2012 Has A New High- Make That, Had

2012 now has a new high, although we were there very briefly, and fell off pretty dramatically form there. Volume picked up, but not by much, so I’m not really sweating this one. I suspect we are in for for a short pullback for now, but could be ready for another move up in a day or two. However, hitting a new high pretty much confirms that we are in an Elliot wave 5, of a larger Elliot wave 5 off the 2009 bottom, which means, when this is over, we are in for a pretty severe bear market. While that is beyond the trading horizon I concentrate on, I still like to be cognizant of what to expect in the future. Bull markets are great for trading, but they are boring as hell to write about, and bear markets are just the opposite, bringing out the really stupid in both government and the financial press, so you can imagine I’m really looking forward to it.

When you here whining about gasoline prices in the media, you can almost be assured we are near th end of a bull move. Oil is now at 96, where I previously thought the top pivot point was, but re-looking at it, the point I have just above 100 looks more likely. 100 is a good psychological level as well, as then the whining really goes off the charts. They will blame everyone from tree huggers to Arabs, ignoring who really is to blame.

Gold finally broke out of the moving average jail it was in for a few weeks, making a move to the upside. Often the first move out of a consolidation like this is in the opposite direction of the ultimate trend, which may or may not be the case here. If I was to trade this, i would wait for confirmation (such as another move like today) before going long, or go long here but ready to bail out if it reverses. I doubt if I would go short here, but it might not be a bad move, provided you get out quick if you are wrong.In any case, I don’t consider this to be a confirmed up trend yet.

The up trend in Treasury yields, which started unexpectedly about a month ago, is hitting resitance and may be coming to an end, at least in the short term. This is still at an absurdly low level, so I would not be surprised if it resumes an up trend after a brief pause here.

The Dollar index has been crawling along the 50dema, which is now flattening out. I have no idea which way it will go on the next big move, but I don’t expect it to move much for the rest of this month.

The two weeks prior to Labor Day is traditionally on of the lowest volme periods of the year, which means about the only trading being done is by computers. They will be trying to scalp each other for fractions f a penny, which means the market may not move much, and when it does, in unpredictable ways. The big problem for us to to try to figure out what happens when the big money boys are back in September, and try to position ourselves for that.

I will have the new highs update shortly.

2012-08-21 17:27:41

Source: http://samuraitrader.blogspot.com/2012/08/2012-has-new-high-make-that-had.html