Friday, March 06, 2009

Technical Picture - Elusive Bottom

HCPG included this four bears graphic from in our daily newsletter. It is updated on a regular basis - an interesting link to follow as it develops.

The elusive bottom is in our sights. As we can see from the weekly chart of the S&P above, the head of the inverse H&S bottom is really taking shape. We could bottom as early as next week, or it could take a few more weeks. I'm looking for a definitive candlestick formation, such as a hammer on the weekly to mark the end of the bear market. A shakeout, such as a bullish engulfing or piercing pattern, would still leave the door open for more offsets, so I would prefer the more dramatic signals such as the hammer or morning star type of pattern. But, the unfinished Geithner toxic bank asset plan is still an overhang on the markets.

USD looks like it may roll over soon. Friday's stick is hanging man which needs to be confirmed with a lower close.

ABX no longer a proxy for gold. Is this forming an inverse H&S or is it forming a bear flag? Not sure but, ABX and gold have been sluggish as safe haven, given the markets continued plunge last week.

AMGN is a proxy for biotechs. Approaching support and a technical bounce opp.

Oil - I like how all the MAs are crossing over under price setting up for a BO to the upside, but Oil has been teasing us for a while so I'm still cautious heading into a new week.


john said...

Check out the last three days of trading in GE - - capitulation-like volume on Wed followed by two days consolidation with a bullish stick on Fri. ...could be the spark

Jamie said...

Good call John,

Hammer capitulation followed by NRIBs. Also looks like one half of a mini H&S bottom from $10 down.