As Bullish as it can gets

The charts are very bullish indeed. Look at the S&P index. It looks like its going to make a new high very soon as it bounce off the top of the Ichimoku Clouds and is now aiming to clear the 200 day MA in its second attempt. Will it succeed? A break of the 200day Ma could see the index moving higher in a powerful move.

Click on charts to enlarge (S&P500)

Click on charts to enlarge (United Steel)

Click on charts to enlarge (YGE)

Click on charts to enlarge (AIG)

Click on charts to enlarge (BAC)

Always trade with stop loss.

Waiting game for signs of capitulation

Dear readers, it does not take a genius to tell that the stock market is dropping literally like a falling rock. And i mean its literally plunging on a straight line move. If you are a long only investor, we should be looking at signs of capitulation. Capitulation is defined in Wikipedia as:

" Market capitulation refers to the threshold reached after a severe fall in the market, when large numbers of investors can no longer tolerate the financial losses incurred.These investors then capitulate (give up) and sell in panic, or find that their pre-set sell stops have been triggered, thereby automatically liquidating their holdings in a given stock. This may trigger a further decline in the stock's price, if not already anticipated by the market. The contrarians consider a capitulation a sign of a possible bottom in prices. This is because almost everyone who wanted (or was forced) to sell stock has already done so, leaving the buyers in the market, and they are expected to drive the prices up.The peak in volume may precede an actual bottom."

Let's take a look at one cyclical stock, United Steel (X), which is more prone to the mood and swing of the economy. Note the gradient of the drop. It is almost strikingly similar to the one back in Mar '09.

United Steel (X) Weekly chart

Now, let's take a look at the daily chart. Again, note the gradient of the drop from a gradual move down to a plunging one. So now, we wait.
 
United Steel (X) Daily chart

Sitting on my hands, for now.

Good opportunity to load up! Buy buy buy!

Dear readers, the news on the Greece default and that the world markets reacting on a sell-off had dominated headlines around the world this week. Despite how gloomy the news are currently, let's just focus on the price action. Interestingly, the charts are telling us to buy the dips. We should see higher stock prices to come in the weeks ahead. Solar and the financial stocks looks beaten down and could possibly have formed a bottom. Good time to load up. Gaming stocks are also on a roll.

S&P500

Las Vegas Sands

GT Solar

Yingli Green Energy

US Steel

American International Group (AIG)

United Steel (X) & MGM Resorts International (MGM)

Looking at the weekly charts of both X and MGM, one cannot help but feel that prices are indeed going to break higher for now unless the lower channel trend line of both stocks are violated. While it may seemed too premature to said that the both stocks are now forming the last leg of the lower lows of the bullish triangle on the weekly charts, one cannot deny the fact that the bull run is pretty much intact. The charts do not lie.


United Steel - X

MGM Resort International - MGM
MGM looks to be a low risk buy now based on weekly charts.