TIMING UPDATE: SIGNS TO WATCH FOR FEB 29TH

On Feb 15th, I posted this chart of GOLD and indicated the FIB ENDING WEEK OF  FEB 21; the week ending FEB 24TH, was a significant time to watch for change in GOLD.

I indicated the move out of this FIB week would be of importance going forward for 34 weeks after.

Today, exactly 3 trading days beyond the FIB ending week of the 24th, GOLD DECLINED $100 dollars. The decline was on heavy volume, filling up gaps and creating a BEARISH ENGULFING PATTERN.

On FEB 15TH, I also pointed out the close relationship between EURO investment and GOLD investment. I also indicated that it is my belief, that a credit event either with a bank or country, could force the hand of banks or countries to unload their GOLD stock.

The EURO today saw heavy selling on increased volume, creating a lower high on daily chart.

The US Dollar found solid support at the 200 sma on daily; creating a bullish engulfing pattern.

It is my contention based on history, markets can not find bottoms unless the DOW:GOLD ratio moves closer to 1 to 1 or 1 to 2.  Currently it takes 8 Oz's of GOLD to buy ONE SHARE OF THE DOW.

This chart divides GOLD by the DOW and shows the relationship is testing an uptrend line of significance.

Conclusion:

The DOW/GOLD ratio is directly affected by the action in the EURO and the US dollar.

The parabolic move in GOLD has been quickly taken back and might foreshadow the next move in the indexes.

FIB WEEK analysis suggest the move by GOLD  after 21 FIB WEEK ending 24th, could  foreshadow the next leg in GOLD.

GOLD/DOW ratio shows the broad indexes can not move higher; if the commodity indexes are moving lower. A compression in GOLD, will mean a compression in stocks.

The EURO and US dollar play a pivotal role in the direction of GOLD and the DOW. Both currencies are at make or break pivot areas.

Will GOLD/DOW be supported at the up sloping trend line? Will the EURO hold its pivot?  Or will the US Dollar break higher and DOW/GOLD break below its upward trend setting up a new trend?

Tim Kathlina



TWITTER SET UPS LOOK BACK

Here are a few side by side charts from todays close, compared to Twitter mentions week of Feb 13-16.

Keep in mind the indexs have moved higher since that week, so short profits are limited. Many others yet to play out. Once market direction swings, most the set ups will be profitable.

Tim Kathlina



POTENTIAL REVERSAL PATTERNS FEB 28TH

Here is a list of ETFs both short and long with potential reversal set-ups:

First is the US DOLLAR. Very Bearish Opinion of the dollar, yet with a higher low, sets up a potential upside surprise.



The market masks its moves and maintains a bullish emotional sentiment all the while losing overall impulsiveness to the upside.

Tim Kathlina



S&P TIMING UPDATE FEB 26TH

On Feb 10th, I posted this SPY yearly chart.

At the time it was my belief that we were in a 3rd wave, minor five, and that the END OF THIS MOVE WILL BE SOMETIME THE WEEK ENDING FEB 24TH, or shortly after.

I put out the possibility that SPY could trend down into this FIB TIME. Previous years the index moved lower into the 13 week Fib time frame; we had to consider this a possibility.

We know now, despite the loss of positive momentum into this 13th week, noted on RSI<5> and <2>, the index has been able to grind higher.

We can now count 5 minor waves up on the daily; lending credence to the top call for week ending Feb 24th.

Drawing a resistance line, which marks all previous tops in this minor wave 5, allows for an additional 10 points of upside in the SPX; into R1 at 1376.

Previous pull backs within this up wave have not exceeded 20 points-the index must move lower greater then 20 points and 2 days, to confirm a wave 4.

Our immediate near term downside targets are marked at the pivot: 1301 and resistance <1> 1270.

 I have previously noted, the expected time for completion of wave 4 is 4.7 weeks.

In forecasting, we always have to assume alternatives-here is a weekly view.

Notice R1 gets us all the way to 1393, however our downside targets are much more bearish: 1234, 1098, 938. These are a probability, but more likely summertime pullback targets.

Notice weekly RSI<2> is almost 100. Hard to go much higher then that!

Conclusion:

FIB week 13 is completed-ending Feb 24th. We are able to count 5 minor waves, suggesting a top of some sort.

R1 target of 1376 and top resistance line allows for an additional 10 points higher to complete this move. RSI divergence indicators however, suggest a beginning to wave 4 can come at any time-day-hour.

We expect at least a 70-100 point wave 4 decline, possibly more; completing within 4.7 weeks-give or take a few days.

Monday Pending home sales at 10:00. On Tuesday Durable goods orders, Case-Shiller and Consumer confidence. Wednesday Q4 GDP, the Chicago PMI, and the FED’s beige book. On Thursday, weekly Jobless claims, Personal income/spending, PCE prices, ISM manufacturing, Construction spending, and monthly Auto sales. On Tuesday, FED governor Duke testifies before the Senate on Housing. Then on Wednesday, FED chairman Bernanke testifies before Congress on Monetary policy.

I expect all this data to be the usual web of lies and deceit, in an attempt to continue multiple expansion.

Tim Kathlina



TVIX INVERTED

Per CNBC TODAY:

For Market, There’s No Such Thing as Bad News Now

The way things are going these days, the New York Stock Exchange could be aflame and the only reaction from investors would be to buy stock in companies that make fire extinguishers. It’s not that there aren’t reasons to sell off — plenty of them in fact. It’s just that nobody seems to care.

Ask Sears (SHLD) shareholders; company lost 2 TRILLION in the 4th Quarter-stock up 20% today.

Back in the late 90's, oil was $8 a barrell. All stocks related to oil, drillers, exporters, gas producers, etc, were all trading below $15 or even $10 a share. Nobody wanted to pay this price for oil and oil related, dividend paying companies. Today-those stocks are over $200 a share, split a few times and have paid big dividends over the last 12 years.

Nope, instead, everyone wanted Qualcom at $800 a share, Micro Strategy at $3000 a share, Commerce One at $500 a share and many other names that, most of which, are no longer around.

Today, just like then, the pundits were all over TV telling everyone how CHEAP these companies shares were, companies with no customers and no earnings. Telling everyone that in no way did they want to own oil and gold and silver.

This Greek Tragedy will end the same as the rest-bubbles bursting, jobs lost, people shooting their coworkers. History repeats-this time is no different.

I inverted TVIX chart-common technique in technical anaylsis. Does it look like a bottom?

Here is the S&P inverted.  If you were looking for a PANIC LOW-would this be it??? Sure looks like one to me. 

Is this a top??

Tim Kathlina

TWITTER TRADE SET UPS SHORT/LONG FEB 22ND