What, When, Why - Crisis?

By: Boris Chikvashvili | Sun, Sep 24, 2006
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Buy-Sell-Pressure picture of the market is getting even more lopsided. While QQQQ is at a very strong resistance 40.50, S&P is close to resistance at 1342 and Dow is about 1% away from resistance at 11820, the buying pressure has turned down again towards the possible minimum of around 10. There seem to be only one or more days of probing these upside resistances before we have a pretty strong correction in the markets.

Considering the OIL, GOLD and Commodities in general are at the support levels, while interest rates may have reached at least a local minima. The overall picture painted is one of an imminent turn-around.

OK we got the turn-around, sort of.

Stock resistances held and they gave in to our "PRESSURE". Buy pressure is not at the extreme. A low volume bounce up would indicate another sharp selling to come. Alternatively, they bounce from higher pressure levels - lower prices. Crisis ahead?

Gold supported at 572 and moved to around 586 and gold stocks followed. Crisis ahead? Ultimate support is at 470.

Oil is still struggling with the support around ~60, ditto oils stocks.
Ultimate support is at 55.

Bonds moved up, not very bullish on them. If bonds move higher with quality spreads, which are doing just that, then look for a crisis ahead?

Dollar has lost some. With a weekly buy and daily sell we are in no mans land.

The resistance levels are too far, but a quick reversal up is most likely. Crisis ahead?

Some sectors, that look good/bad. Incomplete list

Gold stocks, bounced from strong support.
Drug stocks, good long term, many at resistance.
Oil stocks, good-long term, some are at support.
Oil/Gas trusts good overall, 2-5 % from terrific support, 10-15 yields!
Pipelines, not at support, but can you give up 7-8% yields? Gas price do not matter?
REITS, disaster waiting to happen, at historic resistance levels 2-5% yield!
Banks/Brokers, can they save/sink market. Last horses running. The 30% of S&P. Will the cup underflow. See the cup at BKX chart on your favorite site.

Long term portfolio:
Cash/Short term Bonds - 55%
OIL/GAS Trusts/Piplines - 35%
Gold - 10%

Bottom Line. Enjoy our analysis and support/resistance numbers.
The markets will, often, turn at those numbers, but it takes a short-term system perfection to take advantage of these turn-around/drill-troughs.
Some of them will be short-lived and some will make a fortune if let run.
We got it down close to perfection.



Author: Boris Chikvashvili

Boris Chikvashvili

In short... I was supposed to be a theoretical physicist (Russia+Jerusalem Hebrew University, MS Physics, with distinction, toyed with QUARKS). Somewhere on the road to PHD I have discovered, first the Computers - at Carnegie Mellon University (MS EE, Fathered UNIX, adopted WINDOWS), and second Finance on Wall Street.President ITI,(Computer/Finance Consulting Firm) Consulted AT&T,IBM,SUN,CITIBANK,JP MORGAN, LEHMAN, MICROSOFT. Designed/implemented Trading Systems - BLOOMBERG LLP. There is nothing more to say professionally speaking.

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