Charts I’m Watching: February 9, 2012

UPDATE:  11:30 PM

What a difference the Oct 27 spike made…

Note how perfectly the yellow fan line off the Mar 09 bottom intersected with the fan line off the Oct 07 high — all at the apex of a big, fat rising wedge.

5 Year
3 Year
1 Year

Then October 27 came along, providing a slightly different trajectory for the rising wedge and, as a result, causing the fan line from 2007 to miss.  The new fan line from Mar 09 carries pushes the rising wedge apex up and out in time.  It’s made a difference of 35 points and two weeks.

UPDATE:  5:00 PM

Gold continuing to show weakness after breaking the RSI trend line.   The critical tests will be breaking out of the little purple channel and then taking out Fan Line 3.

If those should both occur, we could see a dramatic drop to complete the Crab pattern at the 1.618 extension of 1203.

UPDATE:  2:30 PM

Keeping a close eye on NDX, which should reverse course at 2571 – 2575, the confluence of three Butterfly patterns — one going back to 2007 and the others three and six months old.

The NDX’s rise is all AAPL today.  Like SPX, the leadership is becoming more narrow and volume smaller by the day.

The 2nd biggest component, MSFT (intra-day high = 30.8) faces a flaccid future.  It completed a big Bat (purple) at 30.53.  It’s also running into a Butterfly completion (yellow) at 31.54 and a second, small Butterfly completion (red) at 30.84. 

Two weeks ago, a Butterfly stopped INTC cold.  It’s currently clinging from a crumbling cliff, right at the 1.618 extension of 26.93.

Note that it was clobbered at the more common (for Butterflies) 1.272 extension at 25.27, only to recover and climb up to the 1.618.  Crabs sometimes go higher, reaching extensions of 2, 2.618, 3. 3.618, etc.  But, Butterflies are stuck with 1.272 and 1.618.  Bad news for INTC and NDX.

UPDATE:  1:00 PM

VIX, which has been carving out a massive falling wedge for months, showed signs of breaking out today.

 The rate of change just turned positive and is threatening to break another TL on the daily chart.


A few of the go-go stocks are lending credence to the fact that this rally is simply overdone…

SBUX RW – out of room
CMG RW, Massive Divergence
Crab Complete
AAPL Crab going for 200?

GOOG Negative Divergence
WFM RW, Crab and Neg Divergence

Then, there’s COMP itself.

And, perhaps my favorite chart, the RUT.  It sports a touch of the fan line from Mar 09 (dashed), a completed Crab (yellow), a completed Bat (purple), a completed rising wedge (dashed lines) and a tag of the May 2 trend line — all on negative divergence and falling volume.

This is about as bearish as you can get and, as a broad based index, is much less susceptible to overly narrow advances and manipulation than SPX, COMP or DJIA.

More later.


Charts I’m Watching: February 9, 2012 — 7 Comments

  1. BJ, agreed. Even a lot of people are using the samsung galaxy phone instead of iphone. The hype for AAPL is over with Jobs gone. ipad 3 will be a dud. I think Appl will probablybtouch 500 tomorrow and then reverse hard. The RUT is very weak today, maybe it is a sign..

    PW, just a quick question, is it true that neg div and overbought indicators dont work in a bull market? I read somewhere else abou this, but even if it is true I certainly dont think we are in a bull market, even though more ppl are talking about it

  2. The market has forgotten that AAPL has had almost total domination of the tablet market. That's all about to change very rapidly as Samsung is winning in it's legal battle over AAPL in every country the case has been heard.

    I know somebody that has used the SS Galaxy and says it leaves the iPad for dead.

    This is a long term blow-off top in AAPL IMO.