Bill Cara: Aussie sunset, New York sunrise, Thurs., Aug. 24, 2006, 7:18 AM

« Housing market weakness accelerates, Wed., Aug. 23, 2006, 6:36 PM | Main | Correction noted on May 17 article, Thurs., Aug. 24, 2006, 11:22 AM »

August 24, 2006

Aussie sunset, New York sunrise, Thurs., Aug. 24, 2006, 7:18 AM

If trading on the ASX Australia is any indication, today could be a rough close today in New York. Traders need to look to the East (Australia and Japan) where the sun wasn't shining today.

The 5-day chart at Yahoo Finance shows the break down of the All Ordinaries index today, closing at 4963 (-1.7 pct).

What is significant is that the first 30 minutes and final 30 minutes of today's session experienced huge volume with sharply lower prices. Also the 5000 level, which had been seen as technical support, held in the early morning, then after a failed rally, collapsed in the afternoon, with zero strength on the close.

The very important Japanese Nikkei 225 that some traders refer to as the Nikkei Dow also was significant weak today, closing down -200 points (-1.25 pct) to 15960.

Many of you are aware of the Aussie chartist Colin Twiggs, and that I recommend him. I like the educational materials on his site at www.incrediblecharts.com that every beginning student of the market ought to find useful.

Today, Colin issued an alert on the local All Ordinaries index break-down. This index closed weakly at 4963, and Colin says there is some support at 4900, while the primary Bull market would turn bearish if, as and when the index closes below 4800.

If it does, we are at that point where it will pay (i) to track the key components (international operators) like BHP on the other global exchanges to observe how the peers of that company are faring, and (ii) to track other equity market indexes in the Asia-Pacific region to look for common patterns.

I believe that Australian market cannot break the primary trend and head into a bear phase on its own. Within 60 days, either the ASX recovers or I say that most other broad market indexes will fail. In other words: global Bear market.

I think this is all more than likely to unfold; the only question in my mind is whether the U.S. Authorities can pump sufficient liquidity in the domestic bankers that the stock and bond continue to mask the ongoing Bear that I said started on May 10.

Here is the Colin Twiggs alert. A subscription, for those who can afford it, and who believe at all in technical analysis, would be helpful. He also offers a free Trading Diary.

I like Twiggs as I like Pring and also Murphy. If you average out their technical forecasts, you won't go too far offside. But " and this is an opinion I have held for over 15 years " don't waste your time on the highly marketed technical guru's like Prechter. They tend to "sell" their forecasts and push their followers into extreme action, whereas the Twiggs-Pring-Murphy group have no axe to grind. By averaging out their market interpretations, you will eliminate their biases, I feel.

Posted by Posted by Bill Cara on August 24, 2006 07:18:28 AM | Category: Cara Today in the Market

Discourse

All-

Here are the charts. I hope these links work for you.

http://stockcharts.com/h-sc/ui?s=$GOLD:$GDM&p=D&yr=0&mn=6&dy=0&id=p18346010572&a=77699259&r=504&listNum=2

http://stockcharts.com/h-sc/ui?s=$GOLD:$XEU&p=D&yr=0&mn=3&dy=0&id=p96908351541&a=78718544&r=273&listNum=2

http://stockcharts.com/h-sc/ui?s=$WTIC&p=D&b=5&g=0&id=p94239341509&a=78881052&r=133&listNum=2

http://stockcharts.com/h-sc/ui?s=$USD&p=D&b=5&g=0&id=p94239341509&a=78880988&r=412&listNum=2

http://stockcharts.com/h-sc/ui?s=GDX&p=60&b=5&g=0&id=p72184122246&a=77625538&r=417&listNum=2

http://stockcharts.com/h-sc/ui?chart=$HUI:GLD,uu[e,a]wbclyyay[pb50!b200!d20,2][vc60][iub14!la12,26,9!lp14,3,3!lj[gld]!lya7,14,28][J70809947,Y]&r=376&listNum=2

http://stockcharts.com/h-sc/ui?chart=AEM,uu[e,a]daclyiay[pb50!b200!d20,2!f][vc60][iub14!uh14,3!la12,26,9!lya7,14,28!li14,3!lj[gld]][J72306903,Y]&r=24&listNum=2

As all of you know, I follow gold closely. These are my key charts, along with some others, they provide the tells, but this really is the majority of what you need. (You need to develop your own annotations and overlays!You also need to follow the "story" cycle.) Even with my "mistakes" of the past eighteen months, I have made tens of thousands on gold.

MOVE COMING SOON.

I have written enough here in the past year and one half for anyone following to figure out how I come up with my "educated guesses". Visually, it's all right there. Verbally, it's in my posts. Some of you think I have a good sense for this. You also know my views on that topic. We'll see.

This is a little parting gift.

Good luck and good trading all.

Posted by: MarkM at August 24, 2006 7:59 AM [link]

Going somewhere Mark M ? Hope you come back soon, ive learned a few things from you and enjoyed your posts, along with stockman and option oracle, thanks for the charts and good trading to you as well.

Posted by: tgifbipo at August 24, 2006 8:10 AM [link]

Same here, Mark. I look forward to reading your comments, too, and hope that doesn't stop.

Posted by: number2son at August 24, 2006 8:19 AM [link]

Thanks MarkM.

Safe travels. May the wind be always at your back!

Posted by: Seamus at August 24, 2006 8:44 AM [link]

Rough close? Nonsense! Durable orders are down. The economy is slowing and euphoria reigns. Home sales number soon. If it is down more than expected it will be a scintilating (sp?)chaser to the durable goods number. There will be dancing in the streets and incoherent blather with silly smiles that the Fed is done. There
s good news in that bad news. Yipee. PFFFFFFFFFFFFFTP! How I miss Bill the Cat.

Posted by: Leisa at August 24, 2006 9:21 AM [link]

MarkM,

We sincerely hope yours is a short sabbatical. You are the perfect gentleman and a supremely skilled writer.

Good Sailing!

Posted by: oratier at August 24, 2006 9:28 AM [link]

This is where things get interesting...

Posted by: William Hannon at August 24, 2006 9:39 AM [link]

And don't forget about Europe...

Even though asia was down indicating a bad day...
Europe was up and holding gains - meaning
an up open - this can be a good indication for a quick flip at the open...

tradesman

Posted by: Tradesman at August 24, 2006 10:00 AM [link]

MarkM,

OK, I'm a little dumb (OK, very dumb) but I was unable to figure out the direction of the likely move that you see from the charts posted. Would you (or some other pundit here) please explain what you see from these charts (i.e. direction of move etc) and how you see that? Thanks a bunch.

Posted by: Kaushik at August 24, 2006 10:31 AM [link]

MarkM,

Your wisdom and the clarity of your posts have been much, much appreciated. Thank you.

If I may add to Kaushik's comments, perhaps just one last example on how/what you see on these charts would be most welcome. I know you have posted extensively, it's a ton of information.

Take good care. Hope you hear from you again.

Posted by: ursus at August 24, 2006 10:42 AM [link]

Bill:
Many of us are not knowledgeable enough to interpret the charts MarkM has listed above.
Can anybody tell us what the chart is telling us in simple terms? Up ? Down?

Posted by: JogyP at August 24, 2006 11:02 AM [link]

Where are you going that doesn't have an internet MarkM?

Did you sell your computer?

Do you mean you will never comment again on this site?????

Chief Falling Knives ;)

Posted by: C.Note at August 24, 2006 11:15 AM [link]

JogyP--

The simple explanation is that everybody is a genius in a rising market.

Tongue in cheek here...:)

Posted by: smess at August 24, 2006 11:18 AM [link]

Bill

Venezuela (VZ) President Chavez is visiting China this week. Vz has growing oil sales with China.

One of Chavez's stops will be in Shandong Province where he will meet with coal and gold companies. Shandong Gold Group(symbol 600547 SH) is developing a gold mine in VZ.

I wonder if the FLY would provide his perceptions on the visit as well as Shandong Gold Group?

No position.

Posted by: Seamus at August 24, 2006 12:20 PM [link]