BEFORE THE BELL-LOOKING FOR CONFIRMATION UPDATE FEB 2ND

Let me preference this write up by saying I approach my charting objectively. I do not watch CNBC or any other stock program. No matter what the stock market did on any given day, I view my charts with NO EXPECTATION.

I review a list of 50 ETFs and 10 Name Brand Stocks daily.

The following ETF's are major pillars of stock market bull success. To confirm a rally and be confident, these ETF's should also confirm.

I. DDM-Proshares Dow

A. So far in the new year, we can clearly see a ramp on volume compared to the previous months. This ramp in volume as resulted in a LOWER HIGH for DDM, a black spinning top today, in what I am sure was a praised BULL DAY on the TV Shows.

B. The 20 day moving average is closing fast the gap created by Santa

C. RSI<2> is making lower highs

D. On Balance Volume, which measures the positive volume on up days, verses the negative volume on down days, has COLLAPSED below its 20 day moving average.

II. IYT Transports

A. Bookend Change of Direction DOJI has emerged

B. Lower Highs RSI<2>

C. OBV remains positive

D. Consolidation or Distribution at the Volume by Price Indicator-yet to be determined

III. OIL ETF-daily

A. Oil and the DOW have diverged. They were both moving same direction until 2012. Which is correct?

B. OIL weakness despite the drum beat of war with IRAN-signaling a resumption of bad economy and lower demand

C. Extremely bearish deliberation moving below previous volume by price support

D. Volume by price is confirmed resistance now

E. OBV collapse

IV. OIL ETF-weekly

A. Suggested distribution box that began in late November; currently 3 months strong.

V. SSO-S&P Ultra daily

A. On a big rally day, SSO formed a Bearish High Wave-loss of direction. This was formed as a lower high.

B. RSI lower highs

C. OBV 20 day gap has been closed.

VI. TMF-20 year T-bill

A. Divergence from Dow

B. Double top formed between Jan 17th and today.

C. Despite stock rally, Bearish Harami formation

D. OBV move above 20 sma denied

VII. UST-7 and 10 year Treasury

A. Divergence from Dow

B. Bearish Harami

C. OBV has collapsed

Conclusion:

Next week is 180 day completion on 360 yearly cycle. Yesterday I noted on Twitter many Parabolic Sar sell signals. Today, these charts again provide NO COMPELLING REASON to be long the major indexes.

Therefore, our strategy of long HIGH RISK mojo stocks like NFLX and potentially CROX and GMCR, along with slowly averaging into TVIX for the eventual market sell off continues. (Side note, RUSSIA is looking good as alternative investment to USA)

Tim Kathlina

AFTER THE BELL-BULL AND BEAR DOJI PATTERN SET-UPS JAN 12TH

DOJI:
The appearance of a Bearish/Bullish (Doji) Star Pattern in an uptrend/downtrend shows that buyers/sellers are now losing control and the market is moving to a deadlock between buyers and sellers. This deadlock or balance between buyers and sellers may result because of a diminution in the buying force or an increase in the selling force. The star tells us that the strength of uptrend/downtrend is now dissipating and the market is increasingly vulnerable to a setback/advance.

Conclusion: These patterns require follow thru confirmation. Note however, Transports, large caps, mid-caps are all backed up by low RSI<2> readings.

As noted in yesterdays Semiconductor post, I believe Intel earnings report will bring in a short term top of some sort. Either an exuberant exhaustion style high, based on good numbers, or a disappointment ceiling, based on bad numbers.

The question remains, will this be the high of the year????? Not sure yet.

Tim Kathlina