Saturday, October 15, 2011

15 Oct 2011 (U.S. Energy Consumption, Gold Vs. Silver Vs. Nasdaq Vs. Gold 70s Vs. Silver 70s)

 Updated through Friday's close.
 Data only exists currently through June 2011.
Same for this except for based on what percentage Jan - Jun '10 was for all of 2010, I extrapolated the 2011 number based on Jan - Jun '11 numbers.

Hold long in the medium term greater than 50% for the first time in months.

Too bad it coincides with an extremely overbought short term.  Note this actually turned up on Friday, but considering the indexes made a new high, this is considered a "micro" divergence.

I have been posting that this rally actually "began" in August - around the 8th or 9th to be exact - see my spikes in short term and medium term indicators.  Ok, so why would that matter?  Well, it matters because the "capstone" of rallies usually is the most excessive because finally the weakest stocks (see dry bulk) get drug into the mix of the rally also.  Meanwhile the leaders of that rally start to slow down - see pharma, gold stocks and tech.  This can also be seen by the lack of 52 week highs.  See the McClellan Summation bottom and positive divergence as well as the stochastics and TSV.  All are quite high for this cycle.  Those who think they might be missing out at this point and want to buy now - you actually are quite far behind - about two months to be exact.
This also exhibits that this cycle is hitting the blow off portion.  The white line at the top indicates the latest close.  Only a few "candles" the past four years have ever closed this high.  Also note the positive divergence between the bottoms.  Yes, this does show strength, but it also shows that you SHOULD (I bought in August, didn't buy this most recent bottom, but did cover short term shorts during it) have bought at either one of those bottoms - not at the peak.  Therefore, I will say that anyone considering buying here or panic short covering should think twice:  your odds aren't all that great.

Should have / would have don't really matter except for learning from it, but just because you make a mistake once, doesn't mean you should make another mistake on top of it.

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