Bi-Weekly Stock Barometer Newsletter 10/29/7

 

Stock Barometer Analysis

 

The barometer remains in Sell Mode. 

 

The Stock Barometer is my proprietary market timing system.   The direction, slope and level of the Stock Barometer determine our outlook.  For example, if the barometer line is moving down, we are in Sell Mode.  A Buy or Sell Signal is triggered when the indicator clearly changes direction. 

 

Stock Barometer Cycle Time

 

Monday will be day 13 (a fib number) in our Down Cycle - good timing for a reversal.

 

The Stock Barometer signals follow 5, 8, 13, 21 and sometimes 34 day Fibonacci cycles that balance with 'normal' market cycles.  Knowing where you are in the current market cycle is important in deciding how long you expect to maintain a position.

 

Potential Cycle Reversal Dates

 

2007 Potential Reversal Dates:  1/10, 1/14, 1/27, 1/31, 2/3, 2/17, 3/10, 3/24, 4/21, 5/6, 6/15, 8/29, 10/19, 11/29.  We publish these dates up to 2 months in advance.

 

With our next date 11/29, it's likely that the market will take us up into that date.

 

My Additional timing work is based on numerous cycles and has resulted in the above potential reversal dates.  These are not to be confused with the barometer signals or cycle times.  However, due to their past accuracy I post the dates here. 

 

2006 potential reversal dates: 1/16, 1/30, 2/25, 3/19, 4/8, 5/8, 5/19, 6/6(20), 7/24, 8/20, 8/29, 9/15, 10/11, 11/28.  2005 Potential reversal dates based on 'other' cycle work were 12/27, 1/25, 2/16, 3/4, 3/14, 3/29, 4/5, 4/19, 5/2, 6/3, 6/10, 7/13, 7/28, 8/12, 8/30-31, 9/22, 10/4, 11/15, 11/20, 12/16.

 

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The following work is based on my spread/momentum indicators for the QQQQ, GLD, USD, USO and TLT.  They are tuned to deliver signals in line with the Stock Barometer and we use them only in determining our overall outlook for the market and for pinpointing market reversals.  The level, direction, and position to the zero line are keys in these indicators.  For example, direction determines mode and a buy signal 'above zero' is more bullish than a buy signal 'below zero'. 

 

QQQQ Spread Indicator (NASDAQ:QQQQ)

 

 

 

The QQQQ Spread Indicator will yield its own buy and sell signals that may be different from the Stock Barometer.  It's meant to give us an idea of the next turn in the market.

 

Gold Spread Indicator (AMEX:GLD)

 

 

 

To trade Gold, utilize the Gold ETF AMEX:GLD.  This gives us a general gage to the overall health of the US Economy and the markets, as well as to assists us in the entry of positions in our stock trading service.

 

US Dollar Index Spread Indicator (INDEX:DXY)

 

 

 

To trade the US Dollar, I'd utilize the Power Shares AMEX:UUP: US Dollar Index Bullish Fund and AMEX:UDN: US Dollar Index Bearish Fund.

 

Bonds Spread Indicator (AMEX:TLT)

 

 

 

To trade Bonds, I recommend Lehman’s 20 year ETF AMEX:TLT.  Note that the direction of bonds can have an impact on the stock market.  Normally, as bonds go down, stocks will go up and as bonds go up, stocks will go down.

 

OIL Spread Indicator (AMEX:USO)   [color= red;]*NEW*[/color][color= red;][/color]

 

 

 

To trade OIL, utilize AMEX:USO, the OIL ETF.  We look at the price of oil as its level and direction can have an impact on the stock market.

 

Supporting Secondary Indicator

 

Here's a closer look at gold.  With the spike in gold prices - but the short term sell signal above, we take a look at the gold/xau relative strength to see if gold prices are being reflected in the prices of gold stocks.  When that momentum wanes, it suggests that the market is close to a reversal.

 



 

I monitor over a hundred technical indicators, some that are widely followed and some that are proprietary.  These indicators break down the market internals, sentiment and money flow and give us unique insight into the market.  I feature at least one here each day in support of our current outlook - and to give you an education on what professional traders utilize.

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Summary of Daily Outlook

 

The barometer remains in Sell Mode - as we're looking for a reversal early next week.

 



 

If the likelihood is that the market will move higher on Monday, then why wouldn't we move into buy mode now?  The answer is, because for this service, we follow the barometer signals.  Sometimes the signals will get us into market moves early, sometimes right on and sometimes late.  And you never know what the market is going to do when we get a signal - although the positive seasonality is well understood in the markets.

 

Here's our seasonality chart along with the 9 month cycle chart.  There are many ways you can use our service and this is a great one for longer term investors - knowing when and where to put longer term money to work is an added benefit of the DSB. 

 

 

 

If you're interested in following our signals and learning more about our system, then [color= navy;]I invite you to click here and subscribe to the daily service[/color] - since the market can turn on a dime and so too can our interpretation as the market gives its daily clues to the future.  Or sign up for our[color= navy;] free weekly TRADE TUTOR newsletter[/color], where we provide up to date articles from our various trading services.  Trade stocks?  [color= navy;]Click here to get our EXPLOSIVE STOCK alert stock recommendations and updates for only $9.95/month[/color].

 

If you have any questions or comments, email me at Jay@stockbarometer.com.

 

Regards,

 

Jay DeVincentis

 

Trading involves high risk.  Past results are not indicative of future returns.  Stockbarometer.com and all individuals affiliated with Stockbarometer.com assume no responsibilities for your trading and investment results. [color= black;][/color]

 

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