James´ Insight

Today´s Outlook

• Bullish %: 40.2
• Current reading is 50, getting low

Weekly Outlook

1075 price or 9th std dev is the BREAKDOWN price that the market has struggled with for 15 weeks. Price closed right on the 1075 price. This week, if price breaks 1075 (ninth STD deviation) and 1073 (monthly support number), the downside should begin.

Everything below 1073 is bear market. Don’t expect any clarity anytime soon. We have a Hindenburg with more signals pending; an election, Sept 11 and Oct 11 and economics that are in a blender and spinning faster than anyone can keep up. The market is going to be a day to day affair for some time to come, which is ok if you know which side to concentrate on. 1066 should put price into a confirmed down trend.

Analysis

Highest profits in history, highest cash positions in history, biggest bond rally forcing the 30 year to a 3.6 yield. Is corporate stopping us? No way

The worst of the recession is behind us in my opinion although yesterday’s unemployment seems to confirm a second recession is fast approaching. That one sure erodes public confidence when they simply can’t find a job and they see another 500,000 file for unemployment insurance.

By the way Singapore is showing 18.8% GDP. Do you know why? They make things.

Fear, sheer fear is stopping price from a rally, an explosive rally. Real estate, jobs, EU funding, war(s), taxes, health care. FEAR but not cash holdings or profits …

Why bring this up? Because some say that it is the beginning of wave 3 of 3 down. Yesterday we had a Hindenburg confirmation signal. But we just went thru a 25% correction. So 3 of 3 down may indeed be right. But it is all happening on vapor for volume and folks wave 3’s don’t happen on vapor. There is absolutely NO volume out there.

Unfortunately I have a sell signal across the board. Daily , weekly, adv/decl, DI, and MA…

If price closes below 1064 it puts us into a long term weekly downward trend. SIXTEEN WEEKS is a long time to wait for a decision… With all the negative comments, numbers, Hindenburgs etc…it’s still a reversal pattern until proven otherwise.

Watch 1066 and 1052. I expect 1052 will get hit but I also expect a rally that takes no prisoners after that.

Good luck with your trading!

James´ Insight

Today´s Outlook

• Bullish %: 54.4
• Current reading is 250, we saw the bounce point I was walking about

Weekly Outlook

1075 price or 9th std dev is the BREAKDOWN price that the market has struggled with for 15 weeks. Price closed right on the 1075 price. This week, if price breaks 1075 (ninth STD deviation) and 1073 (monthly support number), the downside should begin.

Everything below 1073 is bear market. Don’t expect any clarity anytime soon. We have a Hindenburg with more signals pending; an election, Sept 11 and Oct 11 and economics that are in a blender and spinning faster than anyone can keep up. The market is going to be a day to day affair for some time to come, which is ok if you know which side to concentrate on. 1066 should put price into a confirmed down trend.

Analysis

Given the continuing POSITIVE data in our economy, the extreme fear and the window closing it would be hard to be anything but bullish. 1% growth is better than -6% growth.

There are Elliott Wave reports out that indicate a serious wave 3 of 3 down is about to occur. To be honest I personally can’t see it with the numbers that are in print for this economy. Prices don’t just move, They are moved. There is always a catalyst.

One of the catalysts can be spending and I say that if the government wants us to spend then allowing tax cuts to expire isn’t the way to do it. Allowing more job losses through production in China vs the US isn’t the way to do it. There are still a lot of issues out there but company PROFITS are not one of them.

As I mentioned earlier I believe this type of ‘on again – off again’ environment will last for another two years and perhaps we will see a downside test come to pass in the near future. No problem, but based on economics, increasing lending and further stabilization I would think that any downside is just that; a TEST.

Good luck with your trading!

James´ Insight

Today´s Outlook

• Bullish %: not important at this point
• Current reading is 205, we saw the bounce point I was walking about

Weekly Outlook

1075 price or 9th std dev is the BREAKDOWN price that the market has struggled with for 15 weeks. Price closed right on the 1075 price. This week, if price breaks 1075 (ninth STD deviation) and 1073 (monthly support number), the downside should begin.

Everything below 1073 is bear market. Don’t expect any clarity anytime soon. We have a Hindenburg with more signals pending; an election, Sept 11 and Oct 11 and economics that are in a blender and spinning faster than anyone can keep up. The market is going to be a day to day affair for some time to come, which is ok if you know which side to concentrate on. 1066 should put price into a confirmed down trend.

Analysis

Macro hasn’t changed and you should beware the next sell signal off the daily time frame. I said bounce and we are in the middle of that bounce now.

Today may well be another doji after yesterday’s performance. Watch the 1089 price.

Good luck with your trading!

James´ Insight

Today´s Outlook

• Bullish %: 43.4
• Current reading is 65, Sell, but very near zero which is a strong bounce point

Weekly Outlook

1075 price or 9th std dev is the BREAKDOWN price that the market has struggled with for 15 weeks. Price closed right on the 1075 price. This week, if price breaks 1075 (ninth STD deviation) and 1073 (monthly support number), the downside should begin.

Everything below 1073 is bear market. Don’t expect any clarity anytime soon. We have a Hindenburg with more signals pending; an election, Sept 11 and Oct 11 and economics that are in a blender and spinning faster than anyone can keep up. The market is going to be a day to day affair for some time to come, which is ok if you know which side to concentrate on. 1066 should put price into a confirmed down trend.

Analysis

Closed!

That is the sign hanging on the market this month. Volume is so anemic that zero progress is being made, although that will not be the case in September. With the volume in August it isn’t worth trying to analyze. August is always a slow month but it was never closed…

This weekend I said “expect a bounce”. The market barely got off the starting line, never got above the US open and right now I don’t expect anything beyond 1110 during the bounce.

Good luck with your trading!

James´ Insight

Today´s Outlook

• Bullish %: 46.2
• Current reading is 85, Sell, but very near zero which is a strong bounce point

THE MARKET JUST ISSUED A HINDENBURG SELL!

Weekly Outlook

1075 price or 9th std dev is the BREAKDOWN price that the market has struggled with for 15 weeks. Price closed right on the 1075 price. This week, if price breaks 1075 (ninth STD deviation) and 1073 (monthly support number), the downside should begin.

Everything below 1073 is bear market. Don’t expect any clarity anytime soon. We have a Hindenburg with more signals pending; an election, Sept 11 and Oct 11 and economics that are in a blender and spinning faster than anyone can keep up. The market is going to be a day to day affair for some time to come, which is ok if you know which side to concentrate on. 1066 should put price into a confirmed down trend.

Analysis

A few words about the Hindenburg sell signal are in order.

First, not all Hindenburg sell signals result in a crash. However every crash has been preceded by a Hindenburg signal.

Second, they most often occur in groups as the market struggles to come out of its funk back to health and fails. Not all signals result in a full blown 25% crash. Some signals see 7%, others see 25%+. Let me put it another way: the odds of a crash are normally one tenth of 1%, with a confirmed Hindenburg they are 30%.

Once a signal is issued the bull is pretty much done. As such we need a confirmed signal to expect the turn down. A second occurrence is needed to CONFIRM the signal within 30 days.

My possible target is the market’s recent low at 667. However our old friend and calculated bear market equilibrium point of 933 is no doubt going to come into play again. So using that as the equilibrium point I get a run of about 194 points. That is if things are falling appart! If this is not crash type scenario then I fully expect the area around 991 to hold. There is enough price data to expect a sawtooth at this point in time.

If health is around the corner you want to see one characteristic in this decline. You want to see a SAWTOOTH pattern going down. You do not want to see another waterfall decline. Although there is little doubt we will see a few days of waterfall the overall pattern would show a sawtooth.

I might add that this may well be the trip down I expected last November before Bennie bought everything. Price should have rolled then. You may not believe his intervention was present but by Feb 2010 he pumped enough funny money into the system to create the biggest divergence in history. This time I believe his link to the markets is broken (as explained in the previous Newsleaks).

Good luck with your trading!

James´ Insight

Today´s Outlook

• Bullish %: 46.2
• Current reading is 85, Sell, but very near zero which is a strong bounce point

THE MARKET JUST ISSUED A HINDENBURG SELL!

Read the analysis, I’d say it’s important right now…

Weekly Outlook

Technically the big news is the weekly number at 1110. Maintain price above 1110 and we should be ok. Fail 1110 and all bets are off.

On the daily timeframe it is a bit more fragmented. An extremely important high registered at 1116.50. Prices above that number should be very bullish. Fail 1116.50 and 1110 off the weekly will continue to come into play.

I see no reason to believe in a top in at this point. We have a decent pullback on cycle and price charts to launch from. We have HH, HL on the weekly chart. We have a very decent W reversal off the lows. The bid and vix are showing good numbers.

The big hurdle continues to be the 1125 weekly price point. Break over that and we are good to go.

Analysis

Easily the most feared technical pattern in all of charts (for the bullishly inclined) is the dreaded Hindenburg Omen.

Those who know what it is tend to have an atavistic reaction to its mere mention. Those who do not, can catch up on its implications courtesy of Wikipedia, but in a nutshell: “The Hindenburg Omen is a technical analysis that attempts to predict a forthcoming stock market crash. It is named after the Hindenburg disaster of May 6th 1937, during which the German zeppelin was destroyed in a sudden conflagration.”

Granted, the Hindenburg Omen is not a guarantee of a crash, and the five criteria that must be met for a Hindenburg trigger typically need to reoccur within 36 days for reconfirmation. Yet the statistics are startling: “Looking back at historical data, the probability of a move greater than 5% to the downside after a confirmed Hindenburg Omen was 77%, and usually takes place within the next forty-days.” The last Hindenburg Omen occurred during the lows of 2009. Today, we just had another (unconfirmed) Hindenburg Omen. It is time to batten down the hatches – something big is coming.

As a reminder, the 5 criteria of the Omen are as follows:

1. That the daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of total NYSE issues traded that day.

2. That the smaller of these numbers is greater than or equal to 69 (68.772 is 2.2% of 3126). This is not a rule but more like a checksum. This condition is a function of the 2.2% of the total issues.

3. That the NYSE 10 Week moving average is rising.

4. That the McClellan Oscillator is negative on that same day.

5. That new 52 Week Highs cannot be more than twice the new 52 Week Lows (however it is fine for new 52 Week Lows to be more than double new 52 Week Highs). This condition is absolutely mandatory.

Yesterday, all five conditions were satisfied. June 2008 was another such reconfirmed event, and as Barron’s pointed out then, “there’s a 25% probability of a full-blown stock-market crash in the next 120 days. Caveat emptor.”

Which brings us to the present: should the Omen be reconfirmed within 36 days, all bets are off.

There are moments when you just don’t know and this is one of them. On the weekly we have a pending weekly sell signal. On the daily we absolutely have a sell signal. But the issue, and it’s been an issue for some time, but reaching a critical point yesterday is the FACT that the weekly chart clearly shows two reversal patterns, one up and one down. The reversal up is clearly a 123V, very reliable….with a 2nd HL.

The reversal down is a HIGH, LH, Lower Double top, also very reliable. I believe it was engineered to LIMIT the downside damage from the EU bank scare but I’m just cynical…

I could make a STRONG case for either one. Force me to choose and I’d watch the downside REAL hard. I would watch the 9th std dev at 1075, the monthly support at 1073.25, and especially a midpoint at 1067 which is the target I published yesterday. A bounce that allows distribution into September 11th would make a lot of sense. With Batman out of the way (Bernanke) what is there to prevent panic?

To make matters a bit more challenging I could make a STRONG case for sideways into September 11th.

What it looks like is a bounce with strong sellers overhead. It looks like a strong case for breaking 1075 and developing a new down leg as well…

But what would change it? Strong upside volume and it’s not out of the question. Volume is what we need and rather sooner than later!

I said 2010 would be like 2004 and the parallels are remarkable so far except that in 2004 we were recovering, people had jobs and housing was just taking off. Today is the exact opposite. The patterns are identical.

It is just one of those moments when volume is going to come in and decide while the prognosticators should retire.

Good luck with your trading!