Taylor On US Markets & Gold
Financial Markets
Trader Rog's Corner
Appearances and Deception
"A long habit of not thinking a thing wrong,
gives it a superficial appearance of being right."
- Thomas Paine, Common Sense
Investors and traders who watch the regularly scheduled "jobs report"
clearly understand what to expect days before the event. It arrives with
great fanfare and trepidation. Immediately, the bond markets react and
pre-market S&P trading accelerates, providing high drama and great fanfare.
This circus event is a pretense of fabulous new employment but in reality
is an apparition. It is only a disguise or semblance of a false show. This
is the grand fog, the smoke-and-mirrors ceremony, a prelude to the shearing
of the Sheeple by the hedge funds enabling them to exit with profits while
wooly little lambs stand crying in the rain with their bombed out stock
accounts, not having a clue as to what just hit them. For the big boys to
get out you need a rally. If you do not have one, you make one. That is
what today is all about.
Considering all the crash-and-burn charts we have been reviewing lately, I
knew it was time for something really fabulous preventing a major selling
slide so imminent, a child could see it coming. After the closing bell, a
broker cheerleader was loudly extolling the virtues of this fabulous
market, proclaiming the second coming of "big cap stocks" and the
wonderfulness of our Dow and NASDAQ poised to spring to the moon. He was so excited and irrational, it's a wonder he didn't hurt himself. I was so glad I had not just eaten or I might have returned my dinner.
It was all so obvious prior to, that I didn't even bother watching the ceremony already knowing the conclusions last week. They had to do this or
you might have seen a Black Friday today. All those big index markets had
double or triple topped while prices were scraping on the bottom near major
support levels and you could smell the raw fear in television interviews
taken with wise old men who have seen this all before; many more than once.
Dow Jones Industrial Average: Closed at 10947 +114.47. Price bar jumped
above overhead resistance and closed on an up bar saying they will do this
again on Monday, March 7. Volume was cut in half from previous days as
chart indicated. PMO lines were up, but touching. The 200-day is 10394.53
and next main support is 10600, then the 200-day line. Expect more buying
on Monday and selling beginning on Tuesday. The rally looks like a three
wave, which means more power to come. Volume tells us there is no
follow-through, so we shall see. This market has some more jumping around
at higher levels before the selling comes to us in earnest. Short trend is
up; intermediate trend is up; and long trend is down. Gunslinger daytraders
will make some cash here while the rest of us had better stand aside and
hunker down.
S&P 500 Large Cap Index: Closed at 1222.08 +11.61. Price bar closed above
resistance and finished at bar's top. This means more buying on Monday.
Unlike the Dow, volume was strong, showing us how the PPT can hammer the
shorts and buy handfuls of S&Ps to prop things up. This is the market
easiest to manipulate. Chart shows a double top with today's bar above the
resistance. This too, looks like a three wave up with more buying to come.
Short and intermediate trends are up, and the long trend is down. This is
no place for amateurs or even experienced pit traders. They will hand you
your head. Stay out.
S&P 100 Index (OEX): Closed at 583.18 +5.25. Everything is the same as the
S&P 500 except this chart has produced a triple top. Price on both S&P
charts is above all moving averages. All trends are the same as the S&P 500
and same advice goes here as well. Stay out.
NASDAQ 100 Index: Closed at 1522.84 +10.95. Please notice this chart is a
departure from the Dow and S&P charts. It has a firm, tight triple top, has
failed in a five wave down pattern, and has formed a very neat miniature
head and shoulders between 1500 and 1550. Instead of big rally price bars
like the others, the NASDAQ has formed a continuation triangle with the
apex pointing at 1500. This is where the support channel will be hit when
this index goes down in earnest. PMO was not as strong as the others, but
volume was strong, showing us selling as well as a little buying. You will
know when the stocks are going south, as the NASDAQ will be the leader
going down first. Price bar range was very narrow top to bottom and
finished in the middle. No conviction with weakness. Short trend is up;
intermediate trend and long trends are down. Run away from this one very
quickly. Stay out.
30-Year U.S. Treasury Bond Price: Closed at 112.97 +0.85. Bonds stopped
their selling almost exactly when price range bar hit main support. The PMO
and MACD Histogram continued with negative bars, but showed a little up
relief at the end as price returned to almost 113.00. Bonds completed a
five wave down, hit support and came up in a small one wave. Outside
pressures still make this market difficult to determine or trade. Short
trend is up; intermediate trend is up; and long trend is down. Stand aside.
Gold: Closed at 433.60 +4.00. Chart has finished a five wave down and also
completed waves one and two up. Next we come into the big three wave up,
which is the largest. PMO is up but tilted to the side a little in reaction
to the current wave two. All recent closes were over 429, which means
rally. Next objective in the three wave is $445 then $455. All trends are
up and price is over all moving averages. It's too late for options now.
Buy junior gold and senior gold stocks and move your stops up with the
rally. Silver is almost a carbon copy of the gold chart. The only
difference is that silver will rally further and faster than gold in the
next 4-6 weeks. Buy both silver and gold.
U.S Dollar Index: Closed at 82.53 -0.73. Both the dollar and the bonds
smell inflation. Price has formed the smaller right shoulder of the head
and shoulder pattern. Dollar is correcting down in an A-B-C typical
pattern. It is now forming the C wave down, which should find support at
.8200, .8150, and .8100. All trends are down until dollar finds next main
support. It will not drop under .8000 unless the stock market crashes. Look
for weeks of choppy side action after the support is found. Stay out but
watch it closely for opposite currency trends in euro, yen, pound and
Swiss. No action required. This market is a great barometer for signals.
CRB Index: Closed at 309.16 +1.64. Price bar looks like a Saturn rocket
going to the moon, directly driven by oil, grain, and precious metals with
the most power provided in the order given, respectively. I have to find
some older charts to discover probable resistance points. This market will
rally throughout March and/or until oil hits next resistance level of
$62.00. My new local independent grocer just opened a beautiful, brand new
store. The prices appear to have gone up 25% to 50% across the board. I
know it's not all for the building. It's commodity inflation. We do not
trade this market, but some do. For big risk takers, go long in increments
of 5 points per move, i.e. 295, 300, 305, 310, etc. When you hit a +5 take
your earnings and exit. All trends are up. We are recommending most CRB
sector markets in our trades. Buy.
Light Sweet Crude Oil: Closed at 53.78 +0.21. Main resistance is $55 and
$58. I think we will see $62.00 in this rally top by April. Watch the
unleaded gas contract for April. If it breaks over $1.50, we will get over
$60 oil. Oil is still in the three wave up. A smaller corrective four wave
down will come in about two weeks and will be mild before more buying up in
the five wave. PMO is up and lines are spreading, showing more power to
come. Today's price bar closed near its top, telling us more buying is
coming next week. Keep in mind that big oil rallies are not good for big
stock rallies. They go opposite. All trends are up, and prices are all
above the three moving averages. Oil is suffering from a shortage and war
scares. Do not be swayed any other way. Buy junior and senior oil stocks.
Explorers, distributors, gas suppliers, drillers, and energy service
companies, and energy unit trusts in Canada for income.
A time like this month is what investors and traders dream about. Move fast
and watch your entries, exits, and especially risk stops. -Trader Rog
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March 13, 2005
Jay Taylor, Editor of J Taylor's Gold & Technology Stocks
www.miningstocks.com
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