Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Technical Analysis of Stocks, Currencies, Bonds and Gold

Stock-Markets / Financial Markets 2011 Oct 17, 2011 - 03:06 AM GMT

By: Anthony_Cherniawski


Best Financial Markets Analysis Article-- When I last discussed the VIX two weeks ago, I had mentioned that the VIX was getting quite a bit of attention in the popular media. I should have suspected that it was the "kiss of death" for the continuation of the rally at that time. Although the formation appeared to be ready for an upside breakout, it was due for a Master Cycle low, first. It now appears that the low may be in, or nearly so. The VIX cycle turn date occurred on Saturday, so I am allowing one more trading day for the turn to happen.

-- Broadening formations often appear capricious and maddening in their design, but the outcome is very predictable once the pattern is complete. They are pre-crash formations. The first Broadening Wedge formation (March through July) anticipated a 20% drop in the SPX. This new formation, known as an Orthodox Broadening formation, anticipates a decline over 30%. Monday, October 17 is the next cyclical turn date for the SPX. This decline may be complete in less than three weeks.

Zero Hedge correctly identified this nine-day rally as a low volume short squeeze. This weekend a follow-up article describes how this algo-driven short squeeze was engineered. The explanation for the “surge in the past 9 days is not driven by any latent "optimism" that Europe will fix itself, but simply due to the previously discussed wholesale asset liquidations (as none other than the FT already noted), which on the margin are explicitly EUR positive due to FX repatriation, courtesy of the post-sale conversion of USDs to EURs.”

-- From a technical view the Euro was due for a bounce by early October. In early September it violated violated its first

violated its Head and Shoulders neckline, but fell short of its target of 128.60.

The new impulse low at 131.64 may be the locus of a new Head and Shoulders neckline with a much lower target at 113.88. It appears that the prior neckline at 139.00 may provide resistance for this rally.

You can see that there is a very high correlation between the Euro and the SPX since early May. This coupling of the Euro and the SPX will likely continue for the next six months or more.

-- The dollar has completed a 46.6% retracement from its first impulse high off the May 4 low of 72.70 72.70

72.70. The retracement appears complete, although it may search for the bottom at 76.27, its 50% retracement. Friday happens to be a cycle turn date, so there'll be no surprises if the dollar resumes its upward trend on Monday.

-- Gold may have made its cycle high and a 41% retracement high last Wednesday, October 12. If so, it appears ready to decline through the lower half of its cyclical trading range and possibly hit its Orthodox Broadening Top target of 1230.00 in the process. The cycle pattern suggests that the next significant turn date will be at the end of October. Whether it reaches its target by then remains to be seen.

The cycles suggest a significant low for gold in 2012. If it can remain above 750 at its 2012 low, the secular uptrend in gold may continue. However, should a decline below 750, there may be yet another four years of decline in gold.

-- By all appearances, USB may have completed an impulsive rally from its February low. So far, however, both the declining pattern and the cycle do not appear to be complete, leaving USB in no man's land. Should the rally resumed while stocks decline we may see a parabolic blowoff in bonds. On the other hand, should USB immediately join equities in their decline, we may see an end to a 30 year uptrend in bonds.

The cyclical picture suggests, but does not require, approximately 2 more months in this secular uptrend. I remain cautious that the trend in bonds is due for a change.


--West Texas Crude  has made a new Head and Shoulders pattern that lends meaning to the phrase, "When it first you don't succeed try, try again." I find it amusing that the second Head and Shoulders pattern has a target almost identical to the first. If the Head and Shoulders pattern holds, crude may be about to finish its rally and begin the next "crash phase" down in the next day or so.

Those of you following my work may remember that the initial Broadening Wedge formation anticipated a possible low near 74.00.  The August low was a near miss. The new broadening flag formation anticipates a low near 57.75. I would not ignore that warning.



Our Investment Advisor Registration is on the Web

We are in the process of updating our website at to have more information on our services. Log on and click on Advisor Registration to get more details.

If you are a client or wish to become one, please make an appointment to discuss our investment strategies by calling Connie or Tony at (517) 699-1554, ext 10 or 11. Or e-mail us at .

Anthony M. Cherniawski, President and CIO

As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals

Disclaimer: The content in this article is written for educational and informational purposes only.  There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

Anthony M. Cherniawski Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in