By: Erik Swarts | Sat, Jul 23, 2011
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Here is the chart recap from my notes this week.


As the market pulled into another week in earning season, all eyes were on the financial sector as the likes of Bank of America, Goldman Sachs, Wells Fargo and Morgan Stanley were reporting.

As you can see in the chart below - the banks (BKX) have already broken through their initial support ~ 47 and pulled up for a third time to the critical level around ~ 46. Since the equity market high in late April, each time the BKX has taken another leg lower - the market has followed suit shortly thereafter. - Mining For Risk

And while the BKX lost critical support at 46 on Monday, it was quickly recaptured in the Tuesday session.

BKX versus S&P

S&P Globex Hourly

Mining For Risk


After a strong bounce in the silver pits - a few long-term charts for perspective.




Semantically Silver


After utilizing the 2008 analog during silver's initial breakdown in May - a look and comparison of silver's full arc in 2008.

Respecting the 50% fibonacci retracement level and almost identical 2008 RSI pivot, SLV turned sharply lower in the Tuesday session.

SLV 2008 Daily

SLV 2011 Daily

Coming into the week, some momentum indicators were on the fulcrum of weekly sell signals. By the close of the week those signals were violated with strength.

SPX Weekly 2000-2007

SPX Weekly 2007-2011

War Is Hell


After consolidating for over six months - Apple broke out of its range after reporting strong earnings. If recent history is any guide - it appears the market will follow its lead to new highs in the coming weeks.


Rip Currents


A look at the strong correlation in the 10 year yield and the BKX bank index.

TNX, BKX and BKX:TNX Correlation


While the quarter is still young - it appears the market turned lemons into lemonade by the end of the week.


Disclaimer: Position in UUP & GLL

I just joined Twitter. All my active trades and occasional market musings are disclosed in real-time here.



Erik Swarts

Author: Erik Swarts

Erik Swarts
Market Anthropology

Although I am an active trader, I have always taken a broad perspective when approaching the markets. I respect the Big Picture and attempt to place each piece of information within its appropriate context and timeframe. I have found that without this approach, there is very little understanding of ones expectations in the market and an endless potential for risk.

I am not a stock picker - but trade the broader market itself in varying timeframes. I want to know which way the prevailing wind is blowing, where the doldrums can be expected and where the shoals will likely rise. I will not claim to know which vessel is the fastest or most comfortable for passage - but I can read the charts and know the risks.

I am not a salesperson for the market and its many wares. I observe it, contextualize its moving parts - both visible and discrete - and interpret.

I practice Market Anthropology - Welcome to my notes.

Erik Swarts is not a registered investment advisor. Under no circumstances should any content be used or interpreted as a recommendation for any investment, trade or approach to the markets. Trading and investing can be hazardous to your wealth. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor. This is strictly for educational and informational purposes only. All opinions expressed by Mr. Swarts are subject to change without notice, and the reader should always obtain current information and perform their own due diligence before making any investment or trading decision.

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