Post Expiration Holiday Week Monday

By: Stock Barometer | Mon, Dec 20, 2010
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12/20/2010 9:35:41 AM

This week is more critical than you may think...

Why? Because we're on the cusp of a key reversal date cluster. This suggests that the market is ready to reverse.

That being said, the market may hang up a little here given the time of year. I.e. what I mean is that there are some big firms that would love to finish this year on a strong note. So they're not likely to sell, unless selling starts to take hold. I've seen markets hang up near year end and then significant selling follow into the new year. So we're very close to issuing a sell signal, but we could see the markets hang up here given the seasonality.

Here's a look at the global markets:

World Stock Markets

Here's the week ahead: Nothing major...

Economic Calendar

To help you navigate the intraday action, we have a LIVE chat room that I am in every day. We run it on PalTalk. This will allow you to hear me, and chat with others. Upgrading will also give you access to my trading screen during the day so we can go over recommendations in more detail. Here's the link to sign up:

PalTalk

On to the charts:

Daily Stock Barometer


Stock Barometer Analysis

We remain in Buy Mode, looking for the markets to move higher into 12/19 (or beyond). Ok, we're now in the window for a reversal. So stay tuned...

The Stock Barometer is my proprietary market timing system. The direction, slope and level of the Stock Barometer determine our outlook. For example, if the barometer line is moving down, we are in Sell Mode. A Buy or Sell Signal is triggered when the indicator clearly changes direction. Trend and support can override the barometer signals.


Money Management & Stops

To trade this system, there are a few things you need to know and address to control your risk:

Accordingly;


Potential Cycle Reversal Dates

2010 Potential Reversal Dates: 1/19, 1/28, 3/2, 3/23, 4/7, 5/30, 6/10, 6/28, 7/10, 8/13, 9/7, 10/2, 10/27, 11/21, 12/19. We publish dates up to 2 months in advance.

Our next date for 2011 is January 15th.

I expect the market to move higher for the rest of 2010 - watch 12/19 (to 12/21) for a key reversal.

We are entering a window for a reversal.

My Additional timing work is based on numerous cycles and has resulted in the above potential reversal dates. These are not to be confused with the barometer signals or cycle times. However, due to their past accuracy I post the dates here.

2009 Published Reversal Dates: 1/20, 2/11, 3/7, 3/15, 4/8, 4/16, 4/27, 5/7, 6/8, 7/2, 7/17, 9/14, 10/10, 10/24, 11/12, 11/30, 12/9, 12/21, 12/29. 2008 Potential Reversal Dates: 12/31, 1/11, 2/1, 2/13, 3/6, 4/5, 4/22, 5/23, 6/6, 6/27, 7/13, 9/2, 10/3, 10/22, 11/10, 12/11. 2007 Potential Reversal Dates: 1/10, 1/14, 1/27, 1/31, 2/3, 2/17, 3/10, 3/24, 4/21, 5/6, 6/15, 8/29, 10/19, 11/29, 12/13, 12/23, 12/31, 1/11/08. 2006 potential reversal dates: 1/16, 1/30, 2/25, 3/19, 4/8, 5/8, 5/19, 6/6(20), 7/24, 8/20, 8/29, 9/15, 10/11, 11/28. 2005 Potential reversal dates: 12/27, 1/25, 2/16, 3/4, 3/14, 3/29, 4/5, 4/19, 5/2, 6/3, 6/10, 7/13, 7/28, 8/12, 8/30-31, 9/22, 10/4, 11/15, 11/20, 12/16.


Spread Indicators

Use the following spread/momentum indicators to assist in your trading of the QQQQ, GLD, USD, USO and TLT. They are tuned to deliver signals in line with the Stock Barometer and we use them only in determining our overall outlook for the market and for pinpointing market reversals. The level, direction, and position to the zero line are keys in these indicators. For example, direction determines mode and a buy signal 'above zero' is more bullish than a buy signal 'below zero'.

QQQQ Spread Indicator (NASDAQ:QQQQ)

QQQQ Buy/Sell Spread Momentum Indicator

The QQQQ Spread Indicator will yield its own buy and sell signals that may be different from the Stock Barometer. It's meant to give us an idea of the next turn in the market.

Gold Spread Indicator (AMEX:GLD)

GLD Buy/Sell Spread Momentum Chart

Want to trade Gold? Use our signals with the Gold ETF AMEX:GLD. Gold gives us a general gage to the overall health of the US Economy and the markets.

US Dollar Index Spread Indicator (INDEX:DXY)

US Dollar Buy/Sell Spread Momentum Chart

Want to trade the US Dollar? Use our signals with the Power Shares AMEX:UUP: US Dollar Index Bullish Fund and AMEX:UDN: US Dollar Index Bearish Fund.

Bonds Spread Indicator (AMEX:TLT)

Bond Spread Momentum Indicator

Want to trade Bonds? Use our signals with Lehman?s 20 year ETF AMEX:TLT. The direction of bonds has an impact on the stock market. Normally, as bonds go down, stocks will go up and as bonds go up, stocks will go down.

OIL Spread Indicator (AMEX:USO)

Oil Buy/Sell Spread Momentum Chart

Want to trade OIL? Use our signals with AMEX:USO, the OIL ETF. We look at the price of oil as its level and direction has an impact on the stock market.


Supporting Secondary Indicator

Investor's Intelligence

We daily monitor hundreds of popular and proprietary technical indicators that break down market internals, sentiment and money flow to give us unique insight into the market. We feature at least one here each day in support of our current outlook. As an annual subscriber to any of our services, you will get access to all our charts and research.


Summary of Daily Outlook

We remain in Buy Mode, looking for the markets to move higher into the end of December - but CAUTIOUS of a potential reversal coming soon as we're at a key reversal date.

Once the markets do turn lower, we expect them to do so for the first two weeks of January.

If you're interested in attending a presentation of my Stock Trading Secrets Session, it will be held on Saturday January 8th, 2011 from 10am to 2pm. This is an online class designed for beginner to intermediate traders. I've had people take it multiple times because the theme changes along with the current market conditions. We will be holding these sessions on a monthly basis. Here's the link to sign up: (It's only $39.95 - and would make a great holiday gift too.) click here to sign up now

For my clients who trade intra day - here are the indices pivots for today's trade.

Pivot Points

I publish charts of the ES and Qs with pivots in the chat room every morning. Join me in the chat room if you want to see them, and learn how to use them.

Today's Calendar

Here's a deeper look at the S&P Futures - these levels are very important if you're going to day trade the market.

S&P Pivot Points

These levels are important for both day traders and investors. How? Well, if you are going to take a stock position, it's always best to get the most efficient entry. Understanding that there are key pivots during the day and key levels that futures traders look for, will help you figure a better entry price (instead of just buying at the open). Combine these levels with the timing of the economic reports on the list at the top of the page, and you can really catch some nice swings in the market. More efficient trade entry increases your relative profit per trade.

If you have any questions or comments, email me at Jay@stockbarometer.com.

Regards,

 


 

Stock Barometer

Author: Stock Barometer

www.stockbarometer.com

Stock Barometer is completely independent. We have never and will not ever accept compensation from any company whose stock we recommend.

Our goal is to make you money. We offer you the tools and information to do so and leave it to you, the individual investor, to apply them in the best way possible.

Important Disclosure: Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

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