My review of the latest two trading days is brief this evening, and mainly by way of two charts as found below that speak clearly. In a nutshell if anything, my previous forecast of a new emerging trend down is being reinforced.
As for any financial news, yesterday's FED announcement was largely a non-event, and Mr. Bernanke had no new monetary inflationary rabbits to pull our of his magical FED hat. The news release can be found here.
Perhaps more important from a financial news perspective, is to watch the USA dollar versus the Euro. The fragile sovereign debt situation in the Euro zone is ongoing. These financial flair ups can create further short term volatility, and significantly impact currencies and global bond yields which have been rising faster than most expected.
As for the trend truth and the most important technical perspective, the record high in the SP 500 at about the 1246 price level was set Monday December 13, 2010. Thus, it is still too soon for a change in trend (CIT) to suggest a fully confirmed down trend is in place. Trend traders usually wait a few days for the trend to get established and be visually confirmed using technical clues.
After all the high was just two days ago and therefore still to early for technical confirmation. Although frankly, today's bearish trend reinforced and followed along nicely with my previous cycles forecast (CIT December 13 - 15), the Fibonacci event demonstrated weeks ago, and even the planetary Gann Astrology set-up found in the Astro-sky challenge.
Of paramount importance, this is one of the rarest of financial blogs that also forecast with the benefit of considerable and powerful cycles knowledge. As the great W.D. Gann pointed out approximately 100 years ago, time (not price) - is the master control factor, and the financial markets including equities follow exact rules of science, or as Gann then expressed - Natural Law.
In summary, all of the cumulative evidence I have reviewed recently, including powerful cycles data, suggest that a change in trend (CIT) to down has already taken place. As one chart below shows, a mechanical method of trading using the Net New Highs of the NYSE also confirmed a short-term down signal today.
However, I should advise that possibly working opposite and against my short-term bearish forecast, of an immediate downtrend getting underway now, I observed that the marginal sell-off in the SP 500 today looked very controlled.
This could suggest that Wall Street traders, and highly influential powers including large hedge funds, or even the PPT, have very large bull-side bets placed on the recent bull trend until triple witching expires this Friday.
As one additional item, I was surprised to see that very few blog readers actually took the time to watch the video web link posted in my last blog. I believe this highly important video speaks volumes and is essential viewing to understand some of the coming events now besieging America, and perhaps becoming even more important in 2011.
Again, that video which I titled as Wall Street Crooks can be found by clicking here.
James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
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