Yesterday's closing price rally seems to have been due to a series of “market on close” orders pushing the market up.
As I showed you last night, despite the advance, we had more declining stocks then advancing.
Also yesterday the American Association of Individual Investors released a number of 51% bullish investors, an unusually high number and one in which I think we more or less expected to be toward the final stages of the advance from September. In the market good is bad, bad is good, this seemingly good report for bulls is no different then the high % of shorts in the market late August that set up the institutionally initiated bounce-imbalances are always taken advantage of.
Copper is leading the market, copper has long been associated with increased economic activity, but is it real or a speculative bubble.
These two charts would probably be of little comfort to market bulls.
You can see cause and effect of multiple negative divergences at the red arrows, currently we are facing a serious one in FCX
The hourly chart tracking accumulation for a leg higher at the white arrow and currently apparent distribution of that accumulated stock into higher prices, being where 3C stands on the daily, this is not good for copper, thus the bullish relationship it's price advance has implied.
4 comments:
Brandt, can you gives a little insight as too possible targets with respect to 3C in a price relationship or does 3C tend to go down as the price drops of a stock. I think I have seen a relationship with where 3C bottoms and tops with respect to the price, but I could be wrong. I'm not talking that it has shown the exact price, but maybe within a dollar or so depending on price.
3C can not provide targets, the area it is in relative to price all depends on the chart's zoom factor, therefore the numerical value is useless, only the relative value vs. another relative point. For example price is at $113 a month ago and $113 today, but 3C is significantly lower today, it shows the amount of institutional sponsorship has dropped today relative to the point a month ago. For targets, we still have to rely on conventional analysis. For H&S tops, in the last year or so, the price tends to drop further then the implied target.
Take a look at the e-mail I just sent you. The relative target might factor in days ahead on 3C. Specifically when they start to turn the tide. I have seen this repeatedly in charts that you have put up, but today was the first time I actually studied it. Granted it was only one chart of the SPY that I just looked at, but I think it was pretty interesting.
Look at FCX that you just posted above on the longer time frames, I know what you are saying with the relative scale of the chart and maybe it isn't showing those extremes of hitting those highs and lows until we get to that area. If so, anyway to fix it?
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