Guideline For Friday

With Janet Yellen testifying before congress on Thursday the market rallied, fueled mostly by the Fed buy programs with nasdaq NQ making a new high. 

The rally should continue, but the rally is slowing down, running out of steam, and may go into a pullback mode in not too distant future.

Friday tends to be a choppy day with a bullish bias, Support for NQ in the morning is 3695.

-- Above 3695 NQ should continue to rally, next upside target is 3725.

-- Below 3695 is an indication NQ is going into a pullback mode.

Key support for ES is 1848-51.

-- Above implies ES rally is going to continue.

-- Below 1848-51 is an indication ES is going into a pullback mode.

Guideline For Thursday

The market rallied up to resistance in the morning, but was not able to push through resistance. Eventually the market sold off in the afternoon down to key support level then consolidated into the close, setting up either another down-leg in the morning on Thursday or rallied back up, and it would depends on where it trades in relation to support and resistance levels..

Janet Yellen's testimony before congress on Thursday is going to generate volatility in the market, so the Fed buyers would definitely be very active in the market.

Support is 2838 for ES and 3670 for NQ

Resistance is 1848-1851 for ES and 3700 for NQ.

-- A break aove resistance could cause short-covering rally,

-- A break below support could cause liquidation drop.  

-- choppy inside the range between support and resistance

Guideline For Wednesday

Both Nasdaq and S&P opened and quickly dropped down to support on Tuesday but the Fed algorithm buy programs kicked in and quickly rallied the market back up, runing-over trailing stop-losses and triggering momentum algo buy programsthat quickly took both NQ and ES ti their respective resistance levels, 1848 - 1851 for ES and 1700 for NQ..

When the buy programs failed to push the market through resistance, profit-taking and momentum algos sell programs pushed the market back down to support.

Again, when the morning support held, short-sellers covers, pushing the market up to rsistance at the closing bell.

For Wednesday key price zone and inflection level to watch for are 1848-1851 for ES and 3685 for NQ

-- More shorts will be forced to cover if price trades above key inflection price zone on Wednesday.

-- Trading below key inflection price zone could attract short-sellers to come back in to sell the market.

First resistance is Monday's swing high., first support is 3670 for NQ and 1838 for ES.

-- If NQ can break and then stay above Monday's swing high, next upside target for NQ is 3725.

-- For ES, a sustained break above 1848-51 could attract momentum algo and should push ES into a new higher high above Monday's swing high.

-- A clear and sustained break below support 1838 for ES and 3670 for NQ could cause a fast liquidation decline, but with Janet Yellen testimony before congress on Thursday, it is a sure bet that the Fed algorithm buy programs would step in aggressively.

Gold continued to rally.

Guideline For Tuesday

The market rallied into higher high in the morning on Monday then pulling back down to support into the close, and it looks ready to rally back up again into higher high on Tuesday, but as long as key support is not clearly broken, a break would be a bearish sign.

The new Fed Chairperson will testify before congress on Thursday. Look for the Fed buy programs to go into high gear to ensure that Janet Yellen would look great when she testify before congress on Thursday. Whether or not they will be successful in pushing the market up, only time will tell.

Key support for NQ on Tuesday is 3680, and for ES it is 1844.

-- Above support price level, look for NQ and Es to run up again into another higher high. Next upside target for NQ is 3725, for ES  1870

-- A clear break below key support is likely to trigger algorithm sell orders targeting next support 1838 for ES, 3670 for NQ.

Gold continued to rally, next resistance is 1360-1380 area.Breaking above 1380 could trigger a fast short-covering spike.

Guideline For Monday

Friday was a pullback down-day for the major averages, an indication that the the market is in a pullback-down mode. Note that the current trend on the daily chart is up, and in an uptrend, pullback normally last 2 to 3 days, but in a very strong trend, and the current uptrend is still very strong, pullback may last only one day before the trend resumes.

Hence, Monday may either be another pullback-down day or a resumption of the current uptrend, and it will depends on where price actions are in relation to key price inflection level.

Price inflection level for ES is 1838, and for NQ is 3670

-- Below 1837 is an indication that ES will still want to go down to other support level, supports are 1830 then 1820 before rallying back up. 

-- Above 1838 implies ES is ready to resume its uptrend, target is higher high, but first resistance is 1844.

-- For NQ, below 3670 is an indication NQ is still going further down to lower support levels, 3660 or 3640-45. before attempting to rally.

-- Rallying back up above 3670, or trading above 3670 is an indication NQ is already ready to make another higher high, with upside target at 3700, but it has to break through resistance levels 3685 before it can get to 3700..

Guideline for Friday

After making a lower-low below Wednesday swing low the market rallied all day into the close, setting up the usual Friday rally.

As long as price action is above key price level NQ and ES should rally to new high. How much higher high will they go is hard to predict, but next upside target for NQ is 3700, and for ES it will be 1855-1860

Key support-resistance price level for NQ is 3662.50 and for ES is 1834.

Guidelien For Thursday

A series of bad economic numbers and the escalating unrest in Ukraine overwhelmed the Fed buyers even after the S&P made a higher high early in the morning. Nasdag NQ was bearish right from the open.

 

The market should opened with a gap-down to support in the morning on Thursday or open and run-down to support. 

ES key support for Thursday is 1820 and support for NQ is 3630. 

-- As long as these support holds, look for the market to rally into Friday.

-- Breaking below key support could trigger more algorithm sell orders.

Key resistance for ES on Thursday is 1832 for ES and 3655 for NQ. 

-- Opening above key resistance or breaking above key resistance is bullish, implies the usual weekend rally has begun.

Guideline For Wednesday

The market consolidated on Tuesday, with ES and NQ both made a higher high above Friday's swing high, but without much shorts left to cover the Fed buy programs was not able to gain much momentum to the upside.

With the FOMC minutes to be released at 2 PM eastern on Wednesday and the upcoming Janet Yellen testimony before congress, the Fed buy programs should continue. How successful will they be will depends on where the various indices trades in relation to their key technical price level.

Key inflection price level for NQ on Wednesday is 3680.

-- Above 3680 is an indication NQ is going to make another higher high, NQ upside target is still at 3700 - 3725.

-- Below 3680 implies NQ is going into a pullback mode, with first support at 3665. A clear and sustained break below 3665 isbearish, next strong supprot is 3630

Key price inflection level for ES is 1840.

-- Bullish above, targeting higher high above Tuesday's swing high. ES upside target is 1870 - 1890.

-- A lear and sustained break below implies ES is going into a pullback mode, first support is 1832. Strong support is at 1822.

Guideline For Tuesday

With the US debt ceiling suspended last week, without much fanfare and media coverage,  suspended for the next 13 months, the Fed is now free to print as much dollars as needed to bail out their member banks and to continue to inflate the stock market bubble, the real estate market bubble and the bond market bubble, designed to make Janet Yellen looks good.

 

With Janet Yellen as the Fed Chairperson, a more trigger happy money printer than Ben Bernanke, the stage is set for unprecedented money-printing episode, so, going forward, look for these 3 bubbles to continue at a faster and faster pace until the dollar collapses.

The other beneficiaries of the upcoming unprecedented money-printing episode besides the stock market and the real market are the precious metals market (gold, silver, platinum) and other real assets. 

The casualty will be the US dollar, to collapse, which would then take down the whole global fiat currency regime and the bond market collapse as traders and investors run away from paper currency to real asset.

The signs of imminent dollar collapse are all around us, such as the dollar falling and gold and silver price rising even with the Fed's gold price price suppression scheme in full force.

Gold has now clearly broken above the down trend line and above the 200-day moving average, setting up a stage for the algorithms to change their trade direction from selling pullbacks to buying pullbacks, and look for the shorts to panic and cover, setting up for the gold price to rocket up or large opening gap-up.

Gold next upside targets for the current breakout is between $1,400 - $1,450, but, on its way to the target price, there is a very strong resistance area to break, $1,350-$1,360, which may or may not cause a large pullback.We must continue to keep in mind that the Fed has unlimited amount of dollars to suppress gold price.

For Nasdaq and S&P and the whole equity market, on Tuesday --- look for the Fed buy programs to continue as Janet Yellen will be testifying before congress sometimes this week, even if there is some selling pressure, as the beginning of the week tends to be bearish.

Support for ES is 1820-1825, for NQ support is 3630-3635.

Guideline For Friday

Another upday, another higher high in NQ and ES on Thursday as shorts continued to get sqeezed by the Fed buy programs ahead of the long weekend (the market will be closed on Monday).

By the end of the day on Thursday most shorts have covered so unless the Fed continues to buy, the market may be ready to pullbackdown or consolidate on Friday.

Key price level to watch for on Friday will be 1824 for ES and 3650 for NQ.

-- Rally will continue above 1824 for Es and above 3650 for NQ.

-- Consolidation or downtrend below key level, ES supports are 1818, 1810, for NQ supports are 1835, 1825, 1815.

Gold has now broken above key resistance 1300, with the next resistance at 1320 and 1350. If the Fed gold suppression team fails to push gold back down below 1300 gold can explodes upward very quicky as the shorts get runover.

Watch 1300 as key price level for now.

1929 and 2014 charts overlay

This is the chart that has been passed around by traders, the chart that was discovered by Tom Demark, showing uncanny similarity between the 1929 stock market crash and the current Dow chart pattern.

After a brief recovery from a minor stock market selloff in 1929 the Dow nosedived 33% in just 2 weeks, The stock market crash took the Dow down 89%.While history does not repeat itself it does rhyme. Here is another variation of the same chart.

 

Guideline For Thursday

The equity market consoldated ahead of another testimony by Janet Yellen, this time testifying to Senate banking committee. 

But late day on Wednesday it was announced that Yellen testimony has been cancelled due to heavy snowstorm conditions in the area, and the new date for her testimny has not been announced.

 

Whether or not the Fed Buying Team would be very active now that Yellen's testimony has been postphoned, is difficult to say, but without Fed buyers the market may pullback down to supports.

Key inflection price level to watch for is 1815 for ES and 3625 for NQ

-- Bullish above 1815 for ES and above 3625 for NQ, implies the amrket is ready to trend up again, just like Tuesday.

-- Trading below key inflection point is an indication the market is still in consolidation mode. As long as any decline does not get too large the market should rally after finding support.

-- First supports are 1810 for ES and 3610 for NQ

-- Second support are 1790-1795 for ES and 3535 for NQ

Guideline For Wednesday

With the new Fed Chairwoman testifying to the financial services committee on Tuesday it was easy to predict that the Fed would continue to push the stock market up just to make Janet Yelling looks good 

 

The Fed buying binge should continue for a while, with or without any pause, to ensure that major US stock market indices, the Dow, the S&P and the Nasdaq would make another higher high. NQ was just several points shy of the recent high, so for NQ a new high could easily be achieve on Wednesday, while the Dow and the S&P has several layers of resistance to break through.

With the Fed having to print so much dollars to buy the stock market and to buy back US Treasury bonds being dumped by world central banks, gold suppression scheme is starting to unravel. Make no mistake, the world central banks are dumping US dollar treasury notes and bonds ahead of the "Currency Reset" and the loss of US$ status as the world reserve currency, to be replaced by some form of a gold-back world currency. 

On Tuesday we had gold breaking out above key resistance 1280 that has been holding recent gold rally, with the next key resistance is 1300. The Fed would definitely try their very best to suppress the price of gold, but, a clear and sustained break above 1300 is likely to trigger massive short-covering rally, possible with huge opening gap up, that could propel gold very quickly to the next resistance 1380 and then 1440.  

Key support for Wednesday are 1810 for ES and 3600 for NQ

-- Above key support level implies the uptrend is continuing, target is higher high. For ES resistances are  1820, 1827-1830 and then previous high 1846.

-- A clear break below key support level is an indication the buying frenzy is taking a pause, letting the market to consolidate before pushing higher. ES support are 1790-1795, NQ support is 3535-3540.

Guideline For Tuesday

With theFed continuing to hold the equity market up with their endless buy programs they are starting to lose control of the gold market. 

 

With so many short interest in the gold market a continual rally in gold could easily trigger unexpected panic short-covering rally that can cause gold to spike up uncontrollably. Uncontrollable rally in gold price will put a limit on the ability of the Fed's to print as much dollars as they would like, so it could be bad for the stock and the bond market.

For Tuesday key price level for ES is 1795 and for NQ key price level is 3580

-- Bullish above 1795 for ES and above 3580 for NQ.

-- Resistance for ES are 1810 and 1820, support are 1790 and 1765

-- Resistance for NQ are 3595-3600 and 3630, support is 3535

Guideline for Monday

On Friday, massive buy programs engineered by the Fed before the open designed to trigger short-covering panic sent the indices higher at the open and rallying into the close.

We must keep in mind that there is a war between the Fed on one hand determined to inflate certain class of assets and the global deflationary force on the other hand pushing everything down.The battle should continue until the whole fiat currencies collapses as we are now starting to witness several currencies such as the Argentinian pesos, Venezuelan Bolivar, the Turkish Lira and the Indonesian Rupiah (just to name a few), beginning to collapse, but it should continue to spread

The markets closed near resistance on Friday, so unless we can clearly break and stay above resistance, look for the market to pullback in the morning or in the afternoon. Most shorts have covered on Friday so the fuel for any sustained rally has to come mostly from the fed buy programs.

Key resistance for Monday are 3575 for NQ and 1795 for ES.

-- A sustained break above 3575 implies a rally up to the next resistance  3595.

-- A sustained break above 1795 for ES target a rally up to 1810.

Below key resistance implies the market is going into a pullback mode. As long as pullback does not turn into a freefall the rally should continue back up.

Supports for NQ is 3530-3540, and 1770-1775 and 1765 for ES

Guide For Friday Feb 07

Massive Fed buy programs on Thursday designed to panic the short-sellers forcing them to cover in order to induce short-covering rally ahead of the all important employment reports before the open on Friday.

It is certain the Fed will be ready with buy programs on Friday, and it is a well-known fact that the Fed manipulates all markets, be it the stock market, the bond market, or the gold market, etc, whether or not they can push the stock market higher on Friday only time will tell but the result will be known before the market open on Friday. 

Regardless of what they will do, key price level to watch for on Friday will be 1770 for ES and 3500 for NQ

-- Above key price level is bullish, next resistance for ES is 1790-1790, for NQ next resistance is 3540.

-- Bearish below key price level, supports are 1750 and 1732 for ES and 3475 and 3420 for NQ.

Guideline For Thursday

The market tanked hard in the morning, making a new lower low, but then allied up to above morning high, closing near the high of the day for both NQ and ES, now two consecutive consolidation days following a large down-day on Monday

There can be 2 or 3 consolidation/pullback days following a large trending down-day. 

-- If the market only needs 2 consolidation/pullback days then Thursday should be a trending-down bearish day closing near the low of the day.

-- If we need another consolidation/pullback day, to make it 3 days in a row, then Thursday will be another consolidation/u[p days,

Key inflection price level for Thursday is 3455 for NQ and 1746 for ES.

-- Above key inflection price level implies another consolidation/pullback up day. Resistance for NQ are 3480 - 3490, and 1751 - 1755 and 1762 for ES.

-- More selling below key inflection level, with first target below Wednesday swing low.

Latest Investor's Intelligence Bull-Bear Spread report is still showing there is more room for the market to drop lower.At the last pullback low the reading was about 13.4%, current reading is still around 30%, so there is still some room for the market to go lower before the we can expect the low.

At the 2010 and 2011 pullback low, the reading went into negative 10 before the market found a bottom. Here is the latest chart showing Bull-Bear difference.

Guideline For Wednesday

As expected Tuesday was a narrow-range consolidation day following a very bearish wide-range down day on Monday. 

For Wednesday we either get (1) another pullback up-day or (2) a resumption of the downtrend, and it will depends on where it trades in relation to its key price inflection level.

For Wednesday, key price inflection price level is 3455 for NQ and 1744 for ES

-- Trading below is an indication that the downtrend is likely resuming, with key support to break through at 3430 for NQ and 1738 for ES.

-- Next support for NQ is 3400, 1:1 downside target for NQ is 3362, next support for ES is 1720 and 1:1 downside target for ES is 1710. Whether or not support will hold will depends on the momentum of the drop, and whether or not the Yen is confirming the drop.

-- Trading above key inflection price level is bullish, with the next upside target is a break above Tuesday's swing high.

-- Resistances are 3480 and 3500 for NQ and 1765 and 1770 for ES

Guideline For Tuesday

As global credit contraction continues to intensify causing key carry trade funding currency the Japanese Yen to strengthen, triggering the unwinding of the carry Trades, resulting in global stock markets selloff on Monday. 

NQ dropped about 100 points on Monday while S&P dropped over 45 points, with major indices all closing near the day low.

This type of very large down-day is normally followed by a narrow-range consolidation day prior to resuming the downtrend, but with the declining momentum so powerful on Monday, it will not be abnormal for Tuesday's to be another large-range down-day, but we will just have to wait and see.

Key support level to watch for on Tuesday is 3430 for NQ and 1735 for ES. Also key market to watch for is the Japaneses Yen and the yield on the 10-year treasury note, key yield at 2.6%

-- Breaking down below key support is an indication the market is still in freefall, NQ next support is 3400, and NQ 1:1 downside target on the daily chart is 3362. 

-- Next support for ES is 1720, ES 1:1 downside target on the daily chart is 1710.

Guideline For Monday - February 03

A gap-down open last Friday gave short-sellers opportunity to exit their short and reversed long ahead of the long weekend with the usual profit-taking drop at the end of the day.

The direction of Monday morning trend will depend on where it opens and trades in relation to key inflection price levels, 3510 for NQ and 1782 for ES.

Bullish above 3510 for NQ and above 1782 for ES, with key resistance at 3535 for NQ and 1788 for ES. 

-- A clear and sustained break above key resistance should trigger short-covering rally. A falsebreak should trigger a fast trend reversal, targeting a break below Friday low.

Bearish below key inflection price levels, an indication that the downtrend may be resuming, first downside target is a break below Friday swing low. 

-- Supports are 3495 and 3455 for NQ, and 1765-1768 for ES

Carry trades is the main key determinants of trend direction for the US stock market.