I figured the market would get stopped at 1875
resistance the first time up there, but I did not expect
it to collapse back to unchanged on the day. But
apparently the move in the yen has captivated market
players and made folks want to reduce their exposure even
The chart of the U.S. dollar vs. the yen has collapsed of
late, but the move down on Wednesday was simply
breathtaking as it plunged from 115 to nearly 113. I can
calculate a measured target around 113 based on that
head-and-shoulders top, but I can also calculate another
one near 111 if I take the high at 125 last July into
So now we've fretted over China. We've fretted over oil.
We've fretted over the German DAX. And now we're about to
fret over the Japanese yen, which I suppose means we'll
have plenty of anxiety not only overnight but more
importantly as we head into the weekend as the U.S.
markets are closed on Monday for Presidents Day while the
rest of the world is open.
It is time again to pay attention to the chart of
Barclays High-Yield Bond ETF (JNK). This chart
needs to start holding, and it clearly needs not to break
down. If it does break down and if the S&P really cracks
under this 1850 area, then at least we'd get some panic
in the market.
In the meantime, breadth stayed positive despite the
late-day selloff. And that continues to keep the
indicators steady. I still think we're going to make a
low for a trading rally this week, but so far things are
not cooperating. And if I am wrong, then this is the
chart you will see passed around everywhere we turn.
I was asked to follow up on the chart of iShares
Silver Trust (SLV) from a few weeks ago. It hit its
first target and while it is difficult to find another
measured target, the next resistance does not show up
until close to $15.
I was also asked about the chart of JPMorgan (JPM)
because I have given downside targets on both Citibank
(C, $37) and Bank of America (BAC, 12) but not
on JPM. It has not broken the way the others have and,
should it start to break, the downside target is near
$50, so you do not want to see it break down from here.
The Volume Indicator is back to an oversold condition
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First Trust NYSE Arca Biotechnology Index Fund
(FBT) is an ETF to be long biotechnology stocks and there
is no sign of a bottom. The best news I can offer,
though, is that the top has a measured target in the $75
to $80 area and that is where it has halted for now. My
rule is that when we hit the target, we would cover a
short, but as for going long, I think you can only do
that if you use a stop at the recent low and only with
the thought in mind that it's a short-term trade, since
there is no base to speak of.
Recall that we had a support line on Apple (AAPL)
at $107 that, if broken, was bearish with a target near
$92. Here is the perfect example of why you would cover a
short at the target, but you don't necessarily have to go
long. I would like to see a base in AAPL and there is
none. If you wanted to get long, then the stop is under
that small uptrend line (currently about $93). If you
want to get short, then the stop is over $97.50.
Otherwise, I see this as a stock in the middle of nowhere
Alibaba (BABA) has a measured target around $65
from that double top, so it has gone beyond that. There
is support from the September low, but if I look at this
chart I see no base to speak of and decent resistance in
the $65 to $67 area. Therefore, I would look to sell the
stock at resistance.
Ratio of bulls to bears is about as low as it gets.
Why can't these late-day reversals finish up and be done with it?
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