DOW                                                   – 313 on 2550 net declines

 

NASDAQ COMP                                     – 143 on 1950 net declines

 

SHORT TERM TREND                            Bullish

 

INTERMEDIATE TERM TREND                Bullish

 

STOCKS :  The stock market had a lot to contend with on Monday. The IMF said that the World economy was slowing more than expected. Health care stocks continued to decline on fears of Congressional oversight on pricing. There was more evidence of a slowdown in China and William Dudley of the NY Fed, stated that a hike in rates was very possible. 

       We’re close to a full retest of the August lows, but I’m going to hold off on turning bearish. Tuesday should be higher. Check out the chart below.  

 

GOLD:  Gold was down $14. This in spite of World turmoil and a dropping dollar. The yellow metal is still making a rising bottoms pattern on the daily chart.

 

CHART:  The Trading Index was 2.17. When it’s over 2.0, the next day tends to be higher. This has held trued on 9 out of the past 11 times. The exceptions were the waterfall decline in late August.

 

 

BOTTOM LINE:  (Trading)

Our intermediate term system is on a buy as of August 26.

   System 7   We are in cash. Stay there.        

   System 8   We are in cash. Stay there.                    

GOLD  We are in cash. Stay there.     

 

News and fundamentals:  pending home sales dropped 1.4%. The consensus was for a rise of 0.5%. The Dallas Fed Mfg. Survey was minus 9.5, worse than the expected minus 9.0.  On Tuesday we get the trade deficit, the Case Shiller Home Price Index and consumer confidence.        

 

Interesting Stuff : We get the trade deficit tomorrow. Look for it to be well in excess of $50 billion. Economists tell us that there is nothing to worry about. Shipping all that capital overseas month after month, year after year is OK.  I would like to ship the entire lot of them overseas.

 

TORONTO EXCHAN GE:   Toronto was lower by 374.                

S&P/TSX VENTURE COMP: The TSX was down 14.          

BONDS:  Bonds fell back slightly.                                                                                          

THE REST:  The dollar was lower. Silver was down sharply and crude oil was down.                                             

 

Bonds — Bullish since September 4.                           

 

U.S. dollar — Bullish since September 21.                            

 

Euro — Bearish since August 26.

 

Gold — Bullish since September 24.                              

 

Silver– Bearish as of since Sept. 22.                          

 

Crude oil —- Bullish since September 16.                               

 

Toronto Stock Exchange—- Bullish since August 27.    

 

S&P\ TSX Venture Fund — Bullish since August 27.    

 

We are on a long term buy signal for the markets of the U.S., Canada, Britain, Germany and France.  

 INDICATOR PARAMETERS

     Monetary conditions (+2 means the Fed is actively dropping rates; +1 means a bias toward easing. 0 means neutral, -1 means a bias toward tightening, -2 means actively raising rates). RSI (30 or below is oversold, 80 or above is overbought). McClellan Oscillator ( minus 100 is oversold. Plus 100 is overbought). Composite Gauge (5 or below is negative, 13 or above is positive). Composite Gauge five day m.a. (8.0 or below is overbought. 13.0 or above is oversold). CBOE Put Call Ratio ( .80 or below is a negative. 1.00 or above is a positive). Volatility Index, VIX (low teens bearish, high twenties bullish), VIX % single day change. + 5 or greater bullish. -5 or less, bearish. VIX % change 5 day m.a. +3.0 or above bullish, -3.0 or below, bearish. Advances minus declines three day m.a.( +500 is bearish. – 500 is bullish). Supply Demand 5 day m.a. (.45 or below is a positive. .80 or above is a negative). Trading Index (TRIN) 1.40 or above bullish. No level for bearish.

      No guarantees are made. Traders can and do lose money. The publisher may take positions in recommended securities.