S&P 500 MACD Histograms (monthly)

speaking of histograms...



notice all the divergences leading up to the 2002/3 bottom. now notice the complete absence of any divergences so far for the current 'correction'. pretty spooky.

Another Nasdaq Chart

the last post had a chart of the Nasdaq Composite with logarithmic scaling. here's one since 1980 with arithmetic scaling:



notice the 300 month moving average. so the index value is now about at its 25 year average. stocks just always go up in the long run, ain't that so?

one more here:



if that histogram ever moves back to positive the dogs should start to bark again.

nasdaq 30 yr chart

got a search hit this morning for:

nasdaq 30 yr chart

but I didn't have a 30 year chart of the Nasdaq up before, so here's a chart going back to 1978:



I got the chart from this page at stockcharts:

http://stockcharts.com/charts/historical/nasdaq1978.html

Silver and Gold hourly RSI update

a little progress report since the last post (click here).





no analysis here. just a pretext to repost the greatest music video of all time:

Salt'n Pepper - Push It (Video Music)
by Grdgez

Morning Letter published at Biiwii.com

http://www.biiwii.com/analysis.htm

click that link and look for "Trend & Value Report" dated 2/26/09.

also, Gary has a great post up this morning on his blog:

GSR, TLT and the next round of liquidation...

GLD -- a 7 wave correction?

because of the dominant obsession with the Golden Number among practitioners of chart analysis you hardly ever hear anyone talk about 7 wave price formations. why is that? I can only guess because 7 is not a Fibonacci number. They're all fanatical about the number 3 and 5. 8 too.

well those are nice numbers, don't get me wrong. But in the context of human perception, the number 7 is very very special.

recently I have been working on a new method of market analysis. I am trying to apply a theory of proportion to the analysis of securities transactions. although my inquiry has barely begun, I am tempted to refer to by a fancy title -- the Theory of Catallactic Proportion. while the theory itself is descriptive, phenomenological, there may also be some practical use for it in forecasting market trends. subscribe to my daily reports to follow along as this theory develops. (use the payment button at the top of the blog.)

oh, and I almost forgot what I was posting about. one might consider the recent rally in Gold a 7 wave correction, rather than a three wave affair. does that imply anything special? well that I'm not sure of...

Business as Usual in Japanland

The second half is better than the first

Dow-Gold Ratio

primary downside target has been hit. in the tradeable future expecting Gold to underperform the Stock Markt, or to at least perform as equally bad. (after all my target low for Stocks hasn't been hit yet. read this post if you haven't already.)

also you should subscribe to my daily newsletter. use the google Checkout thingie at the top of the blog.

Vielen Dank für die Blumen!

a fellow from mitteleuropa just took advantage of the little upswing in the Euro this morning and traded some for a subscription to the Trend & Value Letter.

not sure quite why, but I'm reminded of the fabulous intro to the German version of Tom & Jerry:

That Giant Sucking Sound

You hear it? So do I. The sound of an ungodly amount of money flowing out of the U.S. Treasury to the taxpayers in the form of refunds. Just imagine. All those net operating loss deductions, capital gain losses, all those dried up corporate taxes... Ugh, our friends in the Federal Government might be the last to join the party, but it seems they are going to be the ones hit hardest.

Last month the only industries that did not take spiraling downturns for the worse were Education and Medical, both service industries (meaning they do not drive the economy) and both heavily subsidized by a government, which will soon be flat broke.

Promises must be kept, and this latest administration has made a lot of them. Expect a perfect storm for this tax season. Employees of the IRS will be instructed to be more aggressive than ever, while their adversaries on the other side will be no less passive. When it is all over, politicos who have promised the moon will be leaning heavy on the alternative minimum tax (newly revamped for pretty much everyone), while Evil Genius Mitch Romney sits on the sidelines, quietly amassing an army of Reagan democrats.

Man, even the Middle Ages weren't this entertaining.

FXI - "if we need that extra push over the cliff.."

"...these go to 11"

australian dollar last 3 month chart

got a search hit for:

australian dollar last 3 month chart

here's some charts, one of them might be what you are looking for.


(click pic to view full size)

you can also click here for an updating chart of AUD/USD.

overall I've been bullish on the Australian Dollar for a few months now. really though it's just been and forth. but I think it could be a decent buy right now, as far as currencies go.

somebody's playing the Ratio

the big battle at the moment isn't for the Dollar price of Gold and Silver, it's all about the Bimetallic Ratio now.

check out the five minute charts of each metal:


(click the pic to view full size)

and there is a little updating chart of the Ratio at the right of the page now that you can check up on periodically.

if you watch this all day long for years in a row you start to get a feel for what's going on. but if you don't have time for that then maybe you should just subscribe to my newsletter. it's entertaining and informative. and once in a while I might even make a good call. there's a payment button at the top of the blog. you get what you pay for in this world, and sometimes quite a bit more.

Silver and Gold hourly charts with RSI

these kids really like to push the envelope, don't they?





some of you have complained that I haven't been putting any music videos up lately. well, here ya go:

Salt'n Pepper - Push It (Video Music)
by Grdgez

HUI-SPX Ratio since 1996

testing the highs of last year:



however this gets resolved, it should be pretty entertaining.

GDX (Gold Miners ETF)

now that I am getting convinced that Gold and Silver are topping out, I thought I'd draw some lines on a chart of GDX.



I'd favor one of lower lines, but then I'm something of a perma-bear when it comes to mining stocks...

but if I happen to be wrong (again) about the direction of the Metals, then there could perchance be a blow-off. GDX could go all parabolic and shit. hit 45 or 50 or some ridiculous number.

A Little Too Much "Cold Medicine"

In case you weren't paying attention, the frontrunner in the non-existent competitive currency Devaluation game resigned yesterday.

Watch the video on this link to see why: http://news.bbc.co.uk/2/hi/asia-pacific/7893924.stm?lss

"He has already apologised for his behaviour at last weekend's news conference in Rome but blamed cold remedies for a slurred performance there. "

I like the use of the word "performance" in this piece, like the G7 people were gathering in Rome to put on a show. Or a circus?

His replacement, Mr Yosano, "said his priority was to "smooth" the financial system as well as stimulating demand." Him and everyone else.
My advice: Stay away from the cold medicine before you go in front of the cameras for your performance.

the architecture of a bubble

in the Trend & Value Letter recently, I've been putting forth a theory of asset bubbles. the clock's been ticking so I have just been writing out my thoughts each day and using current and historical markets as examples. someday I will publish something of a scholarly article on the subject, but for now subscribers to the newsletter get to witness the formation of the theory as it, well, 'forms'. so far I think I'm on to something. something important. something that might very well make you some money this year if only you understood it. I'll 'go public' with the theory eventually and I dare say it might give me some prominence in the world of financial markets analysis. ...but by then it might be too late for you to really profit from it. so my suggestion is to sign up for the Trend & Value Letter now. use the payment button at the top of the blog.

oh, and I almost forgot. last Monday I had one of my daily Letters published at the Market Oracle website.

click here to read it.

Gold and Silver 5 minute charts

by the time most of you read this post the market will have turned one way or the other. in the newsletter I've made some predictions lately about the Metals. it wouldn't be fair to subscribers to tell the public the particulars, but I will say that ...hmm, what will I say?

...I put a live chart of the Bimetallic Ratio up on the right over there --->

keep an eye on that.

Dance of Chestnuts Again

I don't know. Sometimes I think people must be truly insane. Two years ago, American media was all abuzz about the lack of American Saving, about how Americans were spending, spending like there was no tomorrow. Now, the same American media is all abuzz about the lack of American spending, about how Americans have to start spending, spending more so they can drive the economy back up to its same, dizzying heights.

Proof, if anything, that this latest recession is entirely psychological. Sure, people are losing their jobs, but let's face it: how many jobs were actually necessary? Companies feel compelled to promote mediocre employees after they have served for them a number of years. That leaves companies top-loaded with a lot of useless middle-management, which inevitably gets dumped once banks stopped lending for lack of profitability. So what? they should never have been promoted in the first place. 

So is it Americans' duty to start spending more so companies can hire more supernumeraries, or should we actually start saving money, like we were told we were supposed to be doing before? The AICPA has a huge billboard near my home, urging people to eat out less, eat in more and save money. This is the AICPA telling us this... I don't know about you guys, but as an accountant I have sworn an oath of loyalty to the AICPA, sort of like the old Franciscan Brotherhood. You know, the guys who took the oath of poverty? The guys whom the Pope was always running up against in the middle ages?

Okay, so if the accountants are the modern day Franciscans, who is the Pope? Hm, that's a hard one. Guys like Leo X and Rodrigo Borgia always were a little contradictory in nature, weren't they? Kingdoms collapsing all around them, German princes rebelling, and all they could think about was the Dance of Chestnuts. Sounds a lot like Washington these days. When's the last time you heard Pope Obama and the Curia talk about Social Security or Saving? To them, its still business as usual. Spend on your friends, throw the chestnuts on the ground among the candelabra while your kingdom falls apart around you... 

I'm just waiting to see who the next Martin Luther is going to be.

Padovan Ratios

here are a bunch of Padovan Ratios. I'm posting this more for my own reference than anything else.


7.159191037636890026433936138967

5.4043139490687951349296845305967

4.0795954475899005355776587605203

3.0795957043588123815540113708149

2.3247179682816502261703635075481

1.7548776599574201112836705098273

1.3247179757921134152685149960016

1.00000000000000000000000000000000

0.75487765567765567765567765567766

0.56984029304029304029304029304029

0.43015970695970695970695970695971

0.32471794871794871794871794871795

0.24512234432234432234432234432234

0.18503736263736263736263736263736

0.13968058608058608058608058608059

GLD CandleVolume Chart

Analysis in tomorrow morning's newsletter.

10 year japanese government bond chart

got a visit earlier today from this search:

10 year japanese government bond chart

I'm still looking for a decent chart of the bond price, but here is a chart of the 10 year yield since the mid-90s:


(chart found on the ECB website of all places...)

now the Japanese 10 year yield has traded below 2% this entire decade. while the US 10 year yield got down close to 2% for the first time a couple months ago (which I predicted by the way).

the Bond Bubble hasn't popped. it's just getting started!

Watching and Waiting

Japan's Finance Minister, Shoichi Nakagawa:

http://www.reuters.com/article/ousivMolt/idUSTRE5192W320090210

"Be it foreign exchange, stocks or any other markets, rapid swings are damaging to Japan's economy, and therefore won't have a good impact on G7 and Asian nations," Nakagawa told Reuters in an interview.

"We hope to combat such moves decisively."

"Europe in its heart probably wants a weak currency. The United States also wants a weak currency given the current situation, and China must be the same," Nakagawa said.

"It's the same situation for all, and it's no good unleashing a competition in currency devaluation."

Yeah, like he said, its no good unleashing a competition in currency devaluation. But if they did...who do you think would win?

Introduction to Currency Trading -- Private Course

I am offering an 8 hour course on Currency Trading.

Private, One on One Instruction conducted over the phone or Skype.

depending on your prior level of knowledge, I will teach you everything from how to set up a brokerage account, to chart analysis, trade execution and risk management.

Course can be split up into segments to fit your schedule.

the total cost for this 8 hour course is only $200.

but wait, that's not all...


sign up now (or whenever, really) and also receive a 3 month subscription to the Trend & Value Letter at no additional cost.

what I promise: to impart as much of my knowledge of forex trading and price analysis to you as possible in 8 hours.

what I do not promise: that you will instantly become a successful trader. most people have no business trading currencies (or other markets for that matter). but maybe you are different. if so, then maybe I can help.

click here for contact information.

Quote of the Day

“Like if you threw up and the doctor gave you an enema of your own vomit.”

-- my girlfriend's comment on the stimulus and bailouts.

EUR/USD daily chart

japanese unemployment trend chart

someone just searched for:

japanese unemployment trend chart

surprisingly the first result for that search had just what they were looking for. go to this page at tradingeconomics.com:

Japan Unemployment Rate

but for those afraid to click, here's a chart I lifted from that page:



and here is a chart of the Australian Dollar relative to the Japan stock market (using EWJ as proxy) over the same period:



I briefly analysed the relationship between Japanese stocks and the Australian currency in yesterday's Letter, so I thought this comparison of the ratio with unemployment interesting.

AUD/USD daily chart

a busier chart than I usually like to show to the public, but tells a decent story. analysis in the morning Letter.

Update: here's a three hour HLC too:

s&p 500 past month

got a hit today from someone searching for:

s&p 500 past month

so in my continuing effort to make sure that people actually find what they are looking for as they query the net, here is an hourly equivolume chart of SPY over the past month:



the big down volume today obviously not a good sign. the ema moving below the ma indicates downward momentum in the short-term. if the support levels of the past few weeks give way then we should be looking for quick test of the November lows, although it would not surprise me to see the Five & Dime carve out an even more extended price formation in the 800s.

click here for an updating one month chart of the S&P.

get ongoing analysis of stocks, bonds, currencies and commodities by subscribing to my daily markets letter. sign up with the payment thingie at the top of the blog.

it's gettin' Nippy! -- daily JPY charts

below are daily charts of the major /JPY pairs. tomorrow morning's T&V Letter will feature some price analysis of these Nippy crosses. I'm putting the charts on the blog because for one there are just too many to include in the newsletter, and two these screen shots don't come out clear on my word processing program.

USD/JPY:


GBP/JPY:


EUR/JPY:


CHF/JPY:


CAD/JPY:


AUD/JPY:

Reader Feedback on this morning's newsletter

after reading this morning's Trend & Value Letter a subscriber in Canada sent me a nice note. here is an excerpt:

wow, Lucas! thank you...this is a fabulous presentation to help me learn how to kick the tires. What a great here's how I tackle it... I hope that your other readers find this piece as captivating and informative as I...

you too can subscribe to my Letter. It's delivered as a PDF attachment by email every business morning (plus the occasional intraday update). get 1 month for $28, or 3 months for $65. the payment thingie at the top of the blog patiently awaits your click.

Biiwii: Gold, Silver, USD CoTs & Silver-Gold Ratio

the biiwii blog has a good post up this morning:

Gold, Silver, USD CoTs & Silver-Gold Ratio

I hope Gary doesn't mind if I copy one of his charts here:

it's that fool on television...

...getting paid to play the fool



we will have not necessarily a new direction but a reïnforced vitality, so to speak...

Palladium and the Nasdaq -- comparison chart

in this morning's Trend & Value Letter I wrote about Platinum, Palladium and the forensic pathology of asset bubbles. one chart I didn't get to include in the Letter was a chart of Palladium compared to the Nasdaq Index over the last ten years or so. so here it is:


(Palladium in blue, Nasdaq the green dashed line)

and here's a graph of the Palladium/Nasdaq ratio over the same period:

50 year chart of long term treasury yields

got a visit today from this search:

50 year chart of long term treasury yields

the T&V post featured on the search was this one about the 10 year yield (a good one to read for those skeptical about the efficacy of chart analysis...) but it doesn't have any 50 year chart on it.

but here is a chart of the 10 year yield since 1962, courtesy of the St. Louis Fed:



I'm actually looking for yield data that goes further back than 1962. like to 1900 would be good. if anyone can deliver that to me I'll give that person a free month of the Trend & Value Letter.

IKN: A pretty map of the world

Otto just posted this map of the world with the colors indicating the probable impact of the economic downturn on different countries of the world.



here's the post:

A pretty map of the world

interesting concept, though from what the data are now showing it seems wishful to think that a country like Japan will see just a regular ole recession. and Germany and France are just in for a little 'stagnation'? right...

Belshaw: Victoria's fires - at least 14 dead

just waking up here on Sunday, having a coffee and I check google news to see Australia on fire. so I check to see what my favorite Aussie blog editor, Jim Belshaw, has to say. here is his latest post, check it out:

Personal Reflections: Victoria's fires - at least 14 dead

Lucas sent me this link the other day asking whether it was on point or an exaggeration:
http://www.nakedcapitalism.com/2009/02/japan-on-edge-of-abyss.html


I live outside a prefectural capital, Okayama City, which is about 600,000 people. I have been here working in the ornamental fish farming/export business since 2005. I am neither an economist nor used car salesman, just an observer in Japanland. From what I see directly around me, not so much has changed the last year or so, although I think a "salaryman" in Tokyo or Osaka might see things different. Certainly the news paints a grim picture. All the car companies are producing at 1/2 or 1/3 of normal pace, those people are working less days a week, salaries coming down. The electronics industries looks the same. In the export world, the yen is a problem. The Europeans and English especially have not been coming to buy fish in usual numbers. In other years people would come and not buy because of price or availability or whatever, but this year people are canceling trips because it just does not make sense for them to come all the way to Japan and try to buy fish priced in "expensive" yen.

Japanese unemployment is interesting. There are a lot of 60 year old people doing part-timer kinds of jobs in Japan. Why? To pay bills? To pay bubble-era debts? A lot of young people in Japan work part-time jobs(with full time hours) because in doing so they dont have to pay into a social security kind of thing, so they can keep all they earn...but being part-time also means no bonuses. The person hurt most by unemployment in Japan is the 40-something year old Salarymnan who might have his retired parents living with him, a wife that doesnt work or only works part time, and teenage kids. These 3 generational households that are common in Japan, can get bad. I didnt know many/any 3 generational household people when I was in the States. Do you?

I was talking to a Tokyo-living, IT business-owning, American friend of mine the other day about Japan's economy. He says a business in Japan gets taxed nearly 50% on its net profits. Ideally, this keeps businesses from having money sitting around doing nothing as they'd spend the money to upgrade the business or pay their people or whatever. My friend says that as smaller businesses are slowing and/or exporters having problems because of the yen, these businesses have no cash cushion to get them through the hard times. That was something I had not known about before, but explains how Japanese bankruptcies and unemployment can get worse in the coming months. My friend also said in Japan it is easier to fire someone than to lower their salary.

The comments about Japanese having such high savings rate is something I wonder about. That might be the older generation. As a whole, I dont think Japanese people are as indebted as in the US, but I am skeptical about how much saving is going on with average people in the 20-40 age group. In all, I dont see a big change in Japan yet(except the yen problems I see firsthand in the koi business) but the news and numbers suggest things are looking bad throughout the country. In the 3.5 years I've been here there have been 4 Prime Ministers, so something must be going on somewhere....or nothing has been going on so long that a change from that is in the making.

I've got my eye on the $XJY and the yen/dollar in the short-midterm.

Turd-Burglar of the Year -- Bill Gross

Yves at naked capitalism (a site which, believe it or not, I just visited for the first time today) wrote a post yesterday worth referencing:

Pimco's Gross Calls for US to Spend Trillions to Save the Economy


ah... Corporatism. gotta love it.

anyway, this Gross dude I've never liked, but recently he's really been getting on my nerves. reminds me of a minor villain in an Ayn Rand novel. which makes him doubly pathetic considering that the attribution comes from one as Post-Randesque as myself.

here's a quote from Billy G:

“This economy needs support from the government, a check from the government in the trillions,....There is a potential catastrophe if the U.S. government continues to focus on billions of dollars."...

what this economy needs is a make work project digging wells in the Mojave to which we could ship parasites like Gross.

so anyway, Bill Gross Wins the Turd-Burglar of the Year Award. congratulations, dillhole.

oh, and as an aside, the author of the blog post doesn't seem to understand the real dynamics of this Bond Bubble when he writes, "an unmanipulated market price on the bonds would be considerably lower."

perhaps yes, in the same sense that a book without pages would be considerably shorter, or a Hell without the Devil might not be so terrible.

Australian Dollar starting to respond to 'Fundamentals'

(you may want to click image to view full size)

Charts here of AUD versus the other major currencies. in past blog posts and in the Trend & Value Letter I have alluded to the improved 'fundamentals' of AUD, arising from the trend towards a structural revaluation in relative commodities pricing. the news wires will probably attribute the currency's recent strength to 'renewed risk appetite' or whatever, but what you really have is the market finally starting to respond to the fact that the country's major exports have well more than doubled in value relative to its major import (petroleum) since last Summer. and while that structural shift has occurred the country's currency has declined 20, 30, 40% against the other major monies of the world.

subscribe to my daily market letter to get ongoing analysis of the foreign exchange markets. (payment thingie's at the top of the blog.)

Update: those interested in the Australian economy would do very well to read Jim Belshaw's blogs. he's a great writer and has an excellent grasp of the situation down there down under. here's a recent post of his:

Confusions over current economic forecasts

T-Bonds vs USD Index - quick update

in November I showed you a chart of the 30 Year Bond Price relative to the US Dollar Index. (see this post and this one too) below is an updated chart of the USB/USD ratio. the bond price is on the top, USD Index on the bottom and the ratio of the two in the middle.



interesting how Bonds and the Dollar have been trading inversely to one another lately, that probably won't last forever, but it could carry on into the next shift.

Bank of America (BAC) -- Point and Figure Chart Update

a few months ago I pointed out that BAC had a price objective of Zero on its point and figure chart. that was when the price was at 24.



point and figure charts are pretty neat, eh?

XLV (Health Care ETF) relative to Russell 3000 (broad market index)

about a year ago I wrote that "it seems probable to me that, after lagging for years, the health care sector will start to outperform the market at large."

well XLV has out-performed the Russell 3000 index by 30% since I wrote that:


(kinda makes you want to subscribe to my newsletter, doesn't it?)

but more interesting now is the longer-term chart of the ratio:

Chaiken Money Flow for NYSE and Nasdaq Indexes

click images to view full size (recommended). click here to read an explanation of the CMF indicator.

euro usd 10 year chart

this is another post in my ongoing experiment of putting content on the blog without exerting any effort...

got a hit to this post today from someone doing this search:

euro usd 10 year chart

here's yer 10 Year Chart of EUR/USD:


(click image to view full size or click here and you should get an updating version.)

you got a 12 month moving average, a 120 month moving average, a neckline, and Padovan retracement targets.

there have been a lot of books written the last few years about a currency collapsing. which currency were they talking about again?

Exxon Mobil Corp (XOM) CandleVolume Charts

tomorrow morning's T&V Letter will have some commentary on XOM. and there may be, just might be a trade recommendation. dunno yet.

there is a payment button at the top of the blog if you want to subscribe. worth every penny. just ask my mom, she'll vouch for me!

Chinese Stocks vs World Market

in this morning's letter I included this chart of the domestic Chinese stock markets relative to the DJ World Index and compared that ratio to the Goldman Sachs Commodities Index.

then I thought this would be a good chart to put on the blog.



then I thought, wow I need to get some more subscribers to my newsletter, why not offer this morning's Trend & Value Letter gratis to prospective subscribers? if they email me (trendandvalue@gmail.com) I could send them the PDF attachment and if they like it and would like more Letters (every business day) they can sign up using the Google Checkout button at the top of the blog. and then I'm like, damn Lucas, that's a super idea, you should really go into marketing...

yeah, so, anyway, a free issue of the Trend & Value Letter could be yours with a polite email. don't be shy. because you Know the old saying: shyness is vanity turned inward.

30 Year Chart of S&P 500

someone just arrived to the blog via this google query:

chart ot the last 30 year of sp500

unfortunately the search brought them to an unrelated post dealing with the recent component changes of the index.

while it is not 30 years exactly, I do have a chart for you of the S&P 500 Index since 1980:


(click image to view full size or click here and you should get an updating version.)

I'm still looking for the the S&P to fall into the 600s this year, though frankly I was expecting a bigger bounce from the November lows than what we got so far.

Forex Kitty

say hello to our new kitty. his name is Neil, aka Neal.