U.S. Stocks Ignoring Logic

August 22, 2016/by Peter Brandt

U.S. Stocks Ignoring Logic

U.S. stocks remain in strong underlying bull trends. The dominant pattern in the NASDAQ is a completed 18-month H&S failure pattern with a target of 5413.

Factor Update – August 21, 2016

August 20, 2016/by Peter Brandt

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Factor Alert – Forex and other markets

May 24, 2016/by Peter Brandt

This Alert provides my current thinking on the overall technical condition of specified markets.

U.S. Dollar Index

The sustained advance from the 3 May low in the DX is EXACTLY what I would expect from a major bear trap. The shorts are trapped and the market senses blood in the water. This explains the nature of the recent rally -- not allowing shorts to cover on a reasonable break. The second chart shows that the large spec shorts (funds) remain heavily short while the commercials remain heavily long. DX should remain relatively well bid until prices reach 98 to 99. I expect major resistance at 100 to 101. Factor is fully long the Dollar Index.

Factor Update – May 22, 2016

May 20, 2016/by Peter Brandt

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The chart case for a bear market in U.S. equities

February 14, 2016/by Peter Brandt

All major U.S. stock indexes are forming potential tops

A case can be made based on classical charting principles that the current decline in the U.S. equity markets is just phase one of a larger price decline -- in other words, that U.S. stocks are in a bear market. Consider the following. Factor believes that the most significant price of the day is the closing price and the most signficant price of the week is Friday's closing price. The weekly closing price chart of the DJIA displays a possible H&S top pattern. This top has not yet been completed, but a Friday close below 15,800 would do so.

The U.S. stock indexes are NOT making H&S tops!!!

December 23, 2015/by Peter Brandt

Note: The post herein was absolutely wrong on the analysis of the H&S top in stock indexes. Guess what -- traders are wrong from time to time. I make bold calls and some are right and some are wrong. At the end of the day, price is king and nothing else matters. Members of the Factor research service know that I over-rode the analysis herein on January 6, cautioning that the stock market had deep internal trouble.

Classical charting principles have rules. The Head and Shoulders is a classical chart configuration. The apparent and well-advertised H&S top in the U.S. stock indexes do not meet the rules.

Perma-bears, a H&S top is not sitting for you under the Xmas tree!

Sorry to all of you stock market doomsayers, but labeling the U.S. stock index charts as H&S tops just does not work. Volume is an important criteria upon which to judge the validity of the H&S patterns. Richard W. Schabacker (Technical Analysis and Stock Market Profits), and later, John Magee and Robert Edwards (Technical Analysis of Stock Market Trends), are considered the pioneers in classical charting principles. According to the founders of classical charting, as a rule volume should be greatest in the left shoulder or head and lightest in the right shoulder in order to validate a H&S pattern. As the charts of the Dow Jones Composite, Dow Industrials and S&P 500 show below, the largest slug of volume has been in the right shoulder. This is NOT a sign of a valid H&S pattern, thus the interpretation of a H&S top in the U.S. stock index charts is not likely to be correct.