Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: SGJ who wrote (30020)	3/18/2012 6:22:27 AM
From: GROUND ZERO™	Read Replies (1) \| Respond to of 220355

Yes, you're right... so far, the gold buy is just a near term trade, that's all I really do, near term while following my models... I have only a minor buy signal for gold and bonds, not outright model buy signal... but always, a small bounce in any market could morph into something much bigger, much like a small low pressure area could morph into a dangerous hurricane... this is the same reason I reinstated my short SP on Friday's close, just a very near term sell signal so far... But while we're on the subject, I find another interesting phenomenon for the cash SP's which I'd like to show you and which I believe deserves some attention here... If you look at the SP cash daily chart using the Bollinger Band's 20-2 setting, which I find the most helpful, you'll notice that the price has traded completely above the upper band for the past three days, that's an extremely overbought condition and most markets just don't stay above that upper band for three or four consecutive days without a correction... the last time this occurred was on July 7, 2011 and that was the high for the rally... the cash SP market then declined from the high that day of 1356.48 down to a low of 1101.54 in a matter of four weeks and three days... I'm not at all suggesting this will happen again, but if you examine the cash SP daily chart over a very long time, you will see that after we have three or maybe four consecutive days above the upper Bollinger Band, we have a significant decline... going back many years, this has never failed, if at all... now, it could be different this time, but I think it's well worth the risk right here... Here's the one year chart, look at July 7th: Here's a close up of that July 7th time frame in the middle of this picture, and you could also see the same event about 10 weeks earlier on May 5th to the left: Here we are this past Friday: GZ