i-Trader

T-9 Days and Counting - Reflex Rally Setup?

T-9 and New DJ 2004 Low Friday the sellers were out again, pusing the DJZ4 to new lows for the year while the broader SPZ4 and NDZ4 held up relatively well. The US bonds, notes and dollar continued their recetn trend moves as well with the interest-rate instruments testing or exceeding their intra-year highs.

This coming week is crucial for the US equity markets and I believe there are technical similarities now the the earlu-August 2004 time period. Recall at that point, on 08.15.04 I stated that the DJ was set up for a minimum 200-300 pts reflex rally. Once again the market is at or near a similar setup. Major support for DJZ4 is at the 9620-9720 area. Monday, 10.25.04, watch the tape for signs of decreased selling pressure (ticks, advance-decline, etc) as well as continued divergences with the NDZ4 and SPZ4. A break of Friday's 9741 low and reversal back through 9760 on improving tape action would be the first sign of stabilization.

Also, watch the US bonds/notes and US dollar for early signs of reversals. The positive action in the interest-rate instruments was rather muted Friday considering the performance of equities and the US dollar. The US dollar, with regards to a few currencies - especially the Euro - may be in a blow-off phase.

Bottom line, US equities are setup for at least a 200-300 pts reflex rally after setting a bottom that should occur in the next 2-5 days. The US dollar is also near an important short-to-intermediate term low and US bonds and notes, short-to-intermediate term highs.

10.21.04 - T-12 Days

Tick, tick, tick... The DJZ4 moved within 20 pts of its early-August lows yesterday and held. The US dollar continues to succumb to selling pressure while the Euro is at its highest level since mid-February after breaking out of a 7-1/2 month range last week. The US notes and bonds are also testing the 2004 high levels. So, with less than two weeks to go until the US Presidential election, will the US stock market break? That's not a constructive environment for the incumbents. Stay tuned, but it looks to me like an inflection point is very near. The DJZ4 needs a close above 9990 to stabilize, the USZ4 below 11216-11224 and the US dollar above 8740.

08.04.04 - Oil - How Long?

OPEC Running on Empty? I found an interesting article in the latest issue of Popular Science magazine. Anyone familiar with the Hubbert curve?

It seems like many traders believe that oil is considerably overvalued and continue to short the recent breakout of a 2-1/2 month short-term consolidation. The upside target for CLU4 (Sep crude) is the $48-50/bbl level. However on a longer-term basis, the move may be in its infancy. On a real basis, crude would need to trade up to $60-90/bbl to match the highs set at the onset of the Gulf War and in the late 1970s.