James´ Insight

Today´s Outlook

• Bullish %: not important right now
• Current reading is 595, poised for a breakout move

Today is poised for a breakout move despite low volumes into Labor Day.

Weekly Outlook

Price reversed right at 1040 and should now head upwards. 1052 has been tested and held. The market is oversold and is due for a technical bounce to 1066, 1075, 1089 and even 1106. The reversal pattern remains alive and well and actually projects to the 1214 area. It will be a bumpy ride, should that be reality.

The world should see one more rally before price simply drops to the lows in 2011 and there it should bottom. Health care costs and taxes will cripple the business environment next year.

The week ahead is a preholiday week and is normally bullish going into Labor day next week.

Analysis

There is not much chance of any volume today before the holiday. The volume has always returned after Labor Day, so be ready for next week as traders begin to come back.

This year of course we have the financial regulation effects of seeing the banks close their prop desks. We will just have to wait and see what effect this has on the market’s liquidity. So far the market is obeying the rules it has always obeyed.

Again, 1085 is the big number to watch as it’s the pivot for two patterns; one bullish and one bearish. I suspect 1085 breaks to the upside with a pullback to 1085 next week.

Even in the worst macro economics, if the boys want it up for bonus then that is where it’s going. They’ll worry about sustainability later. But when looking at the economy I actually see vast improvements. GDP went from -6 to -2 and is holding at -2 even as consumers scale back. There are times the forest cannot be seen for the brush fires in front of it. Bernanke has told the markets that he is not going to allow any back sliding. He hasn’t been wrong yet if anyone has listened.

The last part of the equation is participation or volume. After Labor Day that is what we should see. If we do not see participation then financial regulation and the closing of prop desks will have truly affected the markets. That would take the markets back to pre 1998 activity.

The Vix would drop dramatically. With world events being what they are I sincerely doubt that we reenter that market. So relax a bit and be ready for next week.

The next four months are “money months” be ready.

There will be no Monday edition due to the holiday.

Good luck with your trading!

James´ Insight

Today´s Outlook

• Bullish %: not important right now
• Current reading is 273, over 300 is bullish

Weekly Outlook

Price reversed right at 1040 and should now head upwards. 1052 has been tested and held. The market is oversold and is due for a technical bounce to 1066, 1075, 1089 and even 1106. The reversal pattern remains alive and well and actually projects to the 1214 area. It will be a bumpy ride, should that be reality.

The world should see one more rally before price simply drops to the lows in 2011 and there it should bottom. Health care costs and taxes will cripple the business environment next year.

The week ahead is a preholiday week and is normally bullish going into Labor day next week.

Analysis

I’d say that’s follow through.

Unfortunately you had a couple of seconds to pull the trigger before 30,000 contracts hit the market in less than 30 seconds forcing price from the open to the target where price stayed for the rest of the day.

Yesterday saw 6.0 issu which is good enough to launch a rally, even if it is a short term affair. The next two days will see holiday volume, light, probably bullish. After the close we remain on a buy signal. The weekly shows a higher low, higher high.

1085 and 1090 are important to get through if a full fledged rally is to occur. Everything was tripped yesterday for a buy and on volume.

If this is a real deal rally I still expect to see 1200, a bit delayed but 1200. The big test comes at 1085.

The explosion in the sectors was almost instant and most saw 3 to 4% in one day. Today is a doji expectation. After running 40 points from Tuesday’s lows, this is going to need to digest a bit. When 20 points occur overnight and then the next 10 occur within seconds it doesn’t leave much for the trader to trade. If anyone was caught short with all the news I sincerely doubt they let them off the hook.

Good luck with your trading!

James´ Insight

Today´s Outlook

• Bullish %: not important right now
• Current reading is -29, if it breaks -300 it should signal a wash out low

Weekly Outlook

Price reversed right at 1040 and should now head upwards. 1052 has been tested and held. The market is oversold and is due for a technical bounce to 1066, 1075, 1089 and even 1106. The reversal pattern remains alive and well and actually projects to the 1214 area. It will be a bumpy ride, should that be reality.

The world should see one more rally before price simply drops to the lows in 2011 and there it should bottom. Health care costs and taxes will cripple the business environment next year.

The week ahead is a preholiday week and is normally bullish going into Labor day next week.

Analysis

The sell signal was fulfilled and again reversed on the open. It is all up to follow through now. 1040 and 1052 have been tested and held so far.

1040 is critical to long range thinking on the market and has been for a long time. If it is allowed to break down wave 3 of 3 down may indeed have started. However, under that scenario a pullback to 1084.50 should occur first with 1084.50 failing.

Unfortunately that doesn’t get the street a bonus after a year of underperformance. Any portfolio manager is screaming right now. And, they’ll be screaming for several years to come. But that doesn’t mean we can’t get a rally into November and possibly a very stout rally. Exceed 1084.50 and the winter rally is on. Before that we need buy side volume to offset the selling.

The retail guy is gone; the street can do just about anything they want.

We have a 123V pattern with a tested HL. If this pattern fails, there is little doubt the downside will be harsh and fast.

Good luck with your trading!

James´ Insight

Today´s Outlook

• Bullish %: not important right now
• Current reading is -120, if it breaks -300 it should signal a wash out low

Weekly Outlook

Price reversed right at 1040 and should now head upwards. 1052 has been tested and held. The market is oversold and is due for a technical bounce to 1066, 1075, 1089 and even 1106. The reversal pattern remains alive and well and actually projects to the 1214 area. It will be a bumpy ride, should that be reality.

The world should see one more rally before price simply drops to the lows in 2011 and there it should bottom. Health care costs and taxes will cripple the business environment next year.

Analysis

It was as if the market never opened yesterday. The volume simply wasn’t there until the very, very end of day (and I mean the last 15 minutes).

After the market close we have a sell signal going into today. I expect continued selling and distribution at rally highs at this point. September is almost here and with September we should see a resumption of volume.

1113 was the years open. It would be a RARE year indeed if we continue to stay below 1113. Even if the rally is short lived I’ve never known the street to not want a bonus and they don’t get it by selling.

September is often credited with being a nasty month, which I personally don’t agree with. September is normally a good month with October being the real nasty sell environment. November and December have traditionally been rally months. So the order going into the fall is September up, October down, November up, December hold on for dear life down.

For our purposes of day trading, I just want some volume and August this year has been the worst month I’ve ever seen.

Wednesday is a new month and if there is any buying pressure built up it should show itself on Wednesday. Premature failure at 1040 is simply not a good thing. (It really should not happen until December or later). If I’m wrong about September we should get a good clue on September 1.

Good luck with your trading!

James´ Insight

Today´s Outlook

• Bullish %: not important right now
• Current reading is 93, if we need to get over 300 to become bullish

Weekly Outlook

Price reversed right at 1040 and should now head upwards. 1052 has been tested and held. The market is oversold and is due for a technical bounce to 1066, 1075, 1089 and even 1106. The reversal pattern remains alive and well and actually projects to the 1214 area. It will be a bumpy ride, should that be reality.

The world should see one more rally before price simply drops to the lows in 2011 and there it should bottom. Health care costs and taxes will cripple the business environment next year.

Analysis

Friday saw a high volume outside day reversal. Today has a BUY signal that should stall around 1066-7 initially. Volume can modify that, the numbers I post are not for trading, only a a guideline!

Bonds have attracted all the money of late but that may be about to change, look for higher yields this week.

Good luck with your trading!

James´ Insight

Today´s Outlook

• Bullish %: not important right now
• Current reading is -171, back to sell side

Weekly Outlook

On Monday you have the daily and weekly in down trends; lower high, lower low. Friday was a doji which means to be prepared for a change in direction. On Friday the DI signaled a BUY. This makes sense as the beginning of the week in a downtrend should try for higher prices to be sold into later in the week. The weekly had a high of 1098.50; obviously you don’t want to exceed that high if the downtrend is to continue.

The limit to the weeks upside should be 1090 and 1097. Late week we will see if they sell it off again. Downside potential is 1066 and 1052. If 1052 breaks the Hindenburg is probably kicking in but with that signal so publicized I strongly doubt you’ll see that response until further upside is in.

Analysis

Price was heading up nicely today on a buy signal when news of the increased Greek Value Added Tax hit the markets as being illegal requiring the Greek IRS to refund the taxes collected. This puts the Greek bailout into question and then of course puts the EU banking crisis back in the spot light. At some point a sovereign is going to default.

The cycle reading is -171 which puts the downside into serious question as the reading is now very low and very near the readings you see at a rebound.

Readings in this range can last a month so don’t get too excited yet. If todays price closes below 1059 it also puts the index into a TREND sell. Continue to sell rallies.

Even though we see a reversal pattern on the weekly we still need that one day of strong volume buying to reverse.

Good luck with your trading!

James´ Insight

Today´s Outlook

• Bullish %: not important right now
• Current reading is 14, which puts us back at neutral

Weekly Outlook

On Monday you have the daily and weekly in down trends; lower high, lower low. Friday was a doji which means to be prepared for a change in direction. On Friday the DI signaled a BUY. This makes sense as the beginning of the week in a downtrend should try for higher prices to be sold into later in the week. The weekly had a high of 1098.50; obviously you don’t want to exceed that high if the downtrend is to continue.

The limit to the weeks upside should be 1090 and 1097. Late week we will see if they sell it off again. Downside potential is 1066 and 1052. If 1052 breaks the Hindenburg is probably kicking in but with that signal so publicized I strongly doubt you’ll see that response until further upside is in.

Analysis

Ok so price went for the 1035 first and is now headed on a buy signal to the 1066 area. No problem.

We do not want to lose 1052 off the midpoint chart. ALL six sectors I follow are at their bounce point after yesterday’s close.

Then there has been very little movement since the initial one day 1000 point plunge in the Dow. The pattern we see today is identical to the September/October banking crisis crash. In both situations STABILIZATION has been the primary focus of the markets. The last leg down, which is a declining wedge, has been on extremely low volume. This is a prime candidate for a rally.

Many have asked about the Hindenburg Omen sell signal, so for those of you that are interested in learning more, please read about it through this link: http://en.wikipedia.org/wiki/Hindenburg_Omen. It has been updated quite a bit since the last time I visited that page, so it is clear that somebody cares to make posts there to update it, including mention of the signal that occurred on Aug. 12.

If we look ahead and if I try to make any projections on how this can develop, then this is what we get:

A soon to come rally would full file my yearly projection. It means that further downside may indeed be limited until the end of year, which means a projected PLUNGE after the November elections.

After the extreme fall in 2011 the market will signal an all clear into 2012. This means that there should be one last rally attempt and then a precipitous fall that just keeps going. In other words the Hindenburg is still in front of us.

Good luck with your trading!

James´ Insight

Today´s Outlook

• Bullish %: not important right now
• Current reading is -182

Best case is a doji today and a run to cover the gap and stops from yesterday on Thursday.

Weekly Outlook

On Monday you have the daily and weekly in down trends; lower high, lower low. Friday was a doji which means to be prepared for a change in direction. On Friday the DI signaled a BUY. This makes sense as the beginning of the week in a downtrend should try for higher prices to be sold into later in the week. The weekly had a high of 1098.50; obviously you don’t want to exceed that high if the downtrend is to continue.

The limit to the weeks upside should be 1090 and 1097. Late week we will see if they sell it off again. Downside potential is 1066 and 1052. If 1052 breaks the Hindenburg is probably kicking in but with that signal so publicized I strongly doubt you’ll see that response until further upside is in.

Analysis

Daily:

The Daily Indicator is down. Yesterday’s close at 1050 is below 1052. It is still early in the week and price is near oversold, a technical bounce is in order off 1052 so again I would look for any attempt at 1066 and then another sell to the 1035 on higher ISSU reading.

Price is below all weekly and monthly numbers and in danger of a free fall. Sell all rallies until the daily indicator changes.

Weekly:

Price has finally indicated a sell in the weekly timeframe but REMEMBER that we still need this price below 1060 on FRIDAYS CLOSE. It is a weekly signal.

Outlook:

I personally believe the link between bonds and the equity market via the primary dealers was broken with financial regulation as I have described in earlier Newsleaks. The Fed can buy all the bonds they want but the money isn’t flowing to equities. Without this key support mechanism price is subject to a free fall.

End of week GDP numbers come out and frankly its reality time. Although GDP has moved up from -6 to -2 it is still negative after trillions in support. There is not one trader on the floor who doesn’t know it. You are going to start hearing things like ‘the recession never ended’ a lot. Frankly, until production shifts back to the US the recovery will not take hold. Income solves all current problems and without production you won’t see income.

In addition the fed is our own worst enemy. By keeping interest rates low they are preventing the private sector from allowing money flows to investment and the secondary market in finance. In other words if the investor can’t get yield money flows stop and it’s the feds own policy of low rates that is a major problem.

Good luck with your trading!

James´ Insight

Today´s Outlook

• Bullish %: 38.2
• Current reading is 2

Weekly Outlook

On Monday you have the daily and weekly in down trends; lower high, lower low. Friday was a doji which means to be prepared for a change in direction. On Friday the DI signaled a BUY. This makes sense as the beginning of the week in a downtrend should try for higher prices to be sold into later in the week. The weekly had a high of 1098.50; obviously you don’t want to exceed that high if the downtrend is to continue.

The limit to the weeks upside should be 1090 and 1097. Late week we will see if they sell it off again. Downside potential is 1066 and 1052. If 1052 breaks the Hindenburg is probably kicking in but with that signal so publicized I strongly doubt you’ll see that response until further upside is in.

Analysis

Ok, first things first, even though I might repeat myself.

August has seen 12 doji days and 3 normal days and 1 trend day. If you think this month has been brutal you are correct and most managers have simply taken vacation. Of those few days that saw normal or trend 50% of the range was overnight.

Second, although the market is not designed to go down it does need a BID to go up. With a current cycle bid of 2 we are in danger of losing what little support we had. In fact when the daily reached under zero yesterday, prices collapsed. No bid, no market. No bid – NO UP.

Monday spent all day in the channel reversing what was a very positive start. Sell signal for today, target 1052 and 1052 must hold! If that fails, the market could easily freefall into a wave 3 of 3 down but I’d be extremely cautious into 1052.

With the exception for any plunge below 1052, this is still a 123V reversal with a higher double bottom. After 1052 all bets are off…and we need to be prepared for it. Right now volume on the Dow was -281M for the day or 1/5th normal. It is that lack of volume that may be the only saving grace this market has.

IF the freight train heads south I don’t believe there is any stopping it. That’s fine with me, just get the engine out of the station! Price is below dotted red…it’s a sell.

Good luck with your trading!

James´ Insight

Today´s Outlook

• Bullish %: 32.8
• Current reading is 73

Weekly Outlook

On Monday you have the daily and weekly in down trends; lower high, lower low. Friday was a doji which means to be prepared for a change in direction. On Friday the DI signaled a BUY. This makes sense as the beginning of the week in a downtrend should try for higher prices to be sold into later in the week. The weekly had a high of 1098.50; obviously you don’t want to exceed that high if the downtrend is to continue.

The limit to the weeks upside should be 1090 and 1097. Late week we will see if they sell it off again. Downside potential is 1066 and 1052. If 1052 breaks the Hindenburg is probably kicking in but with that signal so publicized I strongly doubt you’ll see that response until further upside is in.

Analysis

The market has nothing going for it technically. Low volume, weak internals, sells signals (Hindenburg, daily, weekly). Macro economics has nothing to offer. Low employment and not getting better, weak consumer spending, higher proposed taxes and health care costs are what we are seeing.

Structurally the transports and Dow are the ONLY items holding the market up while the sectors are systematically being sold. Mortgage rates are low but no one can qualify for one anyway and to make it worse the secondary market is still frozen. Commercial side is even worse than residential. There is enough news out there that 100% of economists polled have been wrong these past few weeks. Do you know why? They were wrong because the markets, all markets, are designed to go up.

It is human nature to survive the worst.

There is one real problem though and it is a lack of liquidity. There is plenty of money. What we face is an absolute fear that monies won’t be paid back and that is causing a lot of headaches. On a simple level you can say that 2000 contracts per minute or less is simply not a good environment to trade.

In August there have been 15 trading days, 11 of them have been doji days, a normal month would see 1 or 2. We had 4 trading days where price actually did something and out of those 4, two days saw most of the move occur overnight before going into doji like price action during regular trading hours. So I’m not insane for saying that this is not the best trading environment.

However as we come into September the volume will pick up and we will see direction. The definition of a pullback is price movement occurring on low volume. That is exactly what we are seeing now. I have long believed all major decisions come off the weekly chart. The weekly shows 1064 as a downward price channel. 1052 would be a complete breakdown.

There is an accurate old saying on the street: It takes days and weeks to form a bottom and only ONE day to change it.

Good luck with your trading!