Archive for November, 2010

VIX Buy Signal

Tuesday, November 30th, 2010

The VIX closed above its upper Bollinger Band on the daily chart Tuesday, and that’s a pretty good buy signal:

The last such signal was on November 16th, and was good for a 20-point SPX rally. The SPX did indeed print a Gravestone Doji for November on the monthly chart, but that doesn’t preclude a little bounce here. While this VIX signal has a good track record, an intensification of the financial panic in Europe could easily blast the VIX higher.

China’s PMI surprised to the upside Tuesday night, but the futures didn’t bounce very much until three hours after that. So, perhaps it won’t be a catalyst for the SPX on Wednesday. Jobs Fever will be taking hold now, and the estimate for Friday’s big report is +168,000 jobs. If the number does come in strong, I will be interested to see if the market can steamroll the November Gravestone Doji or not.

Bulls Staring Down the Barrel of Gravestone Doji

Tuesday, November 30th, 2010

If the bulls can’t rally the market up today, they will be stuck with a bearish Gravestone Doji candlestick on the monthly chart (black arrow). The last one in April (purple arrow) was a bad omen indeed:

The April gravestone was caused by the European crisis, and you could say that this one is too. And if the Germans are slaughtering the PIIGS to drive the u-rue down, and spike their exports up, well then, one could be forgiven for expecting more mayhem from across the pond, no?

Even Our Skyscrapers Are Made in China

Monday, November 29th, 2010

Donald Trump says that most of our building materials now come from China. So now even our buildings are made in China and merely assembled here.

Donald Trump wants to smash both OPEC and the global sweatshop cartel. An ace negotiator and businessman is exactly the kind of leader that we need in the White House in 2012. Trump will re-negotiate our trade agreements so that they actually benefit Americans. Here is Trump talking with Greta Van Susteren:

IWM Weekly Golden Cross Spells Doom

Sunday, November 28th, 2010

A golden cross is supposed to be good news, and on the weekly chart IWM’s 50-week average (red line on chart) has crossed above the 200-week average (blue line). Click chart to enlarge:

So, “what’s the problem,” you ask? Well, this type of cross is very rare. In fact, this is the only one since the IWM was invented ten years ago. To see more, we have to go to the long-term Russell 2000 chart:

Now, let’s take a closer look at those two crosses. First, the one in January 2004:

After making the cross, the market corrected until the middle of August! Things worked out a little bit better after the September 1991 cross, but the market still went sideways for three months:

The moral of the story is that it takes a lot of work for the market to make a Golden Cross on the weekly chart. And an extended period of consolidation shouldn’t come as a surprise.

iPad Pollution

Saturday, November 27th, 2010

Does you iPad produce more pollution than your car? Maybe. While there is no exhaust pipe coming out of your iPad, it is made in a Chinese factory using electricity from pollution-belching power plants. And it travels across the ocean in a cargo ship that produces absurd amounts pollution. The 15 largest cargo ships produce more pollution than all the cars on the planet combined!

A study of just how much damage an iPad inflicts upon the planet would be a good project for one of you environmentalist types.

And this is just another reason why the factories should be brought home: off-shoring is speeding up the demise of planet Earth. All of the “green technology” BS that we are pursuing here is a joke compared to the Chinese death star.

Here is an article on container-ship pollution.