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Market Comment April 19 2013

Once again most of my indicators are forecasting a correction and right on time for Sell in May.

Here is one of the most reliable indicators the YP Primary Sell.


(don't forget to click on any graph to see it enlarged)

I can tell from a lot of experience that, barring some huge news, once you pass zero on this indicator -- tis lights out folks.  This indicator last passed below zero in mid October, 2012. You can check your charts for that period.

The next chart below is the VIX trick, as you can see when it shows red, often things don't go well. This indicator does show false warnings about 20% of the time, it is not perfect.


Next Up the NASDAQ summation index, this is a very unreliable indicator, seldom more useful than just looking at price of the QQQ, but clearly the Nasdaq is falling apart.



As you know I love the NYSE percentage of stocks over the 50MA. This version of the chart has added macd above it to make the signals faster and more obvious. The situation continues to fall apart.  .  . .


Finally an elegant and simple graph, showing price over a lot term average. As you can see the US version of this graph is overbought and should pull back mildly.


However my sentiment on the Canadian markets is not so kind. To short Canada, I am long the HIX ETF. Canada is; over taxed,  no diversification, dropping productivity and too strong a dollar. Some 60% of Canadian listed firms are miners or the Oil industry and its partners. Most of the Canadian market is commodities so it is a bit of a "banana republic". I expect the commodity bubble to whack the TSX very hard. I also expect the Canadian dollar to trade at $.90 to the US dollar in a few months. If you ever trade in to US funds this would be a great time to move some Cdn $ in to USD.


Typical of the Canadian problem is Teck Resources. This stock has been hurt by overpaying to buy Fortis Coal, a poor outlook for base commodities and lets say some "overly generous" accounting standards.

  I am back in HDGE again as I gear up for a sell off in the next two weeks.

The VIX is the fear indicator as the market smells trouble this indicator rises. So another way to short the US Market is play VIX futures. If you don't have a futures trading account you can buy VXX the VIX ETF proxy. It does well in times of fear.

The way I bought VXX, was to put a buy on stop order, at about three times the average true range, every few days I would adjust it down, in effect it is like a trailing stop, but this was a trailing buy!

The great thing about a trailing buy is you only jump in if trouble does happen and it is automatic! Sure enough (just off the bottom) my account suddenly bought VXX in time for the rise!

I also have a position in DUST, the 3X inverse ETF of Gold Miners. Gold miners are in deep trouble, many have a cost of production over $1,500 an ounce -- at least on their recent acquisitions. If gold drops below $1,000 per ounce all of the industry is in big trouble. I can see a drop to $700/oz as possible.
As you should know: juiced ETFS are not for long term holds. Sell at max profit! - try a 13% trailing stop.
For more on that danger watch this video http://youtu.be/jUqDWlilcG0

If you look at what I am holding right now, I really have my Bear suit on:


ADVISORSHARES TR RANGER EQTY B - HDGE:US
AUTOMODULAR - AM (reduced position)
BARCLAYS IPATH S&P 500 VIX SHO - VXX:US
DIREXION SHS ETF TR DAILY GOLD - DUST:US
EXCHANGE INC CORP - EIF (reduced position)
HBP NYMEX CRUDE OIL BEAR PLUS - HOD
HBP S&P/TSX 60 INVERSE ETF -HIX

So get ready to for a pull back, get out your bear suit!!













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Yet another parabolic up week for the markets. Honestly folks valuations are really stretched here. The air is so thin at this altitude. Then again the markets can and do (on a short term basis) anything they want. Still I would expect a little pull-back in the next two weeks.


Lets see what is in the charts this week:

CLICK HERE: To see the 100 and 200 series charts



101 Bull Bear Bull market (dark green over red) and now the short term (light green) is up sharply. Also note the dark green 50 day average is in a firm uptrend. NOTICE THE SLOPE (second window), this could be part of a new long term uptrend.Bull market -- expect bullish outcomes…