Latest Newsletter

Here's a link to our latest newsletter

Newsletter Thursday Morning Jan 31st, 2013

 

XLE system and trading OIH instead of XLE

I've stated this before, however I thought that I would bring it up again: Even though the XLE swing system is based on signals from indicators on the XLE and BPENER chart, you actually make quite a bit more money if you buy OIH in place of XLE! Obviously one could trade ERX and ERY and do even better, however my problem with those ETF's is that too many folks get into trouble with the triple leveraged ETF's thus it's nice to be able to trade a 1X ETF like OIH instead.  As you can see, via trading OIH, you have a higher winning percentage, a higher profit factor, and a higher total net profit

I've attached two TS reports, the first is the the system if you trades XLE, the second report shows if you traded OIH instead. For the stats, I'm using 100K per trade non compounded.  If I used compounded, it goes up to 11 million.

• 
  
  
• 
  
  
• 
  
  

AAPL weekly chart - approaching trendline from 2003

Here's a logarithmic chart of AAPL going back to 2003, as you can see AAPL is now very close to this trendline - will it bounce off it?? 

However even if it does, the daily chart has a lot of damage of the large gap down last week on Thursday and the stock will not go straight up even if a bounce off that line occurs - the first bounce/rally should be sold and AAPL may need to base out for a while.

5 RSI quite extended on the daily SPX

Note that while the SPX tested the 1500 level today, the 5 length RSI hit levels not seen in over 2 years

• 
  
  

My Most Recent Newsletter

Here's my most recent newsletter, I cover a ton of things from market analysis both short term and big picture views, AAPL which reported earnings today, precious metals, and trade ideas

Click here to view the Newsletter

Big Picture thoughts

As you know, the market has come all way since the March 2009 bear market bottom where the S&P 500 hit a devils low of 666, today it stands just shy of 1500!

Here's a monthly chart of the S&P 500, potential targets for this year are 1550 - 1600 or the upper trendline (which also corresponds to roughly 1600.  However my long term thoughts remain the same, I still consider this bull market, which began in Mar 09 as a cyclical bull market in a longer term Secular Bear market which began in 2000.  Secular markets tend to last 16 - 18 years on average, this secular bear market is nearing 13 years now, so historically it's too short to be over.  I think the market will be due for another down cycle perhaps later  this year or next year - again one target could be the upper trendline of this monthly chart.

here's a history of secular markets, as you can see, they last more than 13 years:

2000 - Present, Secular Bear Market, 13 years so far

1982 - 2000 - Secular Bull Market, lasted 18 years

1966 - 1982 - Secular Bear Market, lasted 16 years

1948 - 1966 - Secular Bull Market, lasted 18 years

1929 - 1948 - Secular Bear Market, lasted 19 years

1920 - 1929 - Secular Bull Market, lasted only 9 /1/2 years (shortest one)

1904 - 1920 - Secular Bear Market, lasted 16 years

So as you can see from this history, I would expect this current secular bear market to not be over yet, I think we have one more down cycle to go through. I don't think the 2009 lows will be tested at all, however a 50% - 61.8% retracement could occur, then perhaps after it's over we'll be ready for the next secular bull market to begin in late 2016 or 2017.  See my chart.

Long Term SPX system from 1961:

Of course whatever the market does, my long term long only system will catch the major trends, this system catches the majority of bull market moves and is out during bear markets.  Notice that this system when to cash in Jan 2008 well before the big decline in 2008, then got back long in April 2009 and is still long

• 
  
  
• 
  
  

AAPL weekly chart - trendline coud be tested tomorrow

Here's my weekly chart of AAPL that I've shown many times; as you know AAPL missed on earnings and traded down -$50 after hrs to the $450's; this maybe this long term uptrend line form 2003 will be tested tomorrow

• 
  
  

Here's some recent trade ideas of ours

NOV - Chart Link - inverse H&S pattern from last week, playing out

AUY - Chart Link - gold stock, one of the stronger ones today

GOLD - Chart Link - another gold stock

FWLT - Chart Link - nice

BRLI - Chart Link - pop!

MHR - Chart Link - Pop!

• 
  
  
• 
  
  
• 
  
  
• 
  
  
• 
  
  
• 
  
  

A few pm stocks

GOLD - Chart Link - in regards to my commodity newsletter, here's a few individual gold stocks that I currently own that have been standing out above the rest. Rangold is trying to bounce near the 61.8% Fibonacci retracement, obviously it still has yet to take out major resistance above via the trendlline, but it's holding up well

GG - Chart Link - been one of the better pm stocks lately

RGLD - Chart Link - has been finding support at the 200 day MA, needs to get going, but it's one I'm watching

• 
  
  
• 
  
  
• 
  
  

Commodity Newsletter

I hope everyone had a nice long 3 day weekend as the market was closed on Monday due to MLK. Here's my Commodity Newsletter

Click here to see the Newsletter

good trading,
Matthew Frailey

SPX 60 min follow up

I posted this 60 min chart earlier today, the SPX had a strong intra day rally and got close to the upper trendline of the channel which is resistance - it's logical for the SPX to struggle there, now keep an eye on the MACD which is lagging and forming some negative divergence.

The second chart shows a 5 min SPX chart that I posted on live Breakpoint Trades blog intra day - notice the negative divergence that had set up late in the day via the MACD's and RSI was very extended - nice pullback late in the day.

• 
  
  
• 
  
  

VIX closing up

$VIX - Chart Link - Market is up nicely today, the VIX is also up, obviously folks are buying some protection hedges against their longs and technically the VIX is at a support trendline.  Tomorrow is OPEX as well.

I seem to recall some statistics where the VIX and SPX both close up on the same, day, but I can't remember the results of that

• 
  
  

Market Comments

$SPX - Chart Link - The market continues to push higher, as I said last night and Monday newsletter, I stated off with this daily chart, with the SPX above the 9 EMA, there was no reason to over analyze anything or get too bearish, the 9 EMA continues to act as a spring board.

$SPX - Chart Link - I'm watching the 60 min chart on this move up - watch to see if the upper trendline of the channel will act as resistance - that is also a low risk area for a short for folks like Kalinm 

$SPX - Chart Link - 15 min ascending triangle, this has played out - RSI is overbought now so that's a short term concern - also tomorrow is OPEX, so I wouldn't be surprised to see some consolidation.

$TRAN - Chart Link - Transports continue to be on fire, holding the 9 EMA all along, IYT is the ETF of corse

$BKX - Chart Link - Banks have consolidated again, the MACD line is testing the average for a potential MACD Kiss for another pop and price is over the 9 EMA we'll see.

Otherwise for now monitor the 60 in SPX chart and the upper trendline of the channel and the 15 min SPX

• 
  
  
• 
  
  
• 
  
  
• 
  
  
• 
  
  

AAPL comments

AAPL - Chart Link - as you know AAPL is up today, it was nearing the uptrend line on the linearly chart

AAPL - Chart Link - 15 min chart has a wedge pattern, which is playing out

AAPL - Chart Link - Here's a daily chart and potential wedge scenario - under this scenario AAPL could push higher to fill the gap above, then have another pullback in the wedge, this would be be 5 waves for a much more complete wedge and under this scenario AAPL would still form another low after this bounce is complete.  Obviously earnings next Wed could make or break the chart if the gap is sufficiently large.

• 
  
  
• 
  
  
• 
  
  

AAPL - down again getting closer to the trendline

AAPL (some say Crapple LOL) down again, however it's getting closer to that uptrend line

remember it reports next Wed 23rd after the close

• 
  
  

VIX comments

$VIX - Chart Link - The VIX (which moves inverse to the S&P 500), is at some support area where it may bounce

$VIX - Chart Link - weekly charts shows that this trendline goes back to 2007, so it's quite important

$VIX - Chart Link - short term 30 min chart - has quite a bit of positive divergence, therefore short term it also looks like it wants to bounce some.

• 
  
  
• 
  
  
• 
  
  

Charts of AAPL to keep an eye on

I posted these charts quite a while while back showing the long term uptrend lines on AAPL in the upper $400's, say around $475 - $480 ish.  clearly these trendlines are a magnet and price is being pulled down to them - AAPL is down -$20 this morning to $500.  I think AAPL could be a low risk buy near those trendlines because a very tight stop can then be used i.e. if you are wrong, you stop out for a minimal loss

The first two charts are linear charts showing trendlines back to early 2009, while the third chart is a logarithmic chart showing a longer term trendline back to 2003

• 
  
  
• 
  
  
• 
  
  

Commodity Weekend Newsletter Jan 13th, 2013

I hope everyone enjoyed there weekend!  Here's my weekly review of commodities

Commodities Weekend Newsletter Jan 13th, 2013

 

Moon cycle tomorrow

Tomorrow is the Moon cycle, New Moon. The last cycle marked an inflection point low, will this one mark a shot term high? 

• 
  
  

SPX 60 min

$SPX - Chart Link - nice market move today - again as I stated last night, there was nothing bearish, in fact most of the indexes and sectors looked like bull flags on their daily charts trying to bounce off their 9 EMA's.

Otherwise via the 60 min chart - one thing to watch for now is negative divergence, note this uptrend channel - first off watch to see if the upper trendline of the channel acts as resistance - would offer low risk quick short with a tight stop.  Keep an eye on the MACD, it is lagging, therefore negative divergence could set up but for now it's only a potential and SPX may want to go and test the upper channel trendline.  

Plus as I said last night - SPX is so close to its Sept high, why not at least test it which it's only 2 points from right now

• 
  
  

Coffee analysis

$COFFEE - Chart Link - I had a request via a pm from a member to analyze coffee, here you go: the first chart shows a that coffee is getting close to a long term uptrend line from 2001. Some divergence in place via the RSI, MACD needs help - again this is a monthly chart, so it's gonna take a while to play out

$COFFEE - Chart Link - weekly chart, see the downtrend line and divergence

$COFFEE - Chart Link - daily chart

• 
  
  
• 
  
  
• 
  
  

Follow up to the SPY daily modified system

A follow up from the systems yesterday, the SPY daily modified system exited today on the open as I stated it would yesterday - this system is different than the RSI 2 system (which exited yesterday on the close), it exits longs on the next day open.  

Both the SPY daily RSI 2 and SPY daily modified systems are now flat and waiting on their next trade.  Please don't take their exit as a general sell signal or short for the market, remember that these are reversion to mean systems - they buy pullbacks in uptrends and short rallies in downtrends (they are not trying to short tops), and they are only in the market about 20  -30% of the time - their goal is to get in and get out, not to stay in the market for entire trends

All the systems are now flat, when they do another trade, I will let you know.

below are the performance reports showing all the statistics of the two SPY systems. 

SPY daily modified system performance report

SPY daily RSI 2 system performance report

• 
  
  
• 
  
  
• 
  
  

Just to confirm here's the chart of the SPY RSI ...

Just to confirm here's the chart of the SPY RSI 2 system - as you can see it closed out the long established back on Dec 27th/28th today at the close, very nice trade!!'

Here's an updated Performance report to the system -  click here

The other SPY system, which is the SPY daily modified system will be closing out it's long tomorrow morning on the open.

I will send out an updated Performance report to the SPY modified system tomorrow after it closes out - click here for the current performance report

 

AAPL charts and comments

Here's three charts of AAPL, the first two show long term uptrend lines below that come in around the upper $400's around $475 etc.  Gosh, I would love to see another pullback in AAPL to test or get close to those trendline, I think it would present a buying opportunity at least for a trade, plus a tight stop could be employed just below the uptrend line.  Trading is all about taking trades with good risk/reward and buying AAPL nearing those trendlines with a tight stop would meet that criteria. 

the third chart is a daily chart, shows a downtrend channel

• 
  
  
• 
  
  
• 
  
  

STP and PPHM - two of our recent stop picks

STP - Chart Link - STP doubled for us, we had it as a trade idea in early Dec when it was below $1.10 a share, yes it's down today, but the stock high $2, profits should have been taken

PPHM - Chart Link - here's one of our more recent picks - it is up $73% today, it was up over 90% at the highs.  

These are only two examples and these are cheap stocks, we post tons of trade ideas every week and the majority of them are much higher priced > $10, $50, $100 range etc  These two were just recent examples of some picks

• 
  
  
• 
  
  

Our most recent Newsletter

Hello everyone, Happy New year!  Huge move on the market today and very nice trades for our mechanical systems.  I cover everything in this newsletter in detail so please take the time to review.

Click here to view the Newsletter

also we have a lot of exciting stuff coming to BPT this year so stay tuned...

Matthew Frailey

NYSE new 52 week highs

Very short term this indicator is overbought - so be a little cautious short term.

•