Our nice little rally is hitting a bump in the road. No surprise as you can see we are up into resistance, the red line, and the seasonal has a minor down tendency for a couple of weeks here. What to do?



I exited my long on Friday, taking profits. I had hoped to get a little more out of that trade than I did. I have several things that are showing potential tops, but the first one shows 4/11 then 5/22 and 6/12. With all that it mind I think this pullback will be a buying opportunity, but not for a couple of days. The seasonal gives us a general idea, but as you can see, it has already been off a little so just becomes a visual crutch. I have found that in general seasonals get followed but at times can stray. As a result it is just one thing to consider, but cannot be the sole criteria used.

The one fly in the ointment which could trump all of this is that the government is doing everything they can to foster a continuing anti business climate. If they continue to do this all bets are going to be off on the downside. I still think we will see new lows, but they rally prior to that I thought would carry further than we have gone so far. It is possible that all of the pro-union anti business planning and out of control spending could cut the rally off short. We have to watch this pullback closely to see.

Here is the cash SP 500. I have gotten several emails about how far will we go? My answer is more about time than price. The two dates that keep coming up are 5/22 and 6/12. I have no idea if these dates are any good, they do not have as much going for them as what I posted when I called this low previously. However, there is a seasonal tendency for highs to be made in that zone so maybe they will be decent targets time wise. As for price, that would be a guess. My short term targets are about 20 SP500 points away in the 838 area but that is more for an exit of a trade than a call for the high.

We are very short term overbought now after today so a decline would not be a surprise at all. I am looking for sell signals as we move up but am currently on the long side of the market.

As we approach May I will give more current posts about when the short term top might occur, for now it is play the long side until we see something that represents a short term reversal, which could come any time but I think the major top will be in May.

It is time to expose these morons that are telling everyone that Gold has always been a place to go with their money during a financial crisis. It is one thing to just be ignorant, maybe some of these people are, but I suspect many are just lying to try and make money off of this farse. Above, in a terrible graphic display, I have two charts with the Dow Jones average on top and Gold cash underneath. I just can't get this formatted better so this will have to do.

The periods marked with vertical lines are 1974, 1980, 1982, 1987, 2000, 9/11/2001, and July of 2008 when the current crises became pretty well known. As you can see during the first five periods the price of Gold declined. The 2001 period marked the first rise, and the current one is flat so the jury is still out on that one.

This comes as no surprise to someone who trades with real money and is not a paper champion spouting off all this advice to people with no real idea what they are talking about. I cannot afford to as Roger Clemens would say "misremember" relationships like this.

There is a very close relationship between the price of Gold and inflation, so that is where you need to go to base your investment decisions on gold. We have not always had inflation during prior crisis periods which is why there is no relationship here. I implore you to do your own research before investing money into Gold. One of the strangest things I have ever seen is going on with Gold. When it drops 20% it does not seem to count as a drop whereas a 20% drop in stocks prices does count as a 20% loss. How people use this logic is beyond me, if you buy gold at 1000 and it drops to 900 I hate to tell you but you have lost 10%, it does count.

I am not running for election and could care less who I offend with this. If you are offended, you must be one of these people lying to the public to try and make money, I want to offend you.

They don't make day's like yesterday more than once every several hundred years. This is an intraday chart of 30 Yr Bonds. The large spike represents from high to low about 8 full points, 4 times what was for years the daily trading limit. This occurred in about 15 minutes thanks to the PPT. For those who do not believe in the PPT you should have your head examined after a move like this.

This is going to support this rally for a bit, but bigger picture most of us know this is a very bad development. Bonds have historically been very supportive of stock prices so this move to drive down long term rates should provide support for a time. However, once this steam runs out look out below, a sharp drop is going to occur. Time cycles suggest May but there is no way of knowing for sure. I suggest for those who have not gone to cash to consider doing so in May specifically if prices are higher than today. In my view we are going to take out the years lows again, so we have a nice opportunity to correct a mistake for those who did not go to cash from way above in the 13000 range like some of us did.

There will be a fantastic buying opportunity to buy stocks when this is all over, but it is not here yet.

BARRY... BARRY



Here is an example of what has to be one of the darndest things I have ever seen in my 23 yr trading career, the Barack Short Sale Trade.



Here are the rules, wait for him to speak publicly on any topic during the morning hours of trading, and short the SP 500 immediately at the market. Use a 10 point stop, which has never been hit yet doing this, then trail down or stop to take profits. Posted here is todays trade, it is amazing to me how negative he is for the stock market. Regardless of your political leanings, this is a trade that just has to be done. Alternatively, you can look for short entries in other methods you use once he starts talking, but it is does not need to be that complicated.



For a trading system to be viable it has to be based on fundamentals, in other words, it has to make conceptual sense to expect a good repeating of the results out of sample. In this case, his policies are obviously negative for capitalism, and the market speaks loudly endorsing that. So you have a fundamental, that also winds up being supported by price action, which is what you need to have a technique like this work.



The only danger I see in this is that eventually everyone will figure this out and then it may stop working, but until then, it has never yet had a loss. I have tracked 12 of these so far, with 12 wins and no losses.

Missed it by that much! "Maxwell Smart"

Well I called for the 13th or the end of this week or close to it, and it appears it was Tuesday so I was off by a few days. However, in this business calls do not get much better than that if this upward move continues. Will it?

Although I base most of my trading on looking at relationships that have proven themselves over time as predictive, sometimes you have to use good judgement. I had posted previously that many of the other things I would normally require to make a call for a major upmove were missing, I thought this bounce would occur. I do think it will continue, to shake the tree a bit. The world is short except for some buy and hopers still out there. It has been remarkably easy to make big money on the short side, so a squeeze is likely.

After just one day nobody really knows if it will stick or not, but with the seasonal supporting it, I think it will for awhile. For the record, I am not long this market at this point, I am waiting for a sharp continued move to short, or a more sustained move that pulls back and gives me a buy entry. Too early to tell which will occur at this point.

However, for the buy and hopers, a nice move up could give you a chance to switch to cash in your accounts and get back some of your losses before the next move down which could be significant once it starts.

I thought it would make sense to do a report card on how I have done here recently. As a trader there is no bs your results are measured in dollars and cents, there is no try, make money or lose it.



Here are my recent market calls and then a review of how good or bad they were:



Bonds - I posted selling time on the exact day of the retracement high the market fell from 135 to 123 a $12,000 a contract move, A for that class.



Natural Gas - I stated it was set up for a sell but thought it would drift a bit higher first. It drifted higher for 3 more days then tanked. This was a tad over $9,000 per contract to the low, A as well here.



Gold - I posted that this was good for $100 on the short side on the day the market made a high of 1007.7, the recent low is 900.4, over $10,000 per contract, another A+.



Dollar - I posted that I thought we had a short sale setup that might look marginal after the fact, this was a lousy call as the market has basically chopped around and gone nowhere, up slightly. I also said that if we break out to new highs the market could really take off, jury still out on that one. Overall I would rate this as a D.



Stocks - I have said that I thought we would have a bounce in March, then the next day fine tuned that to March 13th being the low. Obviously we do not know if that is any good or not yet. If I am right here the low should either occur at the end of this week or close to it.



Report Card shows 3 A or A +'s if the plus is allowed, one D and one incomplete. Hard to be better than that overall, if you can win 3 out of 4 times and get moves that large, you can make more money than you can imagine. Let's hope my views continue to be this good!

My last post that covered Gold could not have been better. I called for itleast $100 down on the day of the high and we have dropped $107 as of yesterdays low. Now what?



I have drawn a horizontal line where I feel there is support in this market, and it is in the 870 area. I do think we will bounce from there. If we don't the huge fraud of this market might finally be revealed. Regardless of what you might read, there is no correlation AT ALL between dropping stock prices and gold prices. Some of the biggest stock drops in history have been followed by huge price drops in GOLD.



I will say this though, it is a cute little fairy tale that has gotten some legs from, I know this will be hard to believe, the people who benefit the most from having it rise! It is the coin dealers and others selling GOLD that are perpetuating this fraud. It is no different from the Real Estate people who kept hyping Real Estate as it rose into the strosphere. Buy now or be priced out forever, etc..



Go ahead and buy it for whatever reasons you might have, just make sure it is not because you think the stock market will continue to decline. If you don't believe me just pull up a chart with the SP 500 at the top and the Continous Gold chart below, and look at all of the extreme decline periods. 9/11 is the only recent period where Gold happened to rise when stocks went down. There is not a consistent relationship here so do not be hoodwinked by these crooks. The best recent line I heard was there is no reason not to pay a $200 premium from the spot price when buying gold coins because we are going top $3000 anyway! I would like to walk in the studio of that dude's radio show and ........ for that discussion he had. Joe Batalia should be called Joe I will Tell you a Tale...ia. Seriously folks is anyone really that stupid that they would pay a premium of that amount on anything in the world right at this point?



Oh wait, I know, IT IS DIFFERENT THIS TIME!

Traveling for a few days so no posts until late in the week. I have revised my call for the March rally to start mid month. I do not expect a big bounce as I stated before, but if we get weakness into that time period, approx the 14th, I will be looking to buy for a short term rally. I expect that rally to be followed by a huge downmove if we even get a rally. When I scroll the S&P 500 I find only one stock that could possibly be a pullback buy, so that tells me that every sector across the board is very weak.

As some of you know that I trade emails with, I have been saying that I think we will get a bounce at the beginning of March. Here you can see the seasonal pattern that has been pretty reliable in recent years.



It is accompanied by a huge amount of divergence in the Pro Go oscillator, which is one of the best accumulation/distribution indicators out there. Ideally we would be undervalued and sentiment would be bearish, neither of those two conditions exist. In fact sentiment is actually pretty bullish the way I measure it, which is bearish for the market. As a result this is far from a perfect setup.



One of my mentors Larry Williams has called for a sharp rally to start about now due to a valuation model that he has that measure bond yields against stock yields. I do not use that but it is a nice tool. When I take all of this into account what I come up with is that I think we will get a rally here possibly into May which if we do could set up a tremendous shorting opportunity. For those of you that have not bailed out of retirement equity positions, this could provide a chance to switch into cash in those accounts.

I will post at some point in the future, where I think we are going bigger picture, which is much lower. However, there is plenty of time for that for now I think we are close to a decent bounce.

Golden Opportunity?

Here is a gold chart of the cash market without prices on it. Sometimes it is nice to take the clutter out and just look at the price to see what it is saying.

As indicated by the line below on the COT data, you can see commercials are selling this rally. That by itself it is not necessarily bearish and can in fact be bullish. However, what we see here is a selling action right at prior highs. When I couple this with a friend telling me the other day that her 9 and 11 year old daughters asked her if she was buying gold, and why not when she said no, I have to conclude this is a top in price. Also, noted famous traders Glenn Beck and Sean Hannity are hawking it on their radio shows. It makes me wonder who else is left to buy?

Tops are made when the market runs out of buyers not when heavy sellers show up. We also have the seasonal tendency for a top right here. At the very least this is a shorting opportunity for a fall of $100 or more. After that whether the buy on the dip is the right play will not be known until it happens and we see how the commercials act on the dip.

Here again we have the US Dollar Index. I have shown up at studios of radio shows and thrown pies in the faces of the hosts at this point for their gloom and doom views of the dollar. I knew when it was under 80 and I was calling for a big move up I was right when I listened to virtually every single other person being bearish.

The short term trading opportunity to short never fully developed properly from my earlier post. Now we are up against last years highs, which is going to provide some short term resistance. I may even short it up here for a short term trade. However, big picture if we take those highs out we could see a moonshot to the upside. This will likely coincide with the stock market taking out last years lows which will further trigger the flight to quality into the dollar which we have seen repeatedly for the last year.

As frustrating as all the things the government is doing is to me with all the bailouts, it is providing great trading opportunities. It is now obvious to me that we just have to bet against the US in virtually everything economically for awhile, so all rallies except the dollar need to be shorted. I am very worried about where all of this nonsense is going to lead us, but I might as well make money from it.

Today provided a wonderful example of Americas finest the PPT at work. We were once again on the verge of a major rollover of the market. We had a gap down open, then rally to partially fill that gap only to fall to new lows. This is about as bearish a situation as you can have intraday.



By "coincidence" this was happening while all the negative feedback about this fiasco called a stimulus/porkulus package is being kicked around. However, the calvary came magically to the rescue once again. If it was not so blatant it would almost be funny. Magically this 5 minute chart demonstrates how in the last 50 minutes a late day save happened driven by some "mysterious" buy program.



This is how the us government manipulates markets and it is never more clear than on a day like this. That is not to say late day rallies cannot occur, but this is not how they look when they are not unduly influenced from the outside. This looks more like a pork belly chart after a government report than it does a normal stock rally at days end.

Enjoy this viewing and feel good about the fact that for a day, your tax dollars were used wisely and had a positive return unlike the returns we are getting over the last year, with their calamatous buying program all the way down which has lost untold millions.

Here we have the US Dollar Index Daily chart with the classic triangle pattern being displayed. The textbooks tell you to play the longside breakout here, and that may be correct. However, if you notice the last time we consolidated at this level we broke to the downside about two months ago, I think if we break below the lower line this is a good low risk short sale opportunity. In trading there are never any guarantees and many trades look silly after the fact when they don't work, this could be one of those. However, I like the fact that the pivots are lower during the last two weeks and that the one oscillator is leading downward as supporting this entry.



I have been bullish on the dollar for awhile and bigger picture think it will rise, but if we break down from here on a short term basis I will be short this market. A break upward just would further confirm the uptrend. I am expecting a bit of a bounce in stocks here this week so this should move opposite of that, which would be down.

Here we have natural Gas, I can't wait for my next bill to come so I can once again argue with the Gas company about how high the price they charge is relative to the spot price which is plummeting.

This is just a basic retracement in a trend setup. It is the simplest way to trade, just wait for trend to establish and enter trades on pullbacks. Based on a few things I watch, I think this pullback is going a bit further so I am not going to short yet, but this market is definitely on my radar. Commercials also have heavy shorts on a relative basis which supports this from a fundamental standpoint.

Same Ol Same Ol





The votes have been cast and the results are in, Obama's PPT is carrying on the same plan to try and stop the drop as W's team did. If you look at the panel at the bottom, the dark black line is the heavy buying of the Large Speculators in the E Mini S&P 500. Keep in mind that this group is generally the accelerator of trends, momentum scale up buyers and scale down sellers. This is the opposite pattern of what is normal as there is huge buying into a significant downtrend, and enormous losses for those doing it.





If you keep in mind the above normal activity what this tells us is that "someone" very large with virtually unlimited buying resources is attempting to stop this downward move in prices. There is only one entity on earth with this type of buying power that can afford to lose this much money and keep buying, our good old friends the US Government. These trades are done through large investment houses like Sachs etc and what better time to do it than now. They have a better scenario for tight lips than ever before due to putting money directly into them. Who the hell would spill the beans in that situation? Nobody!



This does not bother me in the least as I know it exists and if you know how to spot it, you can use it to reinforce your evaluation of the trend. This is a confirmation of the downtrend in this market. Maybe they can pull it off and hold this market here, but I do not believe so. If these levels at the lows do break it is likely we have a large move down coming. I have seen several forecasts from better traders than me calling for choppy action until the fall, which should feature a big drop. I have no idea if they can hold it up this long, but I would be surprised. The latest reports have shown a small amount of commercial buying in the indices, but not enough to warrant a trend change. I am short this market from a few days back and will continue to short bounces when they occur, taking profits along the way.

GOOD AS GOLD

Gold and Silver continue to climb and at this moment there is no strong reason to be shorting Gold, Silver is weaker and is a tad different.

Notice on this chart that one momentum oscillator is diverging and one is not. This is typical in trend moves, oscillators constantly telling you to fade the trend. They are merely tools and need to be used selectively. The 930 - 937 area is a significant resistance zone that if cleared could have this market really off and running.

I have to admit I am rooting against this market due to the ridiculous stream of people telling you on the radio that you have to put your money into GOLD. They cannot find a single world event that in their opinion will lead to anything other than a rapid rise in GOLD. It is no small coincidence that these same people happen to sell gold coins. However, they have been right recently.

British Pound

This chart image is fuzzy, sorry. It is a Daily chart of the Pound. You can see we are in a downtrend with a little bounce happening. A rally up to the 1.4500 area should represent a good short sale opportunity here. I have some propietary indicators not shown, that are lagging this bounce showing underlying weakness not reflected in the price. As a result this market appears due for another drop if we rally another 300 points or so first.

BONDS

My post on bonds was very timely as you can see what happened after my "Sellin Time" comments on this market. We are following the seasonal pattern to a T right now. We are into Weekly support at this point so it would not be a surprise to see a rally here. Some oscillators are diverging at this low so this is a possible long entry area. Bigger picture I think we go down but a bounce should happen in this area give or take a smidge.

GOLD

Instead of me bragging about how great I am as in the last post, in this market although I have traded it profitably, my views of where it was going have been lousy. The red S followed by the dotted line down show the last trade I made which was a short with a nice profitable exit which is the bottom line. However, I have been expecting lower prices in this market and we have not gotten them.

The Weekly chart still shows lower highs so until that is broken we are in a downtrend, but a very choppy one that is hard to trade. There is not alot of commercial selling going on yet so that is one bearish factor that is not in place. If we look at the whole metals sector however, there is an overall bearish position by the commercials.

Ideally for me here I want a push up that serves up a false breakout that reverses down to get short or I will just sit and wait for this to clear up somewhat. There are always opportunities elsewhere. I want to shoot fish in a barrel not in the ocean, and this market is just sloppy right now.