Week 19 (10th May-16th May): Wealth Moo River Watch

cable (sterling/dollar)

(based on 30 year advanced data chart)

Yearly

We have started the year brightly as the candle is turning green now, but momentum indicators are not yet supportive of the bullish scenario.

Quarterly

No significant bullish indication on the momentum indicators yet, but the candles do present a reversal pattern there, if we can break $1.54 this quarter.

Monthly

We are rounding up the bottom on price and momentum indicators.

Price: we are facing the row of red para sar dots resistance soon near $1.60;
RSI: is yet to bounce through 30, can you imagine that, we have not started the bull run yet!

Weekly

This is the most bullish of all, as of indices, the weeklies are where the bulls party merrily.

There is no significant indication of a top yet, though Momentum Indicator might shape up a M there, potentially. Price is hitting bollinger upperband and rsi is hitting one of three upperbanks I have drawn in this upstream moo river, though rsi is only 50.8, more room to go up yet.

Daily

We are almost due for a pullback here, judging from the rsi inside its upstream moo river. A potential M might appear there. A spike and tank scenario is a distinct possibility. Between $1.55 and $1.57, there seems to be a bear camp there.

Though it apppears to be a rounded bottom, you could say it is a head and shoulder pattern as well, with $1.55 as the neckline, so a key challenge is coming up, failing there, we could potentially end up in a flat battle zone below $1.55.


I remain bullish on cable for the medium term, though I suspect a healthy pullback is coming up.


Ps I am going to use cable, Japan and FTES100 as my triple trading screens from now on as they seem to be linked to each other in some curious ways.
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Gold (spot)

(based on 30 year advanced data charts)

Yearly

What do you think of this bull run since 2002? If you were trading gold in 2002, would you be able to ride it to the full run or got stuck shorting it half way through it? I wouldn't be on the possibility that I ride it to the full, it looks like a brilliant bull run, but it must be very difficult to trade it, because you have to be so bull-minded all the way through to buy it all the way up, on dips and dives or just buy it.

When you look at the market, you also feel a chill down your spine as it just shows how powerful a bull run could be and the opposite is true for the bear market too. Markets are irrational and go from one extreme to another, almost like the boom and bust scenario, maybe it is just because it is all part of the human venture, fear and greed, plus deliberate manipulation.

But all good parties come to an end, so when will this gold party come to its end? Though yearly rsi has reached over 83, there is no sign of a reveral yet. How scary!

Quarterly

We are having three rare red para sar dots after so many quarters since 2002. The momentum indicators are tiring or toppish, e.g., rsi having reached 89 and stayed above 70 since Q3 2005. This should teach us more about the use of rsi as well, overbought based on rsi is not to be trusted in a strong trending market.

We have this long running upstream moo river on rsi since 1999 and we have only ever had one full crossing from the lowerbank to the upperbank from Q1 2001 to Q1 2004. This teaches us yet another thing that in strong trending market, full pullbacks from bank to bank is not guaranteed. And strangely, when the next time we have a full crossing from upperbank to the lowerbank (as it is headed now), it might kill off this upstream moo river altogether.

For a rational mind, surely every institutional player with billions of our pension and isa money to play will be averaging up to sell gold to the floor, but strangely, it seems that many of them are still hoarding gold in our portfolios.

Monthly

The superbull trend actually died in July 2008, as it broke its long running upstream moo river since 1997! This seems to have gone unnoticed, with rsi breaking down through its lowerbank and all the momentum indicators collapsing, though price has been artificially maintained at a high level on bearish divergences to add doubts to many a undetermined mind.

Gold is dead for me or it is dying. The luster of gold was gone in July 2008. All that glistens at the moment may not be gold these days. It is just a topping exercise but when the downturn comes, it will be as severe as it came up.

If I won the Eurobillion, I would be selling gold! For now, I stay well away from this wild beast.


Weekly

Strangely, to the unknowing eyes and minds, the death of this superbull trend died in September 2005. Since then, it has been one superparabolic ride to antigravity as we have a downstream moo river on rsi since that time.

While the price tops, rsi is gradually exhausting itself to the downside, so there we can foresee many powerful rallies, but they are bear market rallies as gold is now headed into multi-year bear market.

Daily

At this moment, we don't know whether gold is still in the ABC pondering waves at the top, or we have started the 5 impulsive waves down already, with Mar 2008 to Oct 2008, being the first wave down, now we are in wave 2 or on the way down in Wave 3.

The big boys are repositioning behind the smoke screens and many private investors will be sucked into the glistening charm of gold at the wrong time of history. The boom is gone and the bust is yet to show itself.

I am extremely bearish on gold.


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VIX (May)

This one is headed for my forecasted norm range between 40 and 10, but near term a bouncing up and down between 30 and 35 seems to be possible, as 4hour rsi is eating into 30 and trying to bounce up from there. There are a few gaps on the way down, in the 34's and 33's.

On the yahoo long term charts over the past decades, it seems that VIX has had Wave 1,2,3 and 4, and is still pending a Wave 5 top, which might take it back over 60's.

It seems that there is plenty of indication for another test of the indices low in the future and people who have missed the rally of the stock markets so far are also wishing for another stock market low to load up their investments or longs.

We will have to wait and see.

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Nymex (June)

Oil is the symbol of economic confidence in the world and oil has bounced up nicely.

Daily rsi has just reached 70, which signals a strong bull run.

However, 4hour rsi has falled down out of the upstream moo river and is now trading on bearish divergence. So a pullback is expected, if not a reversal.

The bull run can still continue if price can hold above 54 dollars, on subsiding momentums.

I have the suspicion that oil is not going very far this year, as it is closer to the economic reality than the stock markets, it might meander up and down between 30 and 60 roughly.

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Overall, the wealth moo rivers seem to be suggesting a near term pullback in the stock markets is imminent and plausible and needed.

good luck, bulls and bears, if you do trade them. I simply use them as basis for a correlated finding acrossing the moo rivers.