The State of the Trend

By: George Krum | Sat, Jul 26, 2014
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Last month we concluded that given the oversold nature of the market, support at 1955 should hold, and the SPX should continue making new highs. Since then 1955 was tested twice and held, and the SPX went through two overbought/oversold cycles, making marginal new highs on both occasions:

SPX Chart
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The DJIA and the NDX made new highs as well.

Which brings us to the Russell 2000 index which made a new high at the beginning of July, but since then is lagging behind the other majors. Looking at the monthly chart, it is actually showing a textbook momentum divergence -- a double top accompanied by lower stochastic readings:

Russell 2000 Monthly Chart
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The first level of support for the Russell ETF is at 112, and the next at 107. Any break below these levels will put the chances for continued advancement of the other indices in serious doubt.

It is interesting to note that to construct the Gann angles for the IWM we used the combined input from two of OT Signals' new indicators: Swing Time and Swing %. They measure the average swing duration and average % swing advance/decline for your instrument of choice. Then it's just a matter of using these numbers to mark price and time targets, or plugging them into your favorite TA tools, and eliminating all the guess work.

Gold briefly broke above the 50% retracement level of the '09 - '11 bull run following the MH17 crash, but was unable to hold on to the gains, and is testing old support levels dating to April '14. Just like before, we can't get bullish unless it breaks above that 50% retracement. And, unlike GS, we see long-term support for gold at 930, and not at 1050:

SPDR Gold Trust Shares Weekly Chart
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George Krum

Author: George Krum

George Krum
www.citdates.blogspot.com

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

OddsTrader - combines the power of Hurst Channels with proper risk and position size management. For a web version see OT Signals below.

Gann 9 - 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).

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 - pairs trading, one of the most successful hedge fund trading strategies, is now available on your smart phone.

OT Pivots - combines the power of pivot lines with cycles to provide you with concise technical analysis and powerful trading signals.

OT Signals - a web app accessible from any browser, tablet or pc. It gives buy/sell/hold ratings for any instrument from around the world, and defines the trend and support/resistance levels.

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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/