A Bearish Turn in Gold

Just a quick note regarding gold. In my September 20th posting I said “…it is the level 3 chart which would trigger sells on all three levels. That is, a break of the FoxPulse3 Beta-X trendline would immediately make this index a 0% bullish allocation!” That has now happened. All five FoxPulse charts are now bearish on gold. Shown is the latest FoxPulse2 chart.

Two Levels Turn Bearish on Cash SP500

In my September 24th posting I said “The line in the sand at both this [FoxPulse1] and the FoxPulse2 level would be a break of the horizontal trend line (in cyan) at 1681.96.” That level was broken yesterday and so these two levels (the Short and Intermediate) are now both bearish. Therefore, the aggregate reading on the cash SP500 is now 50% bullish. The FoxPulse1 (chart shown) will again turn bullish with a move above 1703.85 (green horizontal trend line) while it would take new highs to turn FoxPulse2 back bullish.

Note: The blog will not be updated again until October 9th.

The Level 1 (Short Term View) on Ten Year Bond Yields

This posting concludes the series of posts on the ten year bond yield. The FoxPulse5 and FoxPulse4 were bullish but each showed that a downward moving (in terms of yields) pulse was underway. Both the FoxPulse3 (medium term view) and FoxPulse2 (Intermediate term) have recently turned bearish.

The FoxPulse1 (Short term view) chart is shown today with the analysis beginning on August 27th. A bearish signal was generated when the Beta – X trendline was broken on September 11th. With the Y pulse not able to exceed the Delta peak we knew we had a new short term series underway from the September 5th high in yields.

It is clear that a bear trend is unfolding and that we are in the final pulse (Z) of the series that began at the September 5th high. That does not mean that the next series of pulses must break the down trend! At this point the chart will only turn bullish if; once the Z pulse completes, the Alpha pulse can break the Delta – Y trendline that is depicted in orange.

To recap, Levels 5 and 4 are bullish while levels 3, 2 and 1 are bearish on the ten year yield. Using the percentages presented September 19th, the aggregate reading on rising bond yields is only 15% bullish at this time.

The Level 2 (Intermediate Term) View on Ten Year Bond Yields

Today continues the series of posts on the ten year bond yield. The first three charts in the series were the FoxPulse5, FoxPulse4 and FoxPulse3. The first two views (long and medium-long) were both bullish but each showed that a downward moving (in terms of yields) pulse was underway. The FoxPulse3 (medium term view) turned bearish on September 16th.

The FoxPulse2 (Intermediate term view) chart is shown today with the analysis beginning on July 3rd. It shows a complete trending series of pulses (Alpha – Beta –Delta – X – Y  -Z) that ended on August 27th and brought higher yields. A new series then started on that date. After the FoxPulse3 turned bearish on September 16th, it was a bearish signal on the FoxPulse2 when the Alpha Pulse base (August 27th low at 27.07) was broken. This occurred on September 18th.

Confirmation that we are now in a bear market at this level (FoxPulse2; Intermediate view) is shown by the RSI. It has now broken below the support zone reserved for bull markets.

The price pulse model says that this chart will remain bearish unless the next upward pulse (Delta) breaks the current Alpha peak (29.84).

I will look at the FoxPulse1 chart next. To recap, Levels 5 and 4 are bullish while levels 3 and 2 are bearish on the ten year yield.

The Level 3 (Medium Term) View on the Ten Year Bond Yield

Today continues the series of posts on the ten year bond yield. The first two charts in the series were the FoxPulse5 and FoxPulse4. Those views (long and medium-long) were both bullish but each showed that a downward moving (in terms of yields) pulse was underway.

The FoxPulse3 (Medium term view) chart is shown today with the analysis beginning where the FoxPulse4 Y pulse began on May 1, 2013. The pulse structure shows a trending Alpha – Beta –Delta – X – Y formation that just ended at the beginning of this month. Note that going into mid-May the RSI (top pane) broke above the resistance zone reserved for bear markets. Then, after hitting the resistance zone reserved for bull markets in late June, a long series of lower RSI readings ensued while 10 year yields continued to move higher. This long period of bearish divergence was culminated when the currently unfolding Z pulse broke the Beta – X trendline a week ago today.

About to confirm this bearish development is the RSI, which is about to break definitively below the support zone reserved for bull markets.

The price pulse model says that this chart will remain bearish unless the Y pulse peak (29.84) is broken.

I will look at the FoxPulse2 chart next. To recap, Levels 5 and 4 are bullish and level 3 bearish.

The Level 4 (Medium-Long) View on the 10 Year Yield

Today continues the series of posts on the ten year bond yield. The first chart in the series was the FoxPulse5. That long term view was bullish but showed that a downward moving (in terms of yields) Beta pulse was underway.

The FoxPulse4 chart is shown today with the analysis beginning where the FoxPulse Alpha pulse began in July 2012. The pulse structure shows a trending Alpha – Beta –Delta – X – Y formation that just ended at the beginning of this month. Note that going into July 2012 the RSI (top pane) was reading less than 38 and thus indicating a bear market. Then, as shown in the last post, the RSI bounced and was able to hold the bull market support zone (see arrow in late August 2012). It then exceeded the zone that would typically contain continuing bear markets in June 2013 (arrow on chart). Now, as our Y pulse has topped, the RSI is showing bearish divergence with the price action.

The RSI action confirms that a downward Z pulse is underway on this medium-long view (level 4). However; the price pulse model says that this is only a correction within a larger bull market unless the Beta – X trendline is broken (shown in orange). But that trendline is well below the market. How deep of a correction is at hand? Should a bull ride it out? Perhaps the lower level FoxPulses will help answer those questions.

I will look at the FoxPulse3 chart next.