S&P500 breaks out of triangle November 17th 2011

Will the move be confirmed?  That is the question but a clear breakdown in the S&P 500 occurred today.

Trade with caution, Europe is by far from solved.  The US "supercommittee" has failed until now to agree on a solution.  China has stood its ground on many issues, demonstrating a shift of power to the east.  Japan is continuing to print to keep the Yen from appreciating.     

The purple line is where I see as a huge level.

See   Long term forecast For an explanation of the significance

S&P500 In a Triangle - Options Expiration Week - Beware of Volitility

S&P500 Hourly Chart

With momentum (MACD) waning, watch for increase in volatility as the market works out of this triangle.  The move will be explosive either way.

Google Analytics | New Feature: Visitor Flow

Interesting new feature I found on Google Analytics.  For businesses, this could be used to target adwords keywords / build advertisements for each region.

S&P500 Drops after LCH hikes Margins on Italy Bonds

UPDATE: Italian Bonds Sink As LCH.Clearnet Ups Margin Calls
From the Wall Street Journal 

The yield on the benchmark 10-year bond soared by 45 basis points to 7.12%, according to Tradeweb, above the psychological 7% mark that prompted Greece, Ireland, and Portugal to seek external assistance as funding costs became unsustainable.

Yamana Gold (TSX: YRI) (NYSE: AUY) - Q3 Results released 11/2/2011

Yamana Gold (TSX: YRI)  (NYSE: AUY) - Q3 Results released 11/2/2011

Highlights: Yamana Gold Announces Third Quarter 2011 Results

• REVENUE INCREASES 22%
• OPERATING CASH FLOW INCREASES 57%
• RECORD ADJUSTED EARNINGS INCREASES 63% 

Yamana Gold CEO Peter Marrone said:

“We continued to focus on delivering growth across all measures, enhancing shareholder value and generating significant cash flow in the third quarter,” 

 Production Highlights:

The miner sold 214,980 ounces of gold, 2.6 million ounces of silver and 38.7 million pounds of copper in the quarter compared with 217,094 ounces of gold from continuing operations, 2.5 million ounces of silver and 43.5 million pounds of copper from continuing operations a year ago.

 Dividend Highlights

The gold miner said it would now pay a quarterly dividend of 5 cents per share, up from 4.5 cents last month and 3 cents in April.

---

EURUSD Short term Triangle - Technical Analysis - November 2, 2011 12:52 AM EST

I would not be surprised to see this triangle breakdown and make a run for short term lows.  No news is bullish for the EURO, the deal that was reached last week to save the Eurozone has been tossed out the window with the Greek Referendum called.  No one can expect a country that is being squeezed by an economic slowdown along withe riots and crippling strikes, will vote for more pain in the short run.

Gold holds as market tumbles on Greek Referendum

The stock market dropped dramatically in the morning, bounced then sold off near the end of day.  S&P500 down 2.79%.  Gold however held up very well, selling with risk off mood but bought up on the dip showing the bulls are back in control of this market.  It isn't surprising that gold is catching a bid while other risk assets tumbled.  With Yen intervention Sunday (Sharp 5% jump) Night and Greek Referendum (over 3% drop in Euro) called today, major currency are at risk of volatile moves.

Continue to watch gold as the US will be entering debt discussions shortly to find ways to trim its deficit.

Note the volume is above average and bearish.  This market is in trouble with breaks of 121 on the SPY.

GLD intra-day Nov 1 2011 - Triangle breakdown - saved by VWAP

Triangle break was down, but so far it appears the VWAP is saving the price action from falling lower.

Reality sets in (at least in the short run) - S&P500 down over 2.2%, Eurusd collaspes

Anyone that participated in that ridiculous rally on the news that the Eurozone is "saved" have just got served.  The price action has moved sharply lower.  This Candle stick pattern some what fits the classic Evening Star

  

The EURUSD has led that collapse as Greece have been discussing a potential referendum on the current plan.  Judging by the number of violent riots and strikes I highly doubt the referendum will pass with flying colours.

USDJPY jumps over 3.5% on Yen intervention - Forex madness continues

You haven't seen a chart like this in a while.... Yen intervention underway, pushing the USD/JPY up 3.5% +.
The Forex madness continues....

---

UPDATE: 1AM EST

The first picture was at around 10pm October 30th, 2011, where the USD/JPY was trading at 78.512.
At 1am October 31st, 2011 USD/JPY is standing at 79.199.  The strange part is that the price action has just went dead for the past couple of hours.

Zerohedge speculated that we have see the next currency peg we have seen recently (SNB with the EURCHF being the first).  From the Article: Please Welcome The Latest Currency Peg

"For the last 45 minutes, USDJPY has been unable to shake loose of 79.2 by more than a pip or two. Following the SNB and their efforts with EURCHF, which as far as we recall is technically pegged at 1.20, is Azumi now pushing another of our freely floating foreign exchange currencies to a peg, as he soaks up any and all USDJPY offers under 79.20?"

From the Bloomberg Article : Yen Drops on Intervention; Aussie Weakens

"The yen sank 4.5 percent to 79.20 per dollar as of 1:25 p.m. in Tokyo after climbing to a record 75.35 earlier today. The Australian dollar dropped 1.6 percent. The dollar-denominated MSCI Asia Pacific Index slid 2.8 percent and Standard & Poor’s 500 Index futures lost 0.7 percent. Copper sank as much as 3.7 percent in London, gold dropped 1.4 percent, and oil retreated 0.8 percent in New York"

EURUSD Plunges on news that MF Global is nearing bankruptcy

5 min chart, as you can see Eur/Usd just woke up to negative this Sunday.  The pair has continued to drop since this screen shot.

For an updated chart check out: freestockcharts.com

From Zerohedge / Bloomberg

• CLEARINGHOUSES SAID TO PREPARE FOR MF BANKRUPTCY, WSJ SAYS
• US REGULATORS ALSO PREPARE FOR MF BANKRUPTCY, RESTRUCTURE: WSJ

EuroSummit Over EURUSD Chart almost at 61.8% of August peak

Tough resistance above for the EURUSD.

The EuroZone Plan of 1 Trillion Euro EFSF seems smaller than the market has priced in.
The 50% hair cut of Greek debt was a given.

Yamana Gold (TSX: YRI) (NYSE: AUY) - 10/26/2011 - Unusual move, likely flushed out weak hands

Yamana Gold (TSX: YRI)  (NYSE: AUY) - 10/26/2011

Research done by Andrea Kramer on Schaeffer's Options Center

Article: Unusual Call Activity on BP, STP, AUY, and CMI - 10/26/2011 10:29:36 AM

"Moving on, AUY followed gold futures into the black yesterday, attracting a bevy of bullish option bettors in the process. Garnering notable attention was the near-the-money January 2012 16-strike call, which saw close to 4,250 contracts change hands. The bulk of the volume traded at the ask price, and call open interest at the LEAPS strike ballooned overnight, pointing to newly bought bullish bets. In early trading, AUY has tacked on another 1.7% to explore the $15.77 region."

Andrea was referencing this spike in volume for the 2012 Jan 21 16.00 Call for Yamana Gold Inc.


 Yamana Gold's Thrid Quarter results will be coming out November 2, 2011 after close. 

TORONTO , Oct. 4, 2011 /CNW/ - YAMANA GOLD INC. (TSX:YRI; NYSE:AUY; LSE:YAU) today announced that its third quarter 2011 results will be released after market close on November 2, 2011 followed by a conference call and webcast on November 3, 2011 at 11:00 a.m. ET . 

 Press release PDF download

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Correlation breakdown SPY vs GLD: Repeat of August 2011?

During the market crash in August 2011, gold found its place as a reserve asset as the USD was under fire due to a lack of a debt agreement.  It appears that from the latest move in gold and S&P500 that this reserve / safe haven status is returning.  With the market dropping almost 2% today and gold rallying almost 3% the lock step correlation over the past 2-3 months appears to have broke down. 

The next few days will be key to determining where these asset classes will go next.

Alexco Resources - Bullish outlook on strong move in silver $AXR 4.8%

On of the regular stocks that I follow is Alexco Resources.  AXR.TO.

Using a fib fan to draw the cyan lines.  It is obvious how these lines played their role in how the price action has moved over the past 4-5 months.

Today The 4.8% break out above the 200 and 50 daily moving average.  Look for confirmation tomorrow if there is a close above the 7.75 level we could be in for a resumed medium term uptrend.

EURUSD Short Term (15-min candles) Technical Analysis -

EURUSD Short Term Technical Analysis

Short term it looks like the oscillators are  rolling over.
  Next resistance is at  200 period moving average at 1.3865 to 1.3870

Correlation breakdown at end of day: SLV (silver) and SPY (S&P 500)

I have been a believer in some form of correlation breakdown between metals and the stock market during a rapid decline.  However, it appears SLV and GLD have traded down with the market recently.   However, something happened at the end of the day Monday October 17th, 2011.  Just after 3:30pm, SLV had a nice rally into close as the SPY sold off to close near the lows of the day. 

You can see that silver has continued to trade slightly up as the Hong Kong exchange opened.
As it still seems that metals and the SPY are functions of the USD, until central banks (in the east most likely) start to buy gold / silver on equity sell offs, SLV and SPY will probably continue to trade up and down roughly together.

EUR/USD review - Options Expiration Week watch for Volatility

Watch for breaks of the above indicated levels of support.  EuroZone has 1 week to deliver a collective solution to tame fears of a global recession.

From Bloomberg: G-20 Tells Europe to Deal Decisively with Debt Crisis at Oct-23 Summit

European officials “will have left Paris under no misunderstanding that there is a huge amount of pressure on them to deliver a solution,” U.K. Chancellor of the Exchequer George Osborne told reporters. Next weekend “is the moment people are expecting something quite impressive.”

Options Expiration Week

Keep a close watch on the VIX

Economic Events Calendar from Bloomberg 

S&P Downgrades Spain from AA to AA-. EUR/USD Topping?

With Spain just downgraded from AA to AA-, is it time for this run up in EUR/USD to give way in the short term at least.

Wall Street Journal provides an overview of this event:

-- S&P drops Spain to AA-, three notches below top AAA rating, with a negative outlook
-- Cites banking sector risks, says labor market reforms needed
-- Move follows Fitch's downgrade of Spain last week; Moody's could be next

Overview of past week for the S&P500 - bearish outlook

Needless to say articles calling the tipping point here and here were dead-on.  Over the past couple of months since August decline it was all to clear that this was a period of consolidation before another push to the downside, and this push is gaining steam.  From the time I have spent looking at charts, I have never seen what many of the perm-bulls were expecting.  A Massive drop in august and then magically a regaining on confidence in the system resulting in a buying back to yearly highs.  There is on caveat...  QE3... This appears to be off the table right now, but you can easily foresee S&P500 at below 1000 as a signal to the FED that the market needs more money pumping. Again, this market is strictly controlled by central banks at this stage, if they ease it will go up, if they signal a halting to easing (not even tightening) the market will meet the reality of price discovery.

October I don't think will disappoint the crowd that fears this time of year based on historic data (ie crash of 1929, and many others).  The first day of October is listed here on a 5-min intraday chart.

Using the SPY as a proxy for volume, we can see that this market ended at the lows of the day on substantial volume. This market also closed below a key level that has been a battle ground throughout Aug-Sept 2011 as well as key resistance in the early part of 2010.  The level was 1120, some commentary about this battle can be found at: Once Again The Battle For SPX 1120 Is Raging

Lets take a step back and look at the daily chart from March until now.

From any technicians perspective this chart is broken.  We are heading into an area of consolidation which occurred in early 2010 which may provide some support but this market getting to 1040 in relative short order is becoming every more likely.

One technical indicator that I think is important to note is the MACD.  There has been a failure to reach the 0 (neutral) level, and the momentum has rolled back down to the bear side, setting the stage for a rough week ahead. 

The S&P500 has decisively broke out of the consolidation range over the course of September.  And a similar move to August could be in the works.  Eurozone failing to react, weak US financials, poor world  economic data all point to a deep recession in the short - mid term.  But remember the caveat ... QE3 (probably valued at $1 trillion +) will of course cause this picture to be voided but all we can do now is wait and see how governments, investors, corporations will respond to this new phase.

I guess it was time to short :) - S&P500 drops nearly 3% - on Fed annoucement - September 21 2011

Two days ago I warned that "We are coming to a definitive point in the markets" in the post :
Time to short S&P 500 ? Depends on Fed Meeting Wednesday 

Evidently it was time to short as the Fed announcement disappointed the markets as the "Operations Twist" was already priced into the markets and then some.  It appears Big Ben realized that further asset outright purchases would elevate commodities (ie gold) to levels that are unthinkable and with that inflation creep which has already started to occur.

It has been commented on many websites that until the S&P 500 gets to the 950-1000 range QE3 will be unlikely. 

We will see if the range will be broken sharply tomorrow, the selling continues expect that 1000 much sooner that most people think.  October might be a "typical" October where markets get reacquainted with economic reality.

SourceFire - Stock Charts - September 20, 2011

Thought it would be interesting to have a look at SourceFire.

From Wikipedia:

Sourcefire was founded in 2001 by Martin Roesch, the creator of Snort. The company created a commercial version of the popular Snort software: the Sourcefire 3D System, an intrusion prevention solution. Sourcefire states that it is committed to advancing open source technology and continues to maintain close ties with the Snort user community.

Company mission from their website:

Focused on its mission to be the leader in intelligent cybersecurity solutions, Sourcefire® is transforming the way Global 2000 organizations and government agencies manage and minimize network security risks. With solutions from the network to the endpoint, Sourcefire provides customers with Agile Security™ that is as dynamic as the real world it protects and the attackers against which it defends

 Weekly chart

The company has shown relative strength company to the broad S&P500 / Nasdaq Indices.
As seen below, FIRE has appreciated faster than the general indices.

Another notable divergence is more recently.  August was a terrible month for NASDAQ and S&P500, however SourceFire emerged unscathed which shows relative strength. 

Time to short S&P 500 ? Depends on Fed Meeting Wednesday

We are coming to a definitive point in the markets.  The Fed will be announcing its meeting Wednesday, which will really set the pace of the next 3-6 months.  The chart below shows also a short signal.... Slow stochastic is getting into overbought territory and the 50 day MA resistance is right above the current price.  A touch of this level at 1226 could be an optimial short entry with a tight stop above this level.  If the Fed disappoints the market, look out below, however there has been talks the FED announcing some form of stimulus which is not priced into the market (ie surprise).

Brookfield Properties Corp Technical Analysis | Stock Chart |

I picked up a recent short play (put option expiring in October) with a property management company Named Brookfield. The company is listed in the US and in Canada under the stock ticker BPO.
 

Despite being oversold, this stock from a technical perspective is in deep trouble.  Breaking below all moving averages, as well as break out to the downside from a triangle correction.  I have a preliminary target of around $13.11, based on today's closing price is about a 15% decline.   It is worth noting that the MACD just crossed over the signal line on a daily and the last 4 days have had increasing volume.

A major level to watch is 15.06, which is the 200 week moving average.  If this level gets broke on high volume look for a rapid decline in the price.  As the world realizes the global economy is slowing, commercial property prices will be affected, but mostly Office rental properties as more companies go under.

This as well as other property management and construction companies have had a large run up without a sustainable pullback to assert their fair value. I would expect over the next 3-6 months many companies pulling back 10-30%.


Another great analysis on this chart is done by
Seeking Alpha :  10 Cheap Stocks With Bearish Trends Despite Growth Profitability



Wikipedia: Brookfield Office Properties

Brookfield Office Properties Inc. (TSX: BPO, NYSE: BPO) is a North American commercial real estate company. Brookfield Asset Management owns 50% of its outstanding common shares. The company has its headquarter operations in New York City and Toronto.^[2] Its New York City head office is on the 11th floor of the Three World Financial Center in Lower Manhattan, New York City, while their Toronto head office is located downtown in the Brookfield Place office complex, which encompasses an entire 5.2 acre city block and offers over 2,600,000 square feet (242,000 m²) of office space^[3]

Brookfield owns, manages and develops office properties in the downtown core of New York City, Washington, D.C., Boston, Denver, Minneapolis, Toronto, Calgary, Ottawa, and Vancouver. Brookfield's properties include One Liberty Plaza and the World Financial Center in New York City; Brookfield Place (formerly BCE Place), First Canadian Place, and Queen's Quay Terminal in Toronto; Place de Ville and the John Edmunds Towers in Ottawa, Canadian Western Bank Place and Enbridge Tower in Edmonton; Suncor Energy Centre, Fifth Avenue Place, Altius Centre, Herald Building, and Bankers Hall in Calgary; and Royal Centre in Vancouver. It also operates real estate service businesses and has a land-development business primarily based in Canada.

Minera Andes Inc. - TSX: MAI - Technical Analysis Review - 6/9/2011

Minera Andes Inc. - TSX: MAI

From Homepage:

Minera Andes is a producer of gold and silver and an explorer of gold, silver and copper in Argentina. Minera Andes trades on the TSX under the symbol MAI and OTC in the US under the symbol MNEAF. Rob McEwen is the company's CEO and largest shareholder (owns 30% of the company).

This stock has made a tremendous move over the past 8 days.  Today was the most bullish day of all - Gold fell $50 from peak quickly, and MAI held its own.   The stock is over bought, so a pull back is not out of the question but I suspect we might have a little more upside before a decent correct to consolidate about previous resistance 2.40 - 2.60.  

Looking to sell 1/2 position if 2.88 gets touched.

Friday's 10% pop was due to the following news item : Update on Proposed Merger of US Gold and Minera Andes


Minera Andes is situated in Argentina and is exploring / mining the following properties.

Gold $1920 - all time high - September 6th, 2011 - Gold breaks $1900

Gold makes its move over the all time high recently set, to close to or at $1920.  This rise in gold is impacted significantly by the recent and continuing turbulence in the world.

See previous post: Geo Poltical Risk - International economic slowdown - Markets poised to open sharply lower:

Geo Poltical Risk - International economic slowdown - Markets poised to open sharply lower

It is September 6th, 2011, around 1 am and it is easy to tell this week will be extremely volatile and risk aversion might be in full swing.  The above table  from Bloomberg shows the futures of the three major US indexes.  DJIA is down 2.48%, S&P 500 is down 2.75%, and NASDAQ 100 is down 2.36%.

Why is this happened?  Well one of the reasons can be simply found by looking at the EUR/USD.

The Euro broke, stemming from a critical German vote on the legality of bailing out Eurozone members such as Greece, Portugal, Spain, etc.

An excellent summary can be found in this recent article from the Telegraph:

• German stock markets plunge 5pc ahead of crucial vote on crisis
• "The German stock market plunged to its lowest level for two years - shedding 5pc of its total value in one day - amid fears of the apparent impotence of European leaders in the face of the debt crisis."

 Not to mention that Greek 2 year bonds are Yeilding over 50% -  From Bloomberg: GGGB2YR:IND


Middle east is also heating up, Turkey will be challenging the Gaza blockade in the UN while in the same week working with NATO to build a missile defense system for Europe. 

Along with the Eygpt/Israel row and Syria's continuing uprising.

The fundamental and technical picture looks horrible for the markets and it is expected that without further stimulus the market will pull back substantially over 6 months.  However, more easing will contribute significantly to a seemingly parabolic move gold and silver.  Gold is close or at its all time high as I conclude this blog post:

Wow looks like it did or almost touched 1920... that is an all time high folks.

Is it Wheat's Time? DAG ETN Analysis | Agriculture Sector poised to make a move | QE3 likely to push the agricultural sector higher

Read an interesting article name: A recipe for CWB failure
CWB referring to the Canadian Wheat Board, and the mention of failure relates to the Vote on September 9th, 2011.

From the Article:

The CWB's board of directors will respect the results of this plebiscite. If a majority of farmers wants to end the single desk for barley or wheat, we will actively support the transition to an open market. I am calling on Minister Gerry Ritz and the Government of Canada to also respect farmers' wishes. 

Another piece of interesting news in the agricultural space: Crop year a difficult one says CWB president by Glen Hallick.

From the Article:

"The 2010 growing season saw record rainfall levels that left millions of unseeded acres, leaving a small crop with one of the lowest quality profiles we've ever faced," White said. "This was frustrating for farmers and posed difficult marketing challenges, made worse by grain-movement issues that stalled farmer deliveries and affected the supply chain for much of the year."

...

Overall all-wheat production grown in the 2010-2011 crop year was down by 3.3 MT to 21 MT. Meanwhile all-barley production declined by 1.9 MT to seven MT.

The CWB forecast for 2011-2012 calls for 17.4 MT of wheat, 3.9 MT of durum and 8 MT of barley. The prediction includes the estimated six million acres that went unseeded this year because of spring flooding.

DAG - 2x Bull ETN - Agriculture - Wheat, Corn, Sugar, Soybean

I am looking at the next pull back as an entry opportunity.  The three standard correction are on the chart above.  Most likely the 38.2% retracement level is what we will see within the next couple of weeks if the top is truly in. If not, these levels will need to be recalculated.  The MACD looks to be rounding off signally a slight pull back.

A very bullish chart is the Weekly DAG

Hence why any pull back will be an excellent low risk high reward trade entry.  If this is the beginning of a new up-leg much higher prices in the agricultural sector will be expected.

Canadian Current Account Deficit Q2 - $2.33 billion over consensus | StatsCan Releases Balance of Payments

Just out Canada's Q2 Current account deficit coming in at $15.33 Billion, well over the $13 billion consensus. 

The full report is posted on the StatsCan website: Canada's balance of international payments
Also posted on www.bloomberg.com : Canada Second Quarter Current Account Report Text

 The obvious culprit is the Canadian dollar which has been staying north of the parity mark for some time.

Above is the CADUSD over the same period of time as the Current Account chart above 2007 - Q2 2011.  A definitive break in correlation occurs around Q1 2009, leading to a persistent downward pressure over the past 2 years.



Another interesting chart is Canada's Foreign Direct Investment

Q2 brought us the highest level of Acquisition of Direct Investment Interest since Q1 of 2008.

Consumer Confidence Report - Big Miss - Employment Situation Friday

Consumer Confidence Report

Prior Prior Revised Consensus Consensus Range Actual Consumer Confidence - Level 59.5  59.2  52.5  45.0  to 59.0  44.5

Released on 8/30/2011 10:00:00 AM For Aug, 2011

From Bloomberg : Economic Calender 

As expected in yesterday's post : Big week - A slew of economic data this week will make markets rocky

Consumer Confidence released today at 10am was a huge miss.  The other piece of economic data to watch out for comes in Friday which is the employment situation.

A Recession is looking ever more likely as the economic data has been confirming the stock market plunge over the past couple months.

Big week - A slew of economic data this week will make markets rocky

The big number will be the employment report coming out Friday.
Bloomberg economic calendar has every major event this week listed with general consensus figures.


Last weeks two misses:

	Prior	Consensus	Consensus Range	Actual
Real GDP - Q/Q change - SAAR	1.3 %	1.1 %	0.7 % to 1.6 %	1.0 %
GDP price index - Q/Q change - SAAR	2.3 %	2.3 %	2.3 % to 2.4 %	2.4 %

 Released on 8/26/2011 8:30:00 AM For Q2p

	Prior	Prior Revised	Consensus	Consensus Range	Actual
New Home Sales - Level - SAAR	312 K	300 K	313 K	302 K to 330 K	298 K

 Released on 8/23/2011 10:00:00 AM For Jul, 2011






Zerohedge has a great summery of this weeks events: How The Economy Quietly Entered A Recession On Friday, And Why The GDP Predicts A Sub-Zero Nonfarm Payroll Number

The chart most relevant to the Economic Data August 29 - September 2

S&P500 - Bearish Divergence - and why lower prices are likely

This is just one observation that might provide an indication of the market rolling over here.  However, looking back at 2008, similar topping pattern resulted in a choppy and UP market before the bigger months later.

In the RSI, it is clear that there are lower lows between the 9th and the 22nd.  However, the price action which seems to be in a clear bearish triangle pattern, has higher lowers between the 9th and the 22nd.  This type of divergences is expanded better on other sites:


Specifically: RSI Divergence

Other: 
Bullish & Bearish Divergence Pattern
Divergences, Momentum And Rate Of Change


Ben Bernanke has made a Jackson Hole speech - Full Bernanke Speech
This speech did not announce any form of stimulus, and put ball in the Fiscal court.

Lets see how this markets hold up over the next few weeks.


One thing that is clear --- Volatility is going to be huge over the next few months.

Off Topic:Toronto - Lightning Storm Images Toronto - 8/24/2011 9:30pm EST

These images and video are from the lightning storm that hit Toronto 8/24/2011; the city and surrounding area has been under Tornado watch for most of the evening.