Mike Paulenoff is author of MPTrader (www.mptrader.com), launched in February 2003, that provides swing trade alerts and chart analysis in a live interactive blog covering gold, oil, technology, international markets and other trending sectors and ETFs. A graduate of the Georgetown University School of Foreign Service in 1979, Mike worked early in his career analyzing the fundamental and technical aspects of the financial and commodity futures markets at Smith Barney, Harris Upham, and Drexel Burnham Lambert. In 1994 he joined Republic National Bank as strategic trader and market analyst, which included analysis and trading of instruments in FX, emerging markets, stock indices and precious metals. In 1999 he founded MJP Market Strategies, a financial market advisory firm. Mike has co-authored The Business-One Irwin Guide to the Futures Markets (with Stanley Kroll), and has been featured on numerous financial sites and programs, including JAGfn, where he was chief on-air market consultant and strategist, and Minyanville, where he is a contributing "professor."
Will U.S. Yield Follow Japan's Higher? May 22, 2013
Is the chart of Powershares DB 3x Inver Jap Gov Bond ETN (JGBD) Yield reflecting incipient inflation concerns by Japanese bond investors? Of course, inflation is exactly what the BOJ wants, but that does not preclude an investor exodus from the bond market, which by definition will drive up interest rate costs for the Japanese government.
AAPL Pushes Toward New Recovery Rally Highs May 21, 2013
Whatever Tim Cook is telling Congress, so far investors either are in agreement, or realize that there will be little or no damage inflicted on Apple Inc. (AAPL) as a result of his testimony. Let's notice that AAPL has climbed in excess of 10 points since this morning's swoon, and as we speak is attempting to push up through a near-term PF double-top at 444. A print of 446 will be considered a near-term upside breakout, and will point AAPL to a test of 460-464 next.
Is Gold Attempting to Put In a Secondary Low? May 20, 2013
As we speak, spot gold is up nearly $27, and has traded as much as $55 or 4.1% off of the overnight low at $1338.41. Most significantly, however, is the fact that the plunge in gold tested but did not violate the April 15 multi-year low at $1321.50. Instead, gold has reversed with power to the upside, and is confronting its prior recovery-rally peak at $1393.40 hit on May 16. If gold hurdles and sustains above $1393.
Has 10-Year T-bond YIELD Started a New Upleg? May 17, 2013
This morning's upside reversal in 10-year yield from 1.86% to 1.94% ended the correction off of Tuesday’s high at 1.99%, which failed to hurdle and sustain above the 2.3 year down trendline shown below (dashed line). However, both my near and medium pattern and momentum work argue that today's reversal initiated a new upleg within the maturing intermediate-term base pattern in 10-year yield.
SLW Putting in a Double-Bottom Corrective Low? May 16, 2013
After plunging to new multi-year lows at 21.69, Silver Wheaton Corp. (SLW) has pivoted to the upside with power, and has climbed above 23.99 for an intraday-upside reversal of 6% so far. More significantly, however, is the prospect of a major-key reversal if SLW can climb and close above yesterday’s high at 23.13, which will represent a warning signal to the bears that the decline in SLW from last Nov high at 41.30 is over.
Ford Fulfills Technical Upside Potential May 15, 2013
"The Tepper Rally" aborted the most recent pullback in its tracks at 13.95/92 off of the May 9 high at 14.26. Ford Motor Co. (F) now is screaming towards a full-fledged retest of its Jan high at 14.95, which if hurdled and sustained, should trigger upside continuation towards 15.60-16.00. Only a decline that breaks 13.92 will compromise the current technical set-up.
SPX Pushing Against Upper Channel Line May 14, 2013
After more than two hours of trading, the S&P 500 Index (SPX) is at another new all-time high at 1648.63, with the SPX price structure pushing up against its upper-channel line that originated at the Nov 2012 low at 1343.35, and which cuts across the price axis today at approximately 1648.60. If the SPX is in an old-fashioned blow-off, it should rocket above the upper-channel line towards 1665/70, which we notice also will mean a run at the upper Bollinger-Band line too.
JCP Breakout? May 13, 2013
I have not heard or seen any news about J. C. Penney Company, Inc. (JCP) this morning, but that has not stopped it from breaking out of its 10-week base pattern, hurdling a triple-top at 17.88, running stops that have propelled the price structure to an 18.44 high so far. My optimal target zone for the current upleg is 19.80-20.10, with resistance zones along the way at 18.30/40, and 18.80/90. Only a sudden downside reversal and decline that breaks 17.
Gold Has Broken Down; What Does It Mean? May 10, 2013
Below (in italics) is what we discussed early this morning. Since then, gold has pivoted off of $1419.63 into a $15 recovery rally that nearing a test of its near-term breakdown plateau, at $1440.50-$1441.
Dollar Consolidates Prior to Another Upleg May 9, 2013
All of the action off of the April 4 high at 83.49 through the first week in May has the right look of a contained, perhaps already completed, corrective period, which, if accurate, means that the U.S. Dollar Index (DXY) is poised for upside continuation towards the designated higher target zones. Let's notice that the near-term digestion period has enabled the rising 200-day EMA to play catch-up.
Has FB Ended Its Post-Earnings Correction? May 8, 2013
From a PF perspective, let's notice that Facebook, Inc. (FB) has established a double-bottom print low at 26.70, from where the price structure has pivoted to the upside into an up-column of Blue X's. Let's also notice that the high print so far for the rally off of 26.70 is 27.30, which is just beneath a plateau of intense resistance between 27.40 and 27.80. To get an real upside traction, and to confirm that FB has completed a correction off of 29.
GRPN Vulnerable Ahead of Earnings May 7, 2013
Heading into earnings next week, let’s notice that Groupon, Inc. (GRPN) has reversed to the downside from an April double-top at 6.66. It also has pressed across its multi-month channel towards a test of the lower-channel support line, now at 5.37, and perhaps a test of its “turning” 200-day MA, now at 5.19. My pattern work is warning me that GPRN is vulnerable to downside continuation towards a revisit on the Feb 28 low at 4.24.
Correction in Natural Gas Complete? May 6, 2013
The truth be told, I am very surprised so far today that natural gas has managed to bounce off of its corrective new low at 3.971 to 4.000. I am expecting natural gas to press a bit lower, into the 3.90-3.83 support/buy window prior to pivoting to the upside into a new upleg. Be that as it may, however, if natural gas manages to climb above 4.07 on a sustained basis, I will be compelled to enter an initial new, long position at that time, thinking that the correction off of 4.44 is complete.
Shorting the Yen May 3, 2013
The big up-move in the ProShares UltraShort Yen (YCS) -- meaning a decline in the Yen -- no doubt coincided with, and likely was the direct result of, ECB "tinkering" on Thursday. It was also a reaction to Friday morning's U.S. jobs data, which points to a strengthening U.S. economy -- and thus a stronger U.S. dollar versus the Yen. All of the action in the YCS off of the April 11 high at 66.
Is Near-Term Top in Place for UNG? May 2, 2013
The correctly bearish reaction to a greater-than-expected build in natural gas inventories (+40 vs. +30 expected) has triggered a serious liquidation of long positions so far today. Let's notice that the weakness has sliced beneath the Feb-May support line at 4.14, and is pressing towards a test of the April 26 prior pullback-pivot low. If violated and sustained, this will "lock-in" a near-term double-top formation at roughly 4.43 and 4.44. Should such a break of 4.
One hour ahead of Fed Time and the E-mini S&P 500 is bearing down on a key near-term support level- its prior pullback low at 1581.25, which if violated, should trigger some long liquidation that presses the index towards a test of more important near-term support, at 1570.75. Isn't it ironic that this weakness is occurring into the Fed's next policy statement, as if Mr. Market finally is sending a minor warning signal to Bernanke and Co.
FB on the Rise Ahead Earnings April 30, 2013
From my P&F pattern work, Facebook, Inc. (FB) is poised for upside acceleration towards a test of key intermediate-term resistance at 27.90-28.10. If hurdled and sustained, it should trigger upside continuation towards 30.00. Only a PF print of 26.80 in reaction to earnings will compromise the otherwise very constructive technical set up in FB.
AAPL has Recovered Into Heavy Resistance April 29, 2013
Let's notice that Apple Inc. (AAPL)’s strong rally in the aftermath of earnings has climbed into important P&F resistance between 428 and 436. A print of 4.38 will be considered a breakout above a triple-top at 436, and will project higher prices towards a test of 460 thereafter. At this juncture, only an inability to print 438 followed by a decline that prints 418 will indicate that a recovery rally has ended, rather than indicating the first upleg of a new bull phase is complete.
S&P 500 at Critical Juncture April 26, 2013
From my perspective, the E-mini S&P 500 is at a crossroad: If the index breaks critical near-term support at 1570.75-1567.00, a potential top formation will be “locked in,” and will leave the e-SPM vulnerable to a return towards a test of very critical support at 1540-1530. Conversely, if the index holds above 1570.75-1567.00, and climbs above 1588.25, then the pattern will argue for upside continuation to new highs above 1600.
Bullish Inventory Data, but Natural Gas Trades Heavy April 25, 2013
Since this morning's slightly-constructive inventory data were released, natural gas has circled unchanged after initially unsuccessfully spiking to the upside. That said, this warns me that the correction off of the April 18 high at 4.429 in nat gas futures still has unfinished business on the downside prior to the emergence of a new upleg in the larger-developing natural gas -- and U.S. Natural Gas Fund ETF (UNG) -- bull market. At this juncture, only a climb and close above 4.
Has the EWG Started a New Upleg? April 24, 2013
Despite a round of weak and disappointing economic data out of Germany and the Eurozone recently, the iShares MSCI Germany Index (EWG) has the right look of a completed correction of its prior upleg from the Nov 2012 low at 21.15 to the Feb 2013 high at 26.19. Last Thursday’s low at 23.66 ended the complex corrective process, and since then the EWG has rocketed regardless of the poor economic data.
Channel Work Points to AAPL's Positive Reaction to Earnings April 23, 2013
Apple Inc. (AAPL) is less than 4 hours from its fateful earnings release, and what we see is the stock price grinding higher towards a potential confrontation with its nearest-term down trend line, now at 416.50. What we also see is a price structure that on April 18 & 19 plunged beneath 400, which violated both lower boundary lines from the 2-1/2 month channel, which originated at the Feb 13 high of 484.94.
SPX Reaches Critical Technical Juncture April 22, 2013
The S&P 500 has recovered to an extremely important resistance-inflection point in the vicinity of 1559-1562, which represents the resistance line off of the April 11 high, the extension of the uptrend line from the Nov 2012 low (pink dashed line), and the down-sloping 20 DMA (green average), now at 1560.25.
Sharp Recovery Rally or Start of New Upleg? April 19, 2013
Apart from the strangeness of the persistence of today's rally in the aftermath of a slew of disappointing earnings reports, let's notice that the recovery off of yesterday's low at 1530.75 into this morning's high at 1549.50 (so far), has yet to inflict damage to the dominant near-term downtrend off of the April 11 high at 1593. To do that, the E-mini S&P 500 must first hurdle and sustain above the near-term down trend line, now at 1551.
China Connection Feels Worse Than it Looks April 18, 2013
China matters! The 2-month rally in the Shanghai Comp buoyed China-dependent US basic materials and heavy equipment makers. Thereafter, since early February, China has faltered, and so have representative heavy-industry names like United States Steel Corp. (X), Joy Global, Inc. (JOY), and Cliffs Natural Resources Inc. (CLF).
Next Targets for Apple April 17, 2013
Apple Inc. (AAPL) has all roads pointing to 402-400 next, with channel "undershoot" of 396-394. This is the next target zone from where my work indicates the potential for a major upside reversal in AAPL.
Recovery Bounce or The Start of a New Upleg? April 16, 2013
Purely from a pattern perspective, let's notice that yesterday the E-mini S&P 500 plunged to, and then marginally pierced, the Feb-Apr channel support line at 1545. Since then it reversed back into the confines of the channel and at today's high of 1565.50, has traversed about 40% of the width of the channel. Upside continuation to 1575.25 will represent a 50% climb from the lower towards the upper-channel line.
Broad Market Index Leading the Way Lower April 15, 2013
The reason we added the ProShares UltraShort Russell2000 (TWM) to our site's model portfolio is reflected by the enclosed comparison chart of the DJIA and Russell 2000. We have discussed recently that until mid-March, the TWM was the leading and strongest equity index on the upside. However, since then, it has glaringly underperformed the DJIA, which is the narrowest of the major stock indices.
SLW Nearing Final, Critical Support April 12, 2013
Silver Wheaton Corp. (SLW) points to a capitulation target zone of 25.20 to 24.60, which represents the next potentially-powerful support zone within the deep (and deepening) correction of the bull move from the May 16, 2012, low at 24.94 to the Nov 1, 2012, high at 41.30. From a big picture pattern perspective, only a break of the May 16, 2012, low at 24.94 wrecks the emergence of a new-bull leg in SLW.
S&P 500 Climbing to Top of Channel April 11, 2013
Higher and higher the E-mini S&P 500 climbs, with my next optimal target zone of 1598-1602 coming into focus. At this juncture, only a decline that breaks micro-support at 1581/80 will inflict initial damage to the vertical up-move off of last Friday's employment pivot low at 1533.25.