Trade Guideline For Wednesday (Nasdaq NQ)

Nasdaq 100 futures made a higher-high above last Thursday swing high with a large gap-up open on Tuesday, but the broader market index S&P 500 did not made a high-high. The current uptrend is slowing down and likely going for a larger decline, a reversal-down.

Key level for NQ on Wednesday is 2455.

• Above 2455 implies NQ's uptrend is still in progress.
• Below 2255 implies larger decline or potentially the beginning of a reversal from up-trend to downtrend on the daily chart. 

Trade Guideline for Tuesday (NQ)

Monday was a reversal-up day, with the open near the day low and the close near the day high just above key inflection level, 2455. For Tuesday:

• Above 2455, the market should continue to rally up to the next resistance level 2465. A sustained break above 2465 could potentially trigger a short-covering rally that could push price up to re-test Thursday's swing high.
• However, a break-back below 2455 implies more consolidation decline, targeting the first support level 2435 then 2420.

European sovereign debt crisis should continue to dominate the financial news. Besides Greece, Portugal is now also looking to restructure its debt.

Trade Guideline for Friday (NQ)

Thursday was a reversal day with the open near the day high and close near the day low. Key inflection point for Friday is 2450.

• Below 2450 implies a potential follow-through down day, targeting a break below Thursday swing low, with first support zone at 2435-2437 area.
• Above 2450 implies a rally to first resistance at 2460. A clear break above 2460 implies a potential re-test of Thursday's swing high.

The Fed confirmed that they will keep shortterm interest rate near zero percent until mid 2014 via more currency creation.

Trade Guideline for Thursday (NQ)

Another up-day on Wednesday. If the uptrend is going to continue immediately, any pullback should stay above 2455 area, targeting 2475.

A break below 2455 implies the market is going into a larger pullback mode before rallying back up. Pullback target down is 2445.

Trade Guideline For Wednesday (Nasdaq NQ)

Tuesday's earning reports after close rocketed the market up in after hours trading. 

For Wednesday if price can stay above 2450 area the uptrend should continue up, and we can likely see a strong one-direction up-trending market. Next target up is 2265, then 2475.

Breaking back below 2450 implies NQ is in a pullback mode with the first target down to 2435.

Trade Guideline for Tuesday (NQ)

Another ranging consolidation day on Monday. Key inflection level for Tuesday is 2435.

• Above 2435 implies a re-test of Monday high, either lower high or higher high. A lower high implies it may want to reverse back down and tank.
• Below 2435 implies the next down-leg is in progress, with first target down is a re-test of Monday's swing low. A clear break below Monday low may run-over some stop-loss, and has the potential to trigger a fast liquidation drop, targeting 2400 or lower.

DJIA to Fall 4,000 Points in 2012, Granville Says

Jan. 23 (Bloomberg) -- Joseph Granville, a technical analyst who has been publishing the Granville Market Letter from Kansas City, Missouri, for more than 40 years, talks about the outlook for the U.S. stock market. He speaks with Adam Johnson on Bloomberg Television's "Street Smart." (Source: Bloomberg)

http://www.bloomberg.com/video/84758540/

The Evolution of the US Dollar

Martin Armstrong

http://www.fullfaithandcredit.com/files/US%20Dollar%20Evolution%2001-17-2012.pdf

Nominal GDP targeting: economic buzz phrase of 2012

Jim Rickards thinks that nominal GDP targeting will be the big "new" Fed policy for 2012, whereby Bernankie and Co target certain percentage increase in US GDP as a means of weakening the dollar.

http://www.goldmoney.com/gold-research/newsdesk/nominal-gdp-targeting-economic-buzz-phrase-of-2012.html

Gold and silver prices regaining altitude on stimulus rumours

" Credit Suisse speculated in recent days that the next "Long-Term Refinancing Operation" conducted by the ECB could involve as much as 10 trillion Euros worth of loan to the eurozone banks".

In a similar vein, markets are growing increasingly hopeful that the fed could be on the verge of announcing a dramatic new stimulus plan, with Reuters reporting potential inflation targeting and the "bigger" hope for markets is that Bernankie will soon unveil plans for nominal-GDP targeting - a form of perpetual quantitative easing that would be insanely bullish as far as precious metal prices are concerned.

Link for full report:
http://www.goldmoney.com/gold-research/newsdesk/gold-and-silver-prices-regaining-altitude-on-stimulus-rumours.html?gmrefcode=dollarc

Trade Guideline For Monday (Nasdaq NQ)

Friday was a narrow-range (ranging) day typical of options expiration day.

For Monday key inflection level is 2430, support 2425, resistance 2435.

• Above 2435 implies the next leg up is in progress, targeting 2450-2460.
• Below 2425 implies it is still in consolidation mode, targeting a decline down to 2410-2415, then if that does not hold, next target down is 2400 - a strong support zone. The market needs to be very bearish to crash down through 2400.

Trade Guideline for Friday (NQ)

On Thursday the market opened gap-up then ran-up in the morning before consolidating then selling-off at the end of the day.

Key inflection point for Friday is 2435, resistance 2450, support 2420.

• Above 2435 implies the next upleg is in progress targeting 2450.
• Below 2435 implies NQ is still in a pullback mode, with first support at 2420, then 2400.

European debt crisis continues to dominate the financial news.

The Debt Supercycle Reaches Its Final Chapter

"By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens". --- John Maynard Keynes


http://www.financialsense.com/contributors/james-j-puplava/debt-supercycle-reaches-its-final-chapter

Trade Guideline for Thursday (NQ)

Shorts capitulated into the close. For Thursday it either continue to trend higher or pullback down first before resuming the uptrend.

Key inflection point for Thursday is 2415, with first resistance at 2425, and first support at 2400.

• Above 2415 implies the trend is still in progress, next target up is 2425. A clear break above 2425 may trigger another round of short-covering spike.
• Below 2415 implies it is going into a pullback mode, target 2400 support. A clear break below 2400 implies a larger pullback, next support below is 2380-2385

Trade Guideline For Wednesday (Nasdaq NQ)

Markets opened gap-up, but stalled at resistance. For NQ that resistance was 2400, and 1300 for the S&P futures.

2400 become key resistance for Wednesday, and 2380 as key support.

• Above 2400 implies the next leg up is in progress, and next resistance up is 2425.
• Below 2400 implies NQ is in a consolidation or a pullback mode, targeting next support 2380, then 2365

London Trader: Staggering Gold demand Creating Shortages

"The demand for euro gold here in London is so intense it is shocking to some of the players".
Link: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/1/17_London_Trader_-_Staggering_Gold_Demand_Creating_Shortages.html

Greece Is Insolvent, Will Default on Its Debt, Fitch Says

From Bloomberg: Greece is insolvent and probably won't be able to honor a bond payment in March.

http://www.businessweek.com/news/2012-01-17/greece-is-insolvent-will-default-on-its-debt-fitch-says.html

$10 TRILLION Liquidity Injection Coming? Credit Suisse Hunkers Down Ahead Of The European Endgame

From Zero hedge: http://www.zerohedge.com/news/10-trillion-ltro-coming-credit-suisse-hunkers-down-ahead-european-endgame

Incidentally, those curious what a €10 trillion expansion to the ECB's balance sheet without a proportionate response by the Fed, would do to balance sheet correlation, and implicitly, to the EURUSD pair

Banks say no deal on Greek debt, talks stalled

AFP Jan 13, 2012, 10.54PM IST

"WASHINGTON: Big banks have failed to reach an agreement to slash Greece's debt burden, a group representing the financiers said Friday, announcing high-level talks had broken down.

A proposal to write-down a substantial portion of Greece's debt "has not produced a constructive consolidated response by all parties," the Institute of International Finance said".

The bondholders of Greek debt wants Greece to default in order to trigger their CDS contract and receive 100% payment instead of taking a huge hair cut. Although the CDS issuers (New york Banks) don't have the funds to pay for their obligations, it is certain that Federal Reserve will create new money to pay for the CDS contract on behalf of the NY Banks, because the Fed knows that the money will come back to the US to buy US debt.

According to some reports the Fed has already given the European Central Bank at least $1 trillion via SWAPS which they can leverage to $10 trillion or more. The leveraged funds would then come back to the US to buy US debt. The amount is enough to delay the endgame by up to one year.

This indirect money-printing by the Fed is bullish for the equity markets, commodities, gold and silver, etc. It is also bullish for longterm bond, as this is part of the "twist" program recently enacted by the Fed. With that amount of extra liquidity, it is possible for the Fed to drive the US longterm interest rates down much lower that what it is now. 

• The risk to this extraordinary amount of money creation is very high inflation and eventually hyperinflation.
• The risk of not creating enough money is deflation and eventually hyperinflation.

 Either way, the west is doomed. The path to hyperinflation will depends on the path the governments of the west will take. It is either inflation then hyperinflation (currency collapse) or deflation then hyperinflation (currency collapse).

 

ZOMBINOMICS 101: LBO Job Creation

STEP 1: Find underpriced and under leveraged public companies that are generating tons of excess cashflow. Borrow tons of money to purchase them and take them "private." Pay yourself tons of closing and management fees.

STEP 2: Strip and sell off non-core assets. Maximize operating efficiencies (a euphemism for restructuring the workforce, i.e., you’re fired!) in order to service tons of new debt, pay yourself ongoing management fees and special dividends.

STEP 3A: Wait for the right opportunity to exit via a strategic sale or IPO. Collect more fees. Fire some more employees for good measure.

STEP 3B: Blow the company up and liquidate everything. Collect more fees. Fire all the empoyees.

STEP 3C: Bankruptcy– pass the whole piece of junk your distressed asset team. Collect more fees. Somebody’s going to get fired.

Job Creation: Hire more associates and analysts to look for more LBO deals.

Trade Guideline for Friday (NQ)

Multiple market indices including the ES and NQ are now hitting their respective resistance levels. Given the slow and low volume nature of the rally since mid-December 2011, the market either rocket up through resistance levels and take out all the stops, or pullback down to support before rallying up again and break through resistance. But key support needs to hold on any pullback if the market is going to rally again to new highs.

For Friday, NQ inflection point / mid congestion zone is 2370.

• Above 2370 implies it is going to the next upside target of 2400 area.
• Below 2370 implies more consolidation down to 2360, or a larger pullback below 2360 to the next support level of 2340-2345.

European Debt crisis Continues

Trade Guideline for Thursday (NQ)

2370 is key inflection point for Thursday.

• Above 2370 is likely to trigger another round of short-covering rally, pushing price up above the last swing high for another leg up, targeting 2400.
• Below 2370 implies more consolidation or a larger pullback down to 2355. A clear break below 2355 is likely to run-over stoplosses, pushing price down to the next support 2340. A strong sell-off can push it lower.

Trade Guideline For Wednesday (Nasdaq NQ)

Another bullish day, and another leg up on Tuesday with a close at support 2355-2360. Resistance for tomorrow is 2370.

• Above 2370 implies the next leg up is in progress, targeting 2400.
• Below 2355 implies a larger correction is in progress, targeting a decline down to 2340 to re-test the breakout level. If that does not hold the enxt support below is 2325.

Gold to be Bold in 2012 with its Own Contracting Fibonacci Spiral

Tue, Jan 3 2012, 10:07 GMT,  By David Petch  - Treasure Chests 

Highlights:

• Gold to rally and top 2013 at just below US$4,000, on its way to US$10,000 by 2020.
• Gold to rally and top again in 2016, 2018, 2019, and 2020, with sharp and violent corrections in between rallies

“As analysis will show today, the US Dollar still has another 3-4 weeks of sideways to upward grinding upward price action. Sideways to slightly negative markets at the end of January will convince most that the year will end lower than this year and that deflation is going to kick in. Everything travels in waves and will continue to follow course until conditions have been satisfied for a reversal to occur.

There are a few interesting points to note:

1) At every time point on the Fibonacci spiral thus far, each subsequent point in time has reached a higher high and on the same note, each gain has been smaller and smaller on a percentage basis than the prior move (e.g. DOW at 40 in 1932 to 995 in 1966 versus any other time period examined...nearly 44 fold higher during the above time frame).

2) Each top has been followed by an excruciating decline of at least 40-50%...this cycle calls for tops, not bottoms.

3) Each point of the contacting Fib cycle is more condensed than the former, so ergo, volatility will increase as we continue to reach the point of singularity nearing 2020-2021.

4) The collective human psyche is driving this cycle...all events that occur on an individual basis be it personal success or failure, deaths, births, accidents wars etc. etc. are randomly occurring while the cycle tops are like towns on a road map with a train holding a constant speed between them...the destination will be reached at a particular point in time and what happens to people on the train during the trip does not affect the outcome of reaching the destination. Like anything, this cycle could be stopped by a nuclear war, asteroid hitting the earth or any event as large as those mentioned...cycles can be stopped, but recognition that we are in a large cycle nearing completion is worth taking note over.

Because the broad stock markets are trapped in a spiral does not mean that tops are limited to other sectors. Here is another revelation I just had as I finish my third cup of coffee...gold bottomed around 2000 and topped in 2008....that is approximately 8 years... September 10, 1999 was the low and May 1, 2008 was the high....this represented 3156 days, or 8 years, 7 months and 21 days (7.5% above the perfect value of 2922 days for an 8 year time frame). If we take 61.8% of this value, then the next top for gold is due on Monday September 2nd 2013...If we put +/- 5% onto this and assume that it will be earlier rather than later (due to the first part of the cycle), then the earliest expected top is February 25th, 2013. Since the first leg was longer than 8 years by 7.5%, it is more than likely the end of January 2013 is a target date...it could occur nearer to mid January 2013, but this is the time frame to expect action.

The above is an observation, but it is rather interesting that gold is operating on a smaller Contracting Fibonacci Spiral Cycle that is in synch with the larger Contracting Fibonacci Spiral the markets are in. Adding together the sum of parts, the price of gold will move up in price in 2013, 2016, 2018, 2019 and 2020, with each subsequent leg moving less in percentage terms than the prior move. Gold advanced 4 foldish from 1999 until 2008 ($252/ounce to $1046/ounce). This suggests that gold should top out below $4000/ounce over the course of the next year (Personally, the highest I think it can reach is $3074/ounce). The price of gold is likely to top out near $7-10,000/ounce by 2020, but each advance will be lower in percentage terms of the former leg.

I thought I would share this thought with everyone, because the cycles the markets are presently in will be difficult to navigate. So, as many over the next month come out with some new but rare fish head pattern or something like that, remember that all markets are interwoven and that the principles of Fibonacci are throughout nature. The cycle we have been in since 1932 has dates locked in, with all events randomly occurring. When late 2012/early 2013 arrives, remember to take money off the table. Everyone, including fish head guy will be screaming hyperinflation, when in fact the exact opposite (deflation) will be in place.

I have mentioned this enough over the past six months so any future articles will simply be index related. I wanted to post this gold info to illustrate that the principle behind the Contracting Fibonacci Spiral is not a one-off thing, but likely to be seen in many other examples in history, either as a pure number or some transformation based value."

Links to the articles below:

http://www.fxstreet.com/technical/analysis-reports/futures-market-update/2012/01/03/

http://www.munknee.com/2012/01/contracting-fibonacci-spiral-puts-gold-near-4000-by-2013-and-7-10000-by-2020/

Trade Guideline for Tuesday (NQ)

A sideways consolidation day on Monday, a setup for a bigger move if price can breakout of the consolidation range, or a narrow-range day if price failed to break out and stays out of the range. NQ is still in an uptrend, with the fed and the ECB money-printing intensifying the trend bias is up and will remain especially so above 2325 key support.

For Tuesday I will use 2350 as key inflection point.

• Bullish bias above, and a trending up move if it can break and stay above 2355 resistance. If so, the upside target is 2400.
• Below 2350 implies a bearish bias, and a trending down move if it can break below 2340, targeting a decline down to 2325.

Trade Guideline For Monday (Nasdaq NQ)

With Iran threatening to close the Strait of Hormuz when the west starts to impose oil embargo on Iran, and the US threatening to open it if Iran decides to close it, the war between the west and Iran is getting closer by the day.

The Federal Reserve and the ECB are now using the looming war as an excuse to intensify their money-printing business because they need the money to support the collapsing banks and countries in Europe. Will the market continue to go up as a result of the continual money printing, only time will tell as the European banking system is fast imploding, which  can easily overwhelmed the best effort of the Fed and the ECB. But as long as the indices can stay above key support levels, the current trajetory (uptrend) should continue.

For Monday I will use 2340 as key support level.

• Above 2340 implies the current uptrend should continue, with next target up at 2400.
• Below 2340 implies a larger pullback down, targeting 2325, then if that does not hold, next support is 2300.

Trade Guideline for Friday (NQ)

A clear and sustained break above 2325 on Thursday triggered a short-covering rally that lasted most of the day, then closed right at key inflection point for Friday.

Key level for Friday is 2340.

• Above 2340 implies the next up-leg is on its way, targeting a move up to 2365-2375 area.
• Below 2340 implies it needs more consolidation before breaking back up. Consolidation target down is 2325-2330. A clear break below 2325 implies a larger pullback down or a trend reversal.

Trade Guideline for Thursday (NQ)

On Wednesday, market opened gap-down to complete it consolidation, then rallied up for the rest of the day, closing just above key resistance 2325. European debt crisis would continue to dominate the financial news.

• For Thursday, staying above 2325 implies the next leg up is underway, targeting 2340, then 2365-2375.
• Below 2325 implies another pullback prior to breaking out, or reversal back down. A pullback should stay above 2300 support. A clear break below 2300 implies NQ is in a reversal mode, if so targeting a decline down to 2275-2285

Trade Guideline For Wednesday (Nasdaq NQ)

Large gap-up opening on Tuesday triggered short-covering rally, but failed to attract serious buying programs, failed to clearly break above 2325 resistance. It then spent the rest of the day consolidating. If consolidation is complete, we should see another push above 2235 to the next resistance level.

For Wednesday I will use 2325 as key inflection level. 

• Above 2325 implies another upswing, targeting 2365-2375 price level.
• Below 2325 implies NQ is in still a pullback mode, targeting a decline down to 2285

Trade Guideline for Tuesday (NQ)

Normal trading should resume on Tuesday, and I will use 2275 as key inflection point.

• Bullish above 2275, targeting a move up to 2325-2325
• Bearish below 2275, targeting a decline down to 2225-2235

Trend should stay below resistance and above support. To breakout above resistance or below support would require extreme market internals.

A key Washington insiders has indicated that the Federal Reserve is planning a massive money-printing program in 2012, a form of quantitative easing that would be call by a different name, such as "GDP Targeting".

"We are going to kill the dollar"

Investor Kyle Bass discloses his discussion with a senior Obama admin about how this economic crisis is going to play out. The answer is to export our way out of this mess by making our exports cheaper by destroying the dollar in a global game of currency devaluation. This simply means that they are going to print more and more dollars until all of your purchasing power is destroyed and you will need more and more dollars to buy the same amount of goods. (ie. Massive Inflation.)

Link: http://dont-tread-on.me/?p=11919

2012 - The First Trading Day (Monday)

Who will the US Presidency this year will determine what will happen to the global economy;

• Ron Paul Winning the US Presidency = Massive Deflation/Depression/World Peace

• Mitt Romney/Obama/etc.. Winning = Massive Money Printing/Dollar Devaluation/Hyperinflation/WW3