Markets - DOWN DOWN DOWN! - Read what we said!!

Markets --- DOWN DOWN DOWN! - Read what we said!!

Well there you have it - DOW down 530 points and NASDAQ down 171 wow!! Just go read all our blog entries and our tweets/fb posts on taking profits and hedging your positions with puts - we talked about the topping nature of the market and we covered some shorts this morning for a tidy profit - we were up all night thinking of trades to do this morning and then got the easy gift of DE (Deere) - we shorted right at the open. We have been short HAL, PYPL and IBB. We closed our IBB short call for 90% profit today - last week in our blog we picked IBB and HAL as top shorts along with PYPL and BABA, INTC, MU.

Good luck trading.. We told you so!!

Closed SWKS short.

Trucharts team

Is the bull run still intact - Markets ended below 50 day? Are you buying or selling? AAPL, NFLX, and the top horsemen

Is the bull run still intact - Markets ended below 50 day SMA? 

Are you buying or selling? 

AAPL, NFLX, Biotech and the top horsemen

What a week - but we ended the week with the market averages closing below their respective 50d SMAs. Looks ominous and then we had 5 days of non stop news of the Chinese Yuan devaluation - we had stated that this was the only option left for the Chinese and we do not think this is the end  the devaluation - the Chinese Yuan is headed to 6.8-7 relative to the USD. The currency is too strong and with the commodities in a complete crash scenario (from the slowdown in the Chinese economy), the Chinese government has to stimulate their exports by driving down the currency - just like all the other nations in the Pacific Rim - look at Japan.  

Markets moved sideways with minor moves up and down but still ended below their critical averages. We have been saying the markets have been going sideways with many 3 digit moves and topping action. Narrow breadth, narrow leadership, big stocks breaking down and a very high number of stocks below their 50d SMAs. Earnings have been lackluster and so have the forecasts. 

Investors and hedge funds are hiding in the high fliers and the consumer discretionary stocks - which are also starting to show some weakness. Some of the auto parts stocks are doing very well because of strong earnings reports. Dividend stocks are performing well due to the obvious benefits - although we think the dividends from the bigger oil players are at high risk of being cut due to the drop in oil prices and falling margins/profits. We would sell all the big oil stocks here if you own them and move money into cash or some other stocks like REITs and some of the other big industrial companies whose earnings look strong or are not affected by the commodity crash. Oil is headed lower and this creates a huge dilemma for the world over and especially the Middle East nations that rely heavily on oil exports for their economies. We are short HAL.

We have been saying to take profits in the tech sector after Micron (MU) and INTC earnings - this seems to have been the perfect call. Earnings were flat and forecasts going forward were lowered and sure enough all the semi stocks are being beaten down. We were short BABA into the earnings report, along with IBM - both of these shorts worked well for us. Sell AAPL and TXN. We are still short AMBA and SWKS and are looking to short MU.

Now let us look at the Biotech sector - especially the ETF IBB - it closed below the 13 week SMA for the first time in over 15 months and is starting to show technical weakness. We were short and did make money on some of our short calls and short puts. We are still staying short the IBB ETF and expect support for the short term at 50 week SMA at around 340. We think this could be the short of the century (our opinion entirely). Here is the chart:

You can clearly see support at the 50 week SMA.

We still do like AMGN - one of the only high dividend paying stocks in this sector. We would wait to go long AMGN.

We still like the REITs even though we think interest rates are going higher primarily the apartment REITs - with rents going through the roof - we think this will force the Fed to raise rates - rent is one of the components of the inflation index.

We expect the markets to test the 13 weeks SMA this week - around 17800 for the DOW and with the Greek Bailout approved by the Greek parliament - we would expect to see some bounce in the markets. 

Check the weekly charts with 13 week, 50 week, 100 week and 200 week SMA for all the indices on our site - you can use the big charts page at: http://www.trucharts.com/bigcharts.aspx

We have shown here below amazing results from our backtest strategy for IBB using the SMA cross with 14 day exit for 2000 bars - it showed a profit of over 211% - Amazing - we have the the snapshot below for part of the runs - an amazing number of profitable trades, just run the backtest feature and you can see for yourself with the numbers on the left hand side in the snapshot below.

Here is a chart of stock TRMB with our automated buy/sell strategy showing clear buy/sell signals on a weekly chart - a feature that is only offered on our site - to registered members only. This automated buy/sell signal could have made you money and saved you a lot of grief. I hate to say it - we do not believe in buy and hold - that is for sissies.

Good luck trading.

Trucharts team

Is the bull run over or is it just a correction? AAPL, Biotech, Industrials - what and where are the markets headed in this swoon?

Is the bull run over or is it just a correction? 

AAPL, Biotech, Industrials - what and where are the markets headed in this swoon?

Trucharts.com - Weekly Blog update

Hi to all our readers and viewers. We did not publish a blog last weekend due to some family commitments. 

Finally got back to the markets and sure enough - excitement all week - DOW was down seven days in a row. The Dow Jones, AAPL, NASDAQ, BIOTECH, Technology, Semi-Stocks and many indices were down for the week. Oil crashing, commodities crashing, China markets down (over $4T valuation wiped out), gold was down - then bounced, earnings were spotty and big energy stocks are being abandoned. With oil crashing, energy companies margins and earnings will be headed downwards. 

Narrow breadth and leadership in the markets were the key points we discussed in our previous blogs as being the indicators and signs of a topping market. We had several huge 3 digit moves and these type of moves are very characteristic nature of topping markets and this is exactly what we were observing. We had also indicated through our facebook and twitter page to sell into any rallies or going short certain stocks. 

A fight between the bull and the bears and short covering were driving stocks like CMG,GOOG,AMZN,NFLX and the top horsemen of the markets higher. The DOW component stocks are being hammered down and we think the DOW has definitely topped out. Revenue growth in companies in the S&P500 were unimpressive and EPS were primarily inline and forecasts were either lower or inline. We will have to wait to see how this plays out. We had also indicated to be short the semiconductor stocks after the INTC and MU earnings report and this played out very favorably for us. We are still short INTC,AMBA and SWKS. QRVO news was terrible and many other companies reported inline and their forecasts were below analyst estimates. We think this will impact AAPL earnings next quarter - the Apple watch and Apple Pay are also not performing well. We prefer to be short the AAPL suppliers and would lighten up on any technology positions on any rallies in this sector.

Now the Biotech stocks - these are the stocks that have helped the NASDAQ run upto new highs (eclipsing it's old high from the 2000 bubble). These are starting to show signs of fatigue from the huge run-ups and for the first time in over a year the IBB etf closed below it's 13 week SMA. We need to see it stay below this 13 week SMA for another week and if it does, we can expect it to go the 50 week SMA at around 320. We are short IBB. We are also seeing some stocks in this sector dropping from their bubbly highs. 

We had to close our TWTR position - we think this stock is headed lower. We had hedged the position with puts so we were able to handle the loss. We went long NFLX.

The averages have definitely broken some trendlines along with some major averages - we think this a bad sign and expect some volatility in August going into the September Fed meeting. Jobs report this past week was 215K but that was still above what we call a critical threshold of 200K jobs per month. Real estate is in a bubble mode and as are stocks and both these sectors will have to correct - stocks are already correcting and it is definitely a stock picker's market.  

UPDATE: We forgot to mention the number of new highs has been contracting sharply and therefore stocks hitting new lows is rising. Media stocks tanked last week and many of these broke major trendlines, and there has been major insider selling in all stocks. These are all signs that we have topped out after this 7 year bull market run. We would highly advise to take profits and sell any rallies.

As for China - the country is now in control of their markets - but we think this will be a futile exercise and the country is mired in over capacity, high debt, real estate bubble and still has a strong currency - we think they need to devalue the Yuan to gain over their rivals in the Asian subcontinent. Shadow banking is a huge problem in China and we have to see how the party handles the situation and not letting the markets run freely.

Let us see some of the charts we have discussed above along with the indices charts:

1. AAPL Chart support at 105 - expect a bounce after MACD and RSI turn. Short.
2. DOW Jones support at around 17000
3. IBB headed to around 330-350 range - Short
4. NASDAQ support at 50 week SMA.
5. NFLX still looking strong
6. SPY - support at 50 week SMA

 

 

 


Interesting articles for reading this week:

http://www.peakprosperity.com/insider/93862/why-china-extremely-vulnerable-now
http://www.zerohedge.com/news/2015-08-08/12-trillion-fat-finger-how-glitch-nearly-crashed-global-financials-system-true-story
http://www.newsmax.com/TheWire/legionnaires-outbreak-new-york-city-bill-de-blasio/2015/08/07/id/669061/
http://news.yahoo.com/chinese-dragon-losing-shine-foreign-firms-035151394.html
http://www.huffingtonpost.com/buck-wargo/boomerang-kids_b_7912484.html?ncid=txtlnkusaolp00000592
http://finance.yahoo.com/news/150-watch-terrifying-apple-luxury-184402938.html
http://www.businessinsider.com/made-by-china-is-what-chinese-consumers-want-now-2015-8?r=UK&IR=T
http://finance.yahoo.com/news/irresistible-china-stock-trade-keeps-160001314.html
http://www.businessinsider.com/r-china-producer-prices-slide-to-six-year-low-in-july-2015-8
http://www.businessinsider.com/factset-q3-eps-estimates-sp-500-prices-2015-8
http://www.businessinsider.com/the-worlds-seventh-largest-economy-is-in-a-downward-spiral-2015-8

Good luck trading.

Trucharts Team

Market Turbulence - Earnings Season and - What to expect next week - Trucharts.com Weekly Blog Update 7/25/2015

Market Turbulence - Earnings Season and - What to expect next week - Trucharts.com Weekly Blog Update 7/25/2015

What a turbulent week - all that excitement from the Greek bailout last week and with the onslaught of earnings season we ended the week down. In the prior week when the markets broke the 200d SMA on Greek news, the markets were oversold - but we indicated in our blogs that the markets were exhibiting topping action with bad breadth and narrow leadership. In addition, we stated that the semi sector was weak and heading into a major slowdown after the news from INTC. Sure enough the semi sector stocks are in a downward trend and we the earnings forecast was not strong. 

We believe the semi sector was being driven by the mobile market and that seems to be slowing down. All markets mature - just like the PC market - we are seeing the growth curve reaching a saturation point - we can expect that AAPL and companies that supply to this industry will be experiencing major slowdown in the coming years. Everyone talks about the next frontier being the automotive industry - but compared to the mobile phone market it is too small and also experiencing a slowdown. The Windows XP phase out last year was also a factor in last year's ramp in the semi stocks. But INTC is headed to 25 - they way overpaid for what ALTR was offering. A very stupid move by INTC.

AMZN and GOOG, along with NFLX - we think these caught the shorts off guard - so it was a huge short covering rally in these stocks. NFLX looks very bubble like. 

We had recommended shorts on AMKR, INTC and TSM and all these worked well for us. We were short AEM and closed that position (earlier then we wanted). Just check in our previous blog entries on where we recommended AMKR and INTC as shorts. 

We went long BIDU,CYBR,WBA,UA,LLY,V - positions in LLY,WBA and UA were called away because of our buy-write strategy - these stocks moved up very nicely. Check the charts at: www.trucharts.com/stockview.aspx - 

We are currently short SWKS and AMBA (over-hyped and over-valued). 

Earnings from capital equipment industries like UTX, CAT, JOY and many others seems to be pointing a slowdown in the industrial sector in China. China news has not been positive and the government intervention into the stock markets is not a good sign. We expect further turbulence in the Chinese markets. China slowdown is also affecting the Aussies and New Zealand economies - yet their housing sector is in bubble mode - because of the low interest environment. We will have to watch and see how this plays out. 

We believe that China is playing a numbers game and trying to put on a good face on their economic issues - huge debt problems, slowing housing sector, falling stock markets, consumer slowdown, and shadow banking issues. China still needs time to truly grasp the knowledge of free markets and banking. When you can print your own currency at an unlimited pace - there will be long term implications.

We are seeing folks piling into consumer discretionary sector - we will have to wait and see how this plays out - we still like V and some of the consumer discretionary stocks. We are long MO which is set to report earnings next week. Next week is going to see a huge set of earnings from the biotech sector and also companies such as FB,LNKD and many others. Check the earnings page with calendar and mouseover charts on our site at: 

http://www.trucharts.com/EarningsView.aspx

Now let us look at some charts for the indices and stocks mentioned above (weekly charts):

Chart for AA show our automated buy/sell signals and you can see where AA was a great short - excellent signal.

SPY has not closed below 50 week SMA - very critical support, Dow Jones closed belwo 50 week SMA, INTC headed down, IWM (Russel 2000 ETF) has critical support at 50 week SMA, IBB critical support at 13 week SMA:

 

 

 

 

Good luck trading from Trucharts team. Hedge your positions.

Best of luck and happy trading.

Trucharts.com Excellent articles to read - we did not post in our blog update

Trucharts.com Excellent Articles to read links:

AAPL, MSFT - reported earnings after the close and both stocks are down in extended hours.

Short MSFT and AAPL. 

SWKS down also because of AAPL - short SWKS.

NFLX - looks very bubbly but we have to wait and watch this one.

We forgot to post these links to some excellent articles over the past week and weekend:

http://jessefelder.tumblr.com/post/120120109570/3-uber-bearish-studies-foreshadow-the-death-of

http://finance.yahoo.com/news/manage-meddle-magnify-chinas-corporate-012319507.html

http://fortune.com/2015/07/19/how-many-watches-did-apple-sell-last-quarter-second-pass/?xid=yahoo_fortune

http://finance.yahoo.com/news/china-must-learn-lessons-stock-145050718.html

http://finance.yahoo.com/news/ford-ceo-must-balance-creeping-car-technology-and-consumer-privacy-182006526.html

http://finance.yahoo.com/news/u-s--consumers-poised-for-liftoff-164021519.html

http://finance.yahoo.com/news/generation-genuinely-creepy-electronic-devices-221000672.html

http://247wallst.com/investing/2015/07/19/5-ipos-due-to-launch-in-the-week-of-july-20th/

http://finance.yahoo.com/news/silicon-valley-startup-guru-says-162047275.html

http://www.investopedia.com/ask/answers/101314/what-are-requirements-fha-loan.asp

http://www.bloomberg.com/news/articles/2015-07-19/in-bailouts-china-s-bias-for-the-complex-may-be-storing-up-risk?cmpid=yhoo

P2P- lending in China:
http://www.ft.com/cms/s/0/6b6a6ac4-2dcd-11e5-8873-775ba7c2ea3d.html?ftcamp=traffic/partner/feed_headline/us_yahoo/auddev,traffic/partner/feed_headline/us_yahoo/auddev#axzz3gMDiX96v

http://www.zerohedge.com/news/2015-07-19/portugal%E2%80%99s-debts-are-also-unsustainable

http://nationalinterest.org/feature/xi-jinping-losing-control-china-13366

https://www.helpscout.net/blog/best-entrepreneur-books/

We made over 18% in three weeks? What did you trade?

Trucharts.com Blog week ending 4/24/2015

Free Stock Chart(s), Technical Screener, MACD Charts, Scanner, Real Time Stock News, Stock Patterns, Stock Quotes, Portfolio Management, Earnings Calendar and more:

Well the stock markets have been going through a nice up trend with this earnings season in full force. Stocks in many sectors were rocking and not so in some sectors. The technology semiconductor sector looks like it has topped out in earnings - check how AVGO, NXPI, TXN (reported earnings and tanked) and many others are pointing to a slowdown in this sector. We were short SMH and recommending shorting NXPI and AVGO in our last blog. We would stay short SMH.

In addition, next week we have the moment of the quarter earnings from AAPL on Monday and then TWTR on the 29th (and BIDU also). FB (Facebook) earnings did not look strong and we still do not like FB due to its valuation. Google stock moved, primarily due to short covering. AMZN was a blowout - unfortunately we think here it is expensive here - even though it may move higher. The earnings will keep going this week and you can check the earnings calendar for your stock on our stockview page in the data box and on our earnings calendar page at: Earnings Calendar.

Here is a stock we talked about shorting and looks like a great candidate for short - please always hedge your position by buying an out of the money call. We always hedge our positions. Stock is IPGP and here is the chart:

Stock is closed below 13d and 50d SMA - target would be 85 and below.




















Gold got killed last week but we think this is going to be range bound from $1100 to $1200 and we will keep a close eye on this. Some commodity stocks did well this past week - check out RS, VALE.

Markets are still trending higher - we think there is a chance for a breakout here and we have to see if there is follow through. Chinese markets are on a roll - bubble brewing but not over yet.

Now how did we make 18% - we traded TWTR stock - TWTR has been range bound between 49 and 53 and we bought the stock for 3 weeks in a row and wrote the covered calls for each of those weeks, since TWTR has weekly options. We traded 400 share blocks and our investment was $10000 and our net profit was $1800. Total return - 18%. We are still long TWTR and plan to stay long into earnings - we think TWTR is beating FB (facebook) and is growing now. We will write covered calls for next week May 1st - Friday for part of our position.  Anyway - I wil be traveling this week and will still try to publish and update the blog next weekend. Check out our site for excellent real time stock news and excellent features like mouseover charts/automated buy and sell signals for any stock which you will find on no other sites. We charge the lowest subscription fee for full access to our site. We need your support and we have been providing actual trades and the best picks for the last 6 months - all for free.

Is the market top in???

Trucharts.com - Stock Chart Free, Screener, Scans, and much more - 

Another interesting fact - we have not seen an pre-announcements for upside surprises this quarter - means earnings may not be as strong as Wall Sreet thinks and with INTC and SNDK lowering their forecasts, we expect that semiconductor industry is entering a slump. Majority of the Q4 demand last year was driven by computer upgrade cycle and Iphone 6. 

Remember we talked about the three 6 factor - 6th year of bull market, Iphone 6 and the Samsung galaxy 6 - and the market bottoming at 666 in 2009.. Hmmm!!!! is the top in!! 

Take profits - Short SNDK.

UPDATED:


Check these support levels for ETF IBB: 13 week and 50 week SMA have been great support before. See the two circles.

Trucharts team

Is the Semiconductor stocks run over??

Stock Charts Free at Trucharts.com - Earnings, Real time Stock News and more:

Read this: Means semiconductor stock run is over. We were saying watch AAPL closely - the inclusion of AAPL in the DOW index is bad news - typically the this happens near the top for a stock. Just see MSFT and CSCO and then these crashed after being included in the DOW Index. We think so - just check the stocks we indicated that looked extended - AVGO, NXPI, SWKS.

http://blogs.barrons.com/asiastocks/2015/03/25/tsmc-the-writing-is-on-the-wall-sell-says-maybank/?mod=yahoobarrons&ru=yahoo

Take profits now.

Trucharts.com team

Where are the markets headed this week and hot stocks to watch - Trucharts.com Blog

Trucharts.com Blog week ending 3/20/2015

Where are the markets headed this coming week and what are the hot stocks to watch this week.

The Fed spoke and the markets rocketed higher last week and gold moved higher and stocks responded positively to the Fed comments - bonds moved higher and yields dropped, the dollar was crushed for a short time and then bounced back. We still like the US dollar and we expect the Euro to head lower. The Fed is cornered and scared to do anything to upset the markets - and they are into playing 'WORD' games - patient and impatient etc. It is truly absurd how the markets are so hung up on words from the Fed. The markets were driven down heading into the Fed meeting and then the VIX got crushed and all the market indices rocketed higher right after the Fed meeting. Basically the Fed said they will not raise rates in June - something that was not surprising to us - we do not expect the Fed to raise rates at all this year even though there is lot of jawboning going on by the Fed and it's governors.

The DOW JONES INDUSTRIALS climbed above the 18K number - NASDAQ buoyed by the flaming biotech stocks and semiconductor stocks breached the 5000 mark and has everyone now waiting and talking about breaking the 2000 high - which we expect is coming to get all the news talking heads excited and bubbling with joy.

Biotech stocks the darlings of Wall Street are having price movements like the internet stocks of 2000 - we do not know when or how this is going to end - companies are buying other smaller rivals or companies with potential blockbuster drugs - and this can last as long as we are in this Fed driven rally and a zero interest rate environment - which says keep taking risks until We (the FED) says time out.

Technically speaking even though the RSI and MACD are exhibiting lower highs with this move up - the patterns seems to indicate higher highs. The NASDAQ is technically broken out to a new high. There maybe some pullbacks (consolidation) - but the trend is for higher highs. We are heading into earnings reporting season and need to be on guard for any potential earnings warnings - please keep these in mind prior to taking any big positions or longer term bullish positions.

AAPL was integrated into the DOW Industrials this week and is a Dow component now. We would be watchful of AAPL here. SBUX announced a stock split this week and SWKS, NXPI and AVGO hit brand new all time highs. Check out our reports page at www.trucharts.com/marketreports.aspx for stock lists with technical breakouts etc.

The biotech sector is on fire and we were wrong on our call in this sector but still believe that this sector is definitely overextended - but right now the sector is still in the hands of the bulls - just check stocks like www.trucharts.com/stockview.asp?TICK=REGN - please check the stock from period 2000 to now and you will see what we mean by exponential moves.

Stocks we picked last week - LLY and SO, PCG did well during this week and LLY was up over $6 from our pick price. 

Stocks we like this week - TWTR, MYL and TEVA - we will be watching these closely and be looking to go long TWTR. Here are the weekly charts (TEVA is breaking out):

Good luck trading.

Trucharts.com team and Founder 

Trucharts.com Hot Stocks and Stocks to watch - Weekly Blog update - week ending 1/23/2015

Trucharts.com Weekly Blog update - week ending 1/23/2015

A shortened week and the Draghi moment on Thursday when the markets were up nicely after another round of QE was announced 1 Trillion Euros – all central banks are printing money and there is no stopping – low interest rates (negative in the Eurozone) and then we have stock bubbles and ZIRP in US is showing up as bubbles in stock valuations and real estate. We do not expect the Fed to do anything this year on the Fed Funds rate and Draghi is bent on destroying the Euro (which incidentally is at 1.115 to the USD) – now European vacations are going to be lot cheaper. And then we had the Greek election and the drum roll please !!! – the anti austerity party won the elections – what a surprise!! Are the Greeks going back to the drachma??

Enough politics – what does this do to the markets – the move up on Thursday was a big move and the move down on Friday looked like a consolidation move and the trend is still intact – the RSI and MACD is moving higher and we think oil is vacillating within a tight range, and gold is also consolidating. Keep an eye on gold and oil. There are over 1300 companies reporting earnings this week. AAPL is on top of the list and as are many big names. Check out the earnings calendar on our site at:http://www.trucharts.com/earningsview.aspx and also we provide the earnings date for any stock on the stock charts page. Futures are pointing to a lower open, but we expect the AAPL earnings maybe the catalyst and Fed speak is what is going to drive the markets.

We are short GM, F, IBB, DAL (sold some puts also)  and long USO, WSM, K, CYBR, LINE and went long BOX on Friday. Our ALTR short was a good call and GM calls expired. Our Trucharts.com BUY/SELL strategies are working well and we are using these to make trade decisions along with watching the technicals closely. There will be a lot of noise during the earnings season, so be watchful. Here are some stocks we like: K, and the list below – futures are down this morning – so be careful with your entry and keep tight stops – the trend is still up and we think until the Fed speaks we may see some volatility.

BABA	104.0200	105.2000	103.0200	103.1100	104.0000	9847987
CME	88.5000	88.9400	87.6800	88.5100	88.5700	1058695
EBAY	56.9900	57.2800	56.3100	56.7600	57.1500	13357022
ETFC	23.9000	24.9700	23.7800	24.5600	22.6500	12271579
EXPE	84.3300	88.6500	84.1400	87.4400	85.7100	3679708
HON	101.1100	103.9200	100.5000	102.4100	99.3900	5209857
HPQ	39.9600	40.2500	39.7600	40.1000	40.0600	6171057
IWM	118.3400	118.7700	117.5500	118.1300	118.2000	26223219
MNKD	5.5900	5.8000	5.5100	5.7400	5.5700	4143225
NOW	66.5900	69.5000	66.5500	68.7400	66.1400	1015475
SNPS	43.2000	43.8500	42.9000	43.5300	43.1700	448589
VLO	48.1500	50.9000	47.7400	50.1600	48.0000	11559865

Check our Reports section for many other picks in the MACD bullish crossover reports and others.

Please spread the word and invite your friends to use the site and take advantage of out recommendations and site features.

Trucharts CEO and Founder

Bob Bhatia

trucharts.com - Markets update

Trucharts.com - Market Update

Markets are consolidating and there is profit taking after this huge run up.  We think the funds will try to cash in before the holiday season to keep up their performance numbers. Also the election is creating some uncertainty.  We are short GLD and AEM.  Long AAPL, LNKD and we may close USO it seems to be breaking down.

Trucharts team

Trucharts - Stocks to Watch - Blog Update for week ending 10/31/2014 

Another week and another major move up from such an oversold correction we had two weeks ago - now hardly anyone remembers that correction.  Not only did we recover all the losses in the pullback - the markets closed at a new high.  That is what markets do when the Fed is on their side - low rates are here to stay and markets around the world are not performing as well as the US markets.  We think there is a huge inflow from investors and funds outside of the US that are driving the markets higher. First we had a big spike in volatility during the correction, we stated that the markets will move higher and the VIX would pullback - that is exactly what we saw - in addition, Bullard spoke and then the Bank of Japan announced a round of QE to weaken the yen and bingo - Friday the markets jumped.  Japan debt to GDP ratio is over 200 but no one cares - commodities are getting crushed - along with Gold - we were wrong on our call on gold.  In one of our blogs a few weeks back we stated that gold had broken a critical trendline and sure enough we see the follow through.  We expect gold to reach $1000 now.  We shorted AEM as we stated in our updates this week.

We expect markets to consolidate and move higher with weaker technical backdrop.  We are heading into a strong period in the year for markets and into Q1 of 2015 - we do not expect any major surprises - unless there are wars and major breakdowns in the Euro zone.  The Fed has basically stopped QE but with low interest rates - they are forcing people to take risks.  Individual stocks are moving in the range of several $$ per day -  just look at the biotech stocks - these are a day traders' dream come true.  Along with this we have the internet stocks like LNKD, BIDU etc.  There are other stocks in other industries that are moving several $$ a day.  Reminds you of the 1999-2000 era.  Unbelievable..  Well take advantage of this and make hay while the sun shines - we do not expect any interest rate hikes from the Fed till middle of next year - so be happy and make money trading.

From a stocks to watch next week - here are some of our top picks this week are - AAPL, LNKD, MA and short AEM/GM at 32+.  We will go long MA and LNKD this week.  Here are the weekly charts:

We closed TUBE and GM short this past week and are still long T/USO and AAPL.  We are still short BIOTECH sector.

Here is a good lesson on technical analysis - this one is about Trend Channels:

http://finance.yahoo.com/blogs/talking-numbers/learn-trend-channels-211350606.html

We will publish an interesting sentiment indicator from our site which predicted the correction and move up these past two weeks.

Best of luck trading this week.

Trucharts team