EUR-USD Weekly Update

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In my previous post I was calling for a rally in the EUR-USD which would carry the pair up to a 1.4197 target. I noted that 1.3613-1.3637 was to act as weekly closing prices which would indicate near term support. Until this last week, all of the weekly closing prices respected the 1.3613 support level. With this most recent week closing below the respective support level, this would indicate that we are very close to a resumption of the Euro panic selling. Although price has closed below the support target, the EUR-USD is still supported by a planetary fan line located at 1.3533
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The last time the EUR-USD broke this type of planetary fan line, it declined over 2000 pips. I no longer expect price to rally up to the 1.4197 target. Instead, I am now looking for a break below 1.35 which would result in a price vacuum. Massive selling pressure and panic is expected to accompany the Euro's break. Price is expected to reach 1.3052 before a pause to the selling would take place.

Freeport Mcmoran Update

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This chart displays the daily progress of Freeport-Mcmoran and is an update to a previous post. The red arrow on this chart indicates the day of the previous post. To view the previous post go to: http://1618analytics.blogspot.com/2010/02/freeport-mcmoran-weekly-chart.html

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In my previous commentary I was calling for a large rally in FCX stock. Specifically, I was looking for it to reach $84.02 during the week of March 19th 2010. My forecast was calling for a rally of $13.79 (19.63%). On March 17th 2010, FCX reached $83 and has since pulled back to $78.51

Given the strength of the pullback from $83, there is a strong possibility that I may of miscalculated the inflection high by one dollar. However, an additional rally up to $84 is still a possibility. The current support level of $78.51 could act as near term support which could help the equity have its final rally up to $84.01

If FCX has a significant break below $78.51 for the week ahead, then we can be prepared for the resumption of the bear market which will carry this equity down to the price targets mentioned in the previous post.

Saskatchewan Potash Corp-Update

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My previous commentary on POT noted maximum selling pressure may of been reached at the 98.27 low. If this was the case, POT was expected to rally and reach $130.26 by March 26, 2010. For the previous commentary visit http://1618analytics.blogspot.com/2010/02/saskatchewan-potash-and-mercury.html

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On March 16, price hit a high of 128.42 and has since pulled back to $121.16 (5.65%). The price of 130.26 still remains an active target as there are 5 trading days until March 26 occurs. From the previous forecast, I determined that price should expand by 270 degrees (130.26) but it appears as though price has met significant resistance at 240 degrees (126.39). Price has currently retraced 38.2% of the previous rally as calculated from the $105.60 swing low. The 38.2% retracement support is located at $119.70

Given the volatility of this stock, I would look for Potash to remain above $119.70 (38.2%) OR $117.01 (50%) if the $130.26 target is to be reached by March 26, 2010. Any significant break below $117 would put the $130.26 target in jeopardy; a re-assessment would indicate that the $128.42 high marked the end to this upward correction. For the upward trend to be completely compromised, I am looking for a confirmation break below $114.50. Given a break below $114.50 early price targets include $58-$60 a share.

China Mobile- Daily- Gann Inflection Levels

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The performance of China Mobile is absolutely crucial to the performance of the Chinese Xinhua Index. The Xinhua Index has a 10.18% weighting towards this cellular provider. This daily chart displays the projected price inflection levels.

The current support level of $46.53 is the price which bears are looking to break. A break below this level opens up the door to a very large decline which could end at $28.02. However, if CHL breaks above $50.91 before heading lower, an immediate rally up to $54.09 is expected. This rally could extend all the way up to between $56.55 - $57.16 before additional resistance is met.

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The additional support targets resulting from a break below $46.53 include:

* $43.18

* $36.86

AAV Oil & Gas Update #3

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This is the third and final update for Advantage Oil & Gas. The original analysis dates back to December 18, 2009. When AAV was trading at $6.35, the chart I posted gave 2 price targets of $8.35 & $9.97 indicating a rally of between 35% - 57%. On March 11, 2010, AAV hit a high of $8.32 and has since pulled back 0.56 (6.7%).

The secondary chart analysis indicated the support levels that needed to be held in order for this rally to continue. I noted that "A move below $6.80 would result in additional selling pressure carrying the equity down to at least $6.46" - AAV hit a low of $6.53 on February 5, 2010, therefore this target was inaccurate by .07

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Update #1 - http://1618analytics.blogspot.com/2009/12/advantage-oil-gas-aav-tsx.html

Update #2 - http://1618analytics.blogspot.com/2010/01/aav-oil-and-gas-tsx-update-2.html

Week Of March 12- Sentiment Analysis

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This last week we saw a spike in the Call/Put ratio which meets levels viewed as extremely bullish. If used as a contrarian indicator, a spike in the Call/Put ratio indicates complacency, greed, or ignorance of downside risk. This chart displays the historical occurrence of days with similar Call/Put spikes. You can see that not every Call/Put Ratio extreme day occurred at market highs like we would expect. This entails a bit of caution that the Bulls don't have to necessarily be wrong. However, many Call/Put extremes did mark price highs so it is useful to be aware of this indicator. The arrows indicate the days when there was between 253-294 Call options traded for every 100 Put options traded.

The smaller chart in the bottom left corner tracks the Cash/Equity Ratio for fund managers. It is widely believed that higher stock prices could come to fruition through fund managers chasing performance. This chart negates the "chase" theory by indicating the amount of cash reserves fund managers have on hand. Available cash to invest is approaching the lowest levels since the market top in 2007.

To view my previous sentiment analysis go to: http://1618analytics.blogspot.com/2010/01/sentiment-analysis-on-current-market.html

Dow Jones Average- Daily Update

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This chart displays the weekly & daily progress of the Dow Jones Industrial Average. This post is an update to a previous Dow analysis. For the previous analysis go to: http://1618analytics.blogspot.com/2010/02/dow-jones-average-daily.html

Specific confirmation will be needed to mark the day if the bear market resumes. This confirmation is available through a break of specific Dow price levels. The previous analysis outlined a "horribly drawn trend-line." It is through a break of this trend-line that the bear market will be confirmed. Due to the fact that the support level is dynamic, each progressive day will entail a higher support level. Here are the Dow Jones confirmation levels:

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1) March 12 = 10, 432

2) March 15 = 10, 490

3) March 16 = 10, 511

4) March 17 = 10, 531

5) March 18 = 10, 551

6) March 19 = 10, 568

7) March 22 = 10,628

8) March 23 = 10,650

9) March 24 = 10, 670

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Global Index Divergence

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The following chart displays Index Funds for the following countries & sectors:
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1) Switzerland
2)Spain
3)France
4)Chile
5)Germany
6)Hongkong
7) Italy
8) Singapore
9) Russell 2000 (Small Cap U.S. stocks)
10)Malaysia
11)Australia
12)South Africa
13)Sweden
14)Nasdaq 100
15)Dow Jones Industrial Average
16) S&P 500
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Of these funds, only Malaysia, QQQQ, and the Russel 2000 made new 52 week highs. At the time of writing this, I think the S&P 500 made a new high also. The new highs made by U.S. Technology and Small Caps are not confirmed by the rest of global markets. The current situation can be classified as a bearish global divergence. Not surprisingly, the widespread global weakness is confirmed by a strengthening U.S. Dollar. To view a previous post with reference to intermarket analysis go to http://1618analytics.blogspot.com/2010/03/bearish-negative-divergences.html

China Life Insurance (LFC)- Daily

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*The following chart displays the daily progress of China Life Insurance (NYSE). March 9, 10, or 11 are the key reversal dates.

*LFC is currently at an important technical resistance level of 71.03. If this level does not hold as resistance, the next resistance level occurs at 73.86.

*If 71.03 acts as sufficient resistance; price is expected to decline down to 57.81 by April 15, 2010.

CAD-JPY Daily- Update #2

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This daily chart of the CAD/JPY is an update. In my previous analysis I noted that the upward price cycle of wave 2 was not ready for termination. This view was derived from the Declination Cycles labeled "F" and "G." With the completion of "F" & "G" the time component requirement for the upward price movement has been satisfied. March 8, 2010 marks the day of the cycle "G" completion.

My previous forecast concluded that on March 11, 2010 price would meet 88.03. The first leg up in this rally was expected to terminate at 86.92. This however was not the case. The first leg extended itself and actually reached the secondary target of 88.03

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*The new forecast concludes that price is expected to begin a significant decline down to 76.21

*This decline is not expected to fall below 75 before a large corrective rally will occur.

*April 6, 2010 is the target date for termination at 76.21

Google - Gann Time & Price Analysis

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Google is currently at a key technical resistance of $566.61. If this level holds as resistance going into March 12, 2010 then a series of significant declines can be forecasted. The first target for the decline is $496.88. In the earliest scenario, April 2, 2010 is the projected date when price is expected to meet 496.88

If 566.61 does not hold as resistance then price is expected to reach 590.66 by April 2, 2010.

Additional Support & Resistance Levels:

S1= 496.88

S2= 460.42 - Time Target= 07/05/2010

S3= 411.71

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R1= 566.61

R2= 590.66

R3= 615.21

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Important dates on which price could meet the following price targets:

1) March 12, 2010

2) April 2, 2010

3) April 20, 2010

4) May 7, 2010

5) May 28, 2010

6) June 15, 2010

The dates listed above have not been derived from Planetary Degree Dates and are therefore unique to Google's stock.

Dow Jones 1997-2010

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The following chart displays a 13 year view of the Dow Jones Industrial Average with Planetary Degree Days overlayed. I have indicated degree days for Saturn, Uranus, and Jupiter. Most notable are the degree days of Saturn. In most cases, Saturn Degree Days do not occur at exact highs/lows. Their occurrence however, does signal the beginning phase of a powerful price move which lasts for several years.

Silver ETF Degree Days

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This chart displays the daily progress of the Silver ETF with important degree days indicated. For Silver I have decided not to use Mercury as was the case with the GBP/USD. There are fewer subdivisions within the price of Silver so a planet with a slower heliocentric orbit is needed.

Silver met a major low when Venus was at 300 degrees heliocentric longitude. A full rotation from the low brings us back to Venus at 300 degrees. With this in mind, I have highlighted the dates of when Venus completed rotations of 360 and 720 degrees from the low. These dates marked important turning points for Silver and they share price characteristics. It is well known that Gann believed history repeats itself. It is my conclusion that this evidence of repetition is what Gann was referring to.

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The first decline from the 300 degree day was $3.51 (high to low). The initial rally which occurred from 360 degrees was $2.53

The second decline from the 300 degree day was $3.55 (close to close). The initial rally which has occurred from 330 degrees is thus far $2.4

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If this pattern of repetition was to continue, then the forecast resulting from this analysis would surely go against my previous bearish interpretation. The repetition of the past scenario would indicate that there is going to be short term weakness in Silver. Price is expected to drop leading up to a March 16th Bullish Reversal. The rally from March 16, 2010 would result in a new 52 week high by April 2, 2010. A trading strategy of "Protected Shortsell" could be implimented until bullish scenario is eliminated. Short the stock + Buy April Call.

My argument against the repetition scenario results from the recent occurrence of other planetary degree days. In this chart we can also see that Jupiter completed a 30 degree rotation during the entire time that it took for Silver to make its upward journey. Although Jupiter's degree days did not occur exactly at the low or high, it is obvious that those days encompass 99% of the Silver rally. I am trading with the belief that the recent Jupiter degree day marked a major turning point for silver. The decline in Silver is expected to continue until the next the next Jupiter degree day of November 9, 2010. Since price tends to reverse on these degree days, a decline into one indicates price rally, and a rally into a degree day indicates price decline. For the bearish forecast to remain strong, I am looking for price to remain sideways to slightly higher until March 16 and possibly reach my second cluster target of 17.74-17.98.

For the previous Silver chart visit www.1618analytics.blogspot.com

GBP/USD Planetary Degree Days

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The following chart displays important degree days for the GBP/USD. I only tracked the days which fall at every 30 degrees heliocentric longitude. For a planet like Mercury which moves fast, its 30 degree interval days will occur more often than other planets further away from the Sun.

It can be argued that since important degree days for Saturn, Jupiter, and Mars occur less often, thier occurrence will mark very important turning points. Confluence dates occur when several planets arrive at important longitude degrees within several days of each other. Perhaps being aware of major confluence dates was the goal of WD Gann since he mentioned that he kept 360 degree calenders for all the planets.

It is visible that the accuracy of planetary degrees as indicators of turning points is mixed. Many of the degree days did infact mark major turning points, while others were ignored or occurred several days late/early. In any case, being aware of these dates can assist the Elliott Wave trader because we could look for "Wave Termination" around these dates. Also, if you use Oscillators; degrees days could give you an indication of when to initiate on the Sell or Buy signal generated.

I have noted the degree interval on significant turning points. The only bearish pattern I can discern is that major highs occur at 210 and 240 Degrees. The bullish pattern would indicate that significant lows can be expected at 120 and 300 degrees.

Silver ETF - Daily

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The following chart displays the daily progress of the Silver ETF (SLV). There are 2 key price regions where there is a cluster of 3 resistance levels.

Cluster 1 = 16.99, 17.08, 17.17

Cluster 2 = 17.74, 17.87, 17.98

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Extensive use of the Gann Square of 9 dates are used in this chart. The red vertical lines mark the dates that are 22.5 degrees from 2/12/2009. You will see how the wave structure terminates at or near indicated dates. The rally in question labeled (2) has not respected the termination date of 27/02/2010. Since there has been 5 trading days since this time target, the silver bears can arrive at two possibe conclusions:

1) Wave 2 termination will not occur until the next time target of 22/03/2010

OR

2) A significant Gann price target was not met until today so the cycle extended itself by several days. Thus a drop should ensue immediately.

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The declination indicator at the bottom of the chart supports the second conclusion. We see the first wave count of (1), (2) terminate relatively close to max declination. If wave (2) of 3 terminates on 22/03/2010, this would be a half cycle of declination devoted towards a "corrective wave." Since a rally termination on 22/03/2010 would result in a longer declination cycle devoted towards upward price action it would create the argument that the trend has not switched to down.

Here are the key reversal dates to watch:

1) 22/03/2010

2) 14/04/2010

3) 07/05/2010

Price Targets:

1) $13.40

2) $11.89

Bearish Negative Divergences

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This chart displays an inter-market analysis viewpoint that technical traders should be aware of. The first data point to consider is labeled "A." Here we see the EUR/USD and GBP/USD peak and negatively diverge with the Dow Jones and Xinhua index. Historically, the GBP and EURO have shared a high degree of positive correlation. The breakdown of this currency/index correlation indicates major market weakness for the most recent leg of the index rally.

The data point labeled "B" displays another negative divergence for the currency/index relationship. The EUR/USD AND GBP/USD both make lower highs when the Dow Jones makes another new high. Also at point "B", we see the Chinese Xinhua Index make a lower high against the Dow Jones Index. The Xinhua divergence is the next major sign of weakness. This breakdown of the global index correlation is a bearish technical signal which should not be ignored. If the Dow Jones does make a new 52 week high, a continuation of the bearish Xinhua divergence is expected. I would look for Brazil, Russia, or India to negatively diverge with a new Dow Jones leg higher. A wider spread negative global index divergence would additionally confirm a strong bearish outlook for the months ahead.

Chinese Xinhua Index ETF (FXI)

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The following chart displays the weekly progress of the Ishares Xinhua China Index ETF. It is possible to also trade this decline through buying the Pro-Shares Ultra-short Xinhua China ETF (FXP).

This analysis indicates the possibility of a 43% decline for the Chinese Index ETF. This decline is expected to terminate at $23.26 during Early November 2010. I began by using the date of 29/10/2004. Then I looked at every date that is 360 Degrees from this starting point. The vertical dashed lines display when these dates occur.

The wave count is indicated by Gann and Fibonacci price targets. For the first decline labeled (A) (B) (C) we see the following price relationships:

*(A) is equal to 360 Degrees down from $72.82
*(C) is equal to 720 degrees down from $72.82 & it is 100% times (A)
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*The large upward rally with the primary label of B retraces exactly 50% of the previous decline.
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This ETF has a good history of following the declination indicator located at the bottom of the chart. If this relationship continues, it re-asserts the bearish outlook for the Xinhua Index.