Monday Morning Chartology 5/23/11
Steve Cook on Disciplined Investing

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The Market
    
    Technical

       Monday Morning Chartology

    The Averages (DJIA 12512, S&P 1333) closed Friday within their intermediate term up trends (12212-15630, 1284-1713).  However, the S&P has broken its short term up trend and re-set to a trading range: if the DJIA closes below 12604 today, it will also confirm the break down of its short term up trend.

    On the S&P chart, I have included a boundary of a short term down trend as a measure of resistance.  1328 has set itself as an initial support level.







    GLD initially followed the same pattern as the S&P, i.e. reset to a short term up trend, then reversed itself.  However, unlike the S&P it has regained the lower boundary of that prior short term up trend.  But since our time and distance discipline had already confirmed the break down of the short term up trend, I am not sure which is the head fake:  the initial break down of the short term up trend or this most recent surge to close back within the boundaries of the short term up trend.  So for the moment, our Portfolios are taking no action to our GLD holdings.







    The VIX has been volatile but directionless.  It has developed the right shoulder of a head and shoulders formation.  Now we wait to see if it completes the formation.







    One measure of breadth continues to deteriorate (short):
    http://www.investmentpostcards.com/2011/05/20/sp-500-%e2%80%93-the-%e2%80%9csoldiers-are-deserting%e2%80%9d-says-richard-russell/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+wordpress%2FVYxj+%28Investment+Postcards+from+Cape+Town%29

    OK, more than one (charts):
    http://www.investmentpostcards.com/2011/05/22/sp-500-%e2%80%93-possible-market-top/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+wordpress%2FVYxj+%28Investment+Postcards+from+Cape+Town%29

   Fundamental
           
    The latest report from the World Gold Council (medium):
    http://www.zerohedge.com/article/investors-pick-physical-gold-over-etfs-q1-comex-registered-silver-just-hit-fresh-all-time-lo

 
Economics

   This Week’s Data

    The Chicago Fed’s national activity index fell to -.45 in April versus a +.32 reading in March.
    http://www.calculatedriskblog.com/2011/05/chicago-fed-economic-activity-weakened.html

   Other

    The ECRI index continues to point to economic weakness (medium):
    http://www.investmentpostcards.com/2011/05/20/how-severe-will-a-us-economic-slowdown-be/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+wordpress%2FVYxj+%28Investment+Postcards+from+Cape+Town%29

    And another sign of trouble (short):
    http://www.capitalspectator.com/archives/2011/05/is_the_treasury.html#more

    The latest from Jim Grant (medium):
    http://www.google.com/hostednews/ap/article/ALeqM5jrHwNb_YI8pyuJrtuFZCzh7e6e3g?docId=e5d3977569ef4ffa971883906f09e0a0

    A brief history in currency debasement (short):
    http://www.businessinsider.com/chart-of-the-day-silver-content-in-roman-coins-2011-5?utm_source=Triggermail&utm_medium=email&utm_term=Clusterstock%20Chart%20Of%20The%20Day&utm_campaign=Clusterstock_COTD_052011

Politics

  Domestic

  International

    The EU (Greek) sovereign debt problem gets more complicated (short):
    http://www.zerohedge.com/article/norway-stops-aid-payments-greece









Posted 05-23-2011 8:20 AM by Steve Cook