The State of the Trend

By: George Krum | Sat, Jan 25, 2014
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At the end of last year we observed that following the December FED meeting the SPX is poised to burst out of the '09 weekly channel. Liquidity peaked on the last day of 2013:

SPX Chart
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and Friday's sell off brought the index back within the weekly channel with first support at 1750:

SPX Chart 2
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From a sentiment point of view, weekly bullish sentiment is testing the 75% level which hasn't been violated since January '13. A further deterioration in bullish sentiment should coincide with the SPX testing the regression line:

SPX Chart 3
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In the sentiment department, we also monitor the VIX which gave us a timely early warning signal preceding the 50+ point drop:

VIX Chart
Chart courtesy of OddsTrader

GLD is showing signs of reversal but will remain in a vulnerable position until it manages to climb and stay above the 50% retracement level:

SPDR Gold Trust Weekly Chart
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SLV didn't fare as well, and remains confined within both downtrend channels:

iShares Silver Trust Weekly Chart
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George Krum

Author: George Krum

George Krum

George Krum is the author of the "CIT Dates" blog, and the following apps available from iTunes:

OddsTrader - uses the power of Hurst Channels to produce price and time targets, and combines them with proper risk and position size management.

OT Trend - helps you quantify and forecast the seemingly random ebb and flow of stock, index or mutual fund movement.

OT Fibonacci - automates the process of applying Fibonacci numbers, ratios and time series to any security.

OT Seasonal - allows you to perform seasonal analysis on practically any security from around the world and to build long-term forecasts and models.

OT Pairs - is the first mobile app that gives users access to one of the most profitable and time tested hedge fund trading strategies.

OT Pivots - combines the power of Pivot lines with cycles and automatic signal generation.

Gann 9 - is the only financial app that allows users to effortlessly apply the legendary W.D. Gann's tools and methods for trading (including the Square of 9).

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Source: The Contrarian Take