at 120.  Citigroup and BMY both are showing signs of running up in an elliot wave 5 on Daily charts with targets of about 55.  Stops at 51.40 and 52.40 respectively.

CGI is Celadon Group, a trucking company trading around 19.4.  It is bouncing up from 10 month trendline support and is a buy with a target of 24.  Stop is at 18 so risk/reward is about 3 to 1, 7.5% loss vs 25% gain.

Also in trucking is our old friend YRCW.  It had a big retrace down to 7.5 and popped back up to 20. Trading around 17 now.  It is a buy from 15.50 down to 12 though one might have to endure some high volatility on this one since there is a gap way down at 8.70. Long term I think this has great potential.

Summary... CGI, RIG and YRCW long term buys.  CVX, Citigroup and BMY short term buys.
I am not a professional.  Trade at your own risk.

The CAT is dead.

CAT did not quite make it up to 90, so this was a case where it moved in the right direction but didn't quite make it to the target. It is now actually a sell since it is breaking down below some significant long term support. I'll watch it over the next week to confirm that it is now in a downtrend.

RIG had a nice pop up to 55 ish but is now retracing to the 52-53 range. It may go as low as 50, and it is still a buy for the long term. Stop remains at 44.

Expect CVX to hit the low 130's over the next 6-8 weeks. Current price is around 124.

IBM may be entering a third wave down, heading to around 170. It was down 1.5 % on Friday while other Dow stocks were climbing. This could be a big options play. Try for some Dec 180 puts which will be quite attractive if the stock does a retrace up to 183 this week. 

RIG does a jig.

RIG had a big pop today occurring in concert with the S&P 500 announcement that it will be replacing Dell in that index. The trade is on.  Long term target is 200.

CAT has been on a steady rise since the last post.  I would like to point out that technical analysis can predict social/economic news as I did in my last post.  The markets are more likely to push a news story to the front page than the other way around.  But the ultimate truth is that they occur in concert.  Everything is connected.  There is no coincidence, only synchronicity.

C is for CAT

The overall markets are still in an uptrend despite the government shutdown and debt ceiling debacle.  Chart patterns suggest another month or two of gains.  These gains will be synchronized with positive movements on the political scene.  Expect some kind of deal to be made in Washington this week. Along with this positivity CAT should gain about 12%.  The risk with the appropriate stop  is 3.5%.  See below.

There are many major stocks which have been in a consolidation pattern since May/June.  American Express is one of them and CAT is another.  AXP has likely made an Elliott 4th Wave and CAT probably has made a Elliott B wave.  Expectations after these kinds of consolidations are a strong thrust out of the pattern.  Click on the chart for better viz of a few details.  Buy Range, Stop and Target are listed.  An impulse wave that started on 10/9 is complete from 82.45 to 85.85.  Now look for a retrace into the 83.50 to 85 range over the next day or two. Additional technical factors that support this move up include (1) bounce from 50 month moving average at 81.56, (2) Daily MACD histogram just turned above 0, (3) One hour moving averages with solid up-slope.