All indexes daily trends are now up.

Dow and SP500 are leading the markets higher. Dows uptrend can reach the 11.900 area with the bear market still in place. A move above 12.000 could change the bear market classification. Today is the last trading day in August and tomorrow the 8 months MA will turn down for the second time. There is still a technical chance during September to get out of the bear market for Dow and SP500.

The European indexes are following Dow but so far in a very timid way and I see no chance for any of them to change the bear market status at present. The most likely scenario for these indexes is to move up maximum 61,8 percent of the total fall from Julys top and then top out and fall to a new low.

This will all take time, maybe a few months until the next serious drop occurs.

The fundamental situation has not changed at all. The recession signs are still coming in from most countries and there is no strong indication that a recession can be avoided. Yes there are small news to trade on upside now and then but the big picture still look the same.

The best analysts in the world disagree about the main trend. One famous chartist urges the americans to be fully invested now expecting Dow and SP to take new highs. Others see a 1930 scenario coming with start very soon.

I still want to stay in cash with no positions regarding the indexes for the moment.


Dow and SP500 have now started their correction rallies.

Dow and SP500  got above the earlier correction top and are now technically in a daily uptrend which can go much higher and last long. Next target will be the falling 8 week MA.

European stock indexes are up but lack the strong technical picture that the U.S. indexes have.


U.S. indexes close week just below resistance level.

The Bernanke speech lifted the U.S. indexes on upside to close the week just below the 21 day MA:s.
Dow and SP500 now seems to  load for the long awaited correction rally which might start this week. On Tuesday the 8 day MA will finely turn on upside giving a clear signal to cross the 21 MA.

The European markets seems less agressive but use to follow the American indexes in situations like the current.

I must admit that the last two weeks have been very difficult to predict the short term trend because the markets has been so volatile and changed the hourly trend very often. My job is to write about the long term trends and they are still very much in place but I know that many want me to tell my view of the short time picture which is not my speciality and I am doing my best.

The so called robot trading get bigger ad bigger and the computers which trade on all markets get smarter and smarter. I have seen the start of it and got used to it in the currency markets during the 1990:s. The result of this computer trading which only works on the short trends sometimes makes it impossible to tell what will happen the next few days. So when I talk about the short term trend it often get changed by a sudden intervention of computer trading that sudenly pushes the market very high and then turn around to send the trading to a new bottom. Day traders usually know this fact and many loses money so often that they stop trading. In the currency markets it is said that only 5 percent win.


All markets are awaiting Bernanke speech for the next move

On Thursday the Dow and SP500 made a quick move up and hit the 21 day falling MA. There after these indexes fell the whole session to close just above the falling 8 day MA. . European indexes did not make the same rush up but fell to close beelow the 8 day MA. Asia trading has been very calm this morning.

Todays trading until CET 16.00 is expected to be slow and then a powerfull move up or down on Bernankes speech. The short trends are mixed.


U.S. indexes push through falling MA and closes on top.

The Dow and SP500 worked themselves up through the falling 8 days MA to close on high. The hourly trend is now up and the target seems to be the correction top which is just below the 21 day falling MA.

The European indexes which are traded until CET 22:00 followed the american indexes. These are CAC, DAX and FTSE. The trend is up regarding all indexes now. IBEX, SWED and MIB which close at CET 17:30 will jumpstart Thursday morning in Europe.

The U.S. analysts are looking forward to a speech Friday at CET 16:00 by the Fed chief Bernanke which most likely will have a big effect on the markets. The question is if the central bank will give more stimulus to the economy and if so, when.

A positive speech could send the market above the correction top. Such a move could start a strong correction upwards. For now the markets are volatile and the trends are up.

CET 13:20 Tuesday's small move on upside halted in Asia and Europe.

The U.S. players tried to start an upside trend last hour in New York. FTSE, DAX and CAC followed. The 8 days falling MA stopped effectively the move. Today this MA has fallen more and today's trading is below the MA.  The MA will fall further the rest of this week plus Monday unless the U.S. traders mange to cross the MA on upside. It is very seldom a move manages to go through a falling 8 days MA.

However this August drop has been very special so there is a small chance they will succeed if they try hard in low turnover. The big players want to start a short covering rally  because there are no fundamental reasons to buy now. Even if they manage to take the markets  through the 8 MA they will run into the falling 21 day MA which will send the trading back to the 8 MA in one or a few days time.

The big picture is clear and unshakable. The markets are in a bear market and there is no signs of any fundamental or technical facts that could change this.

It is more likely that we might see a fall today or the next three days. I prefer just to watch the stock markets right now without positions

Gold made a new drop yesterday creating a so called key reversal which means that the top of the trend was seen yesterday if the coming days gold does not get above 61.8 % of yesterdays bar.

UK oil is around 108 dollar per barrel and the weekly chart tells me that from next week the technical picture will start to deteriorate and continue to do so for at least a month. I am still recommending short positions at current level to hold for a long period of time.


CET 07:15 Main indexes short trend now sideways

Mondays trading and trading in Asia today have changed the short trend from down to sideways. It is now not sure how the market will perform today. A break on upside is possible for the Dow and SP500 as well as sideways trend and a break on downside.

The big trends are still down.


The German DAX index has lost 27 percent in 3 weeks. What is next?

DAX is the only index that have closed below earlier lows. SWED took a new intraday low but closed above earlier lows. The rest of the indexes look the same. They have a bit more to fall to look dangerous so far. They can get a double bottom or move up from here. However all MA:s from 2 hour chart to weekly charts points down, that is the trend is down and the upside is not likely.

Investors should still not buy but wait. Traders should take short term positions and short the indexes.

There are no fundamental things that are good enough to change the trend. I expect more gloomy news next week. Since every one seems to know about a coming long recession the buyers are few and if the potential sellers nervs get frayed again sharp drop could easily happen. The one week correction that happened was very weak and it tells me there are not many bulls out there.

My warning signal for a break on downside June 6 has been taken seriously according to emails especially when the same thing happened in 2007 and 2008. Only during three weeks in August has
DAX lost 27 percent. MIB 24, SWED 22, CAC and IBEX 20, FTSE 19, SP500 15 and the Dow 12 percent.

Gold has taken a new high telling me that problems in the stock markets are not over and the same goes for the dollar. The Swiss currency has disconnected from the gold since three weeks because of political resons in Switzerland.

Oil has made a rally and I think now is a good time to take long term short positions. The weekly MA:s have a clear sellsignal. It might take a little time before the big drop comes.

For new readers my email address is olle.ahlmark@gmail.com.


U.S. stock index futures fall sharply as investors around the world dump equities on growth fears, with banks posting among the sharpest losses.

CET 17.00

At CET 02.00 Asia started to sell the stock market indexes from all over the world. At 6.00 came a sell signal on the 2 hour charts and Europe started to sell at 9.00. In the U.S. the big indexes fell to new days lows. Right now it looks like the upside correction is over and the markets will test August lows. Dax is the worst off index and it has been just a few points above August lows at this time.

There are five hours more to be traded in the U.S. Here the Philly Fed index came out far below expectations. More information from all over the globe is coming in with weak economic numbers and now even U.S. banks are starting to talk about recession.

The stock markets short trend is very difficult to predict in this environment. Today's sharp drop on downside below a rising 8 days MA happens very seldom.

Crude oil fell sharply and Gold has taken a new high.


CET 09.40 Markets moving sideways in Europe after no change in slow U.S. trading

All markets are moving slowly on upside or sideways. No sign of moving out of the last two days small range. U.S. PPI today at 12.30 might give some impetus to move either way. If markets don't move on downside today the 8 day MA will turn up and by doing so setting a floor under the indexes. Then there use to be a run up to the falling daily 21 days MA. So far the markets have been sleepy since Last Friday and I get the feeling that there are not enough traders who want to run for the upside. Economic forecasters is trying to make a story of the European debt crisis again and put the blame on Europe why the U.S. does not move. The truth of the matter is in my opinion that the U.S. and Europe are both stalling into recession and they don't understand what is wrong with the economy.

Many people and traders have lost very big sums of money so far in August and they might still lick their wounds instead of moving back into the market. But the very big traders are probably the winners and they will sooner or later come out and fight for short proffits again.

The Swiss franc has made a very good move on downside and I know that several of my readers has maid good profits so far. CHF is in a difficult situation on political rumors in Switzerland how to take down the overvalued currency. Gold on the other hand is on its way to test the old High.

Oil or Crude charts seem to break on downside soon, a new oportunity for short sellers.

For private consultations my email is: olle.ahlmark@gmail.com.


Euro Area Economy almost stalling. Indices drop a little so far.

Bad news influence upside correction. Small drop so far at CET 1:15. Could influence upside daily trend.

Gross domestic product in the 17 nation euro area rose only 0,2 percent. Germany rose even less, 0.1 percent in the second quarter. Market had expected 0,5 percent. This is in line with what I have expected meaning that we are very close to recession or maybe already in it.

Trading Friday and Monday and so far Tuesday has been very slow but on upside but no rally so far. Since the news broke the slow markets sold off a little. Waiting for the U.S. to open and show the way if the upside trend is broken or not.


The Great Depression, New York Times

This is a very good and easy to read article I found i NT. We are close to a recession now and unemployment is 10 % in the U.S. At the top of the Great depression it was 24,9 %. The Dow then fell more than 80 %. But there are economist who thinks the GD could be repeted. I have no opinion more than we will probably go into a recession and then we will see.

A Short History of the Great Depression
By Nick Taylor is the author of “American-Made,” a 2008 history of the Works Progress Administration.
The Great Depression was a worldwide economic crisis that in the United States was marked by widespread unemployment, near halts in industrial production and construction, and an 89 percent decline in stock prices. It was preceded by the so-called New Era, a time of low unemployment when general prosperity masked vast disparities in income.
The start of the Depression is usually pegged to the stock market crash of “Black Tuesday,” Oct. 29, 1929, when the Dow Jones Industrial Average fell almost 23 percent and the market lost between $8 billion and $9 billion in value. But it was just one in a series of losses during a time of extreme market volatility that exposed those who had bought stocks “on margin” – with borrowed money.
The stock market continued to decline despite brief rallies. Unemployment rose and wages fell for those who continued to work. The use of credit for the purchase of homes, cars, furniture and household appliances resulted in foreclosures and repossessions. As consumers lost buying power industrial production fell, businesses failed, and more workers lost their jobs. Farmers were caught in a depression of their own that had extended through much of the 1920s. This was caused by the collapse of food prices with the loss of export markets after World War I and years of drought that were marked by huge dust storms that blackened skies at noon and scoured the land of topsoil. As city dwellers lost their homes, farmers also lost their land and equipment to foreclosure.
President Herbert Hoover, a Republican and former Commerce secretary, believed the government should monitor the economy and encourage counter-cyclical spending to ease downturns, but not directly intervene. As the jobless population grew, he resisted calls from Congress, governors, and mayors to combat unemployment by financing public service jobs. He encouraged the creation of such jobs, but said it was up to state and local governments to pay for them. He also believed that relieving the suffering of the unemployed was solely up to local governments and private charities.
By 1932 the unemployment rate had soared past 20 percent. Thousands of banks and businesses had failed. Millions were homeless. Men (and women) returned home from fruitless job hunts to find their dwellings padlocked and their possessions and families turned into the street. Many drifted from town to town looking for non-existent jobs. Many more lived at the edges of cities in makeshift shantytowns their residents derisively called Hoovervilles. People foraged in dumps and garbage cans for food.
The presidential campaign of 1932 was run against the backdrop of the Depression. Franklin Delano Roosevelt won the Democratic nomination and campaigned on a platform of attention to “the forgotten man at the bottom of the economic pyramid.” Hoover continued to insist it was not the government’s job to address the growing social crisis. Roosevelt won in a landslide. He took office on March 4, 1933, with the declaration that “the only thing we have to fear is fear itself.”
Roosevelt faced a banking crisis and unemployment that had reached 24.9 percent. Thirteen to 15 million workers had no jobs. Banks regained their equilibrium after Roosevelt persuaded Congress to declare a nationwide bank holiday. He offered and Congress passed a series of emergency measures that came to characterize his promise of a “new deal for the American people.” The legislative tally of the new administration’s first hundred days reformed banking and the stock market; insured private bank deposits; protected home mortgages; sought to stabilize industrial and agricultural production; created a program to build large public works and another to build hydroelectric dams to bring power to the rural South; brought federal relief to millions, and sent thousands of young men into the national parks and forests to plant trees and control erosion.
The parks and forests program, called the Civilian Conservation Corps, was the first so-called work relief program that provided federally funded jobs. Roosevelt later created a large-scale temporary jobs program during the winter of 1933–34. The Civil Works Administration employed more than four million men and women at jobs from building and repairing roads and bridges, parks, playgrounds and public buildings to creating art. Unemployment, however, persisted at high levels. That led the administration to create a permanent jobs program, the Works Progress Administration. The W.P.A. began in 1935 and would last until 1943, employing 8.5 million people and spending $11 billion as it transformed the national infrastructure, made clothing for the poor, and created landmark programs in art, music, theater and writing. To accommodate unions that were growing stronger at the time, the W.P.A. at first paid building trades workers “prevailing wages” but shortened their hours so as not to compete with private employers.
Roosevelt’s efforts to assert government control over the economy were frustrated by Supreme Court rulings that overturned key pieces of legislation. In response, Roosevelt made the misstep of trying to “pack” the Supreme Court with additional justices. Congress rejected this 1937 proposal and turned against further New Deal measures, but not before the Social Security Act creating old-age pensions went into effect.
Brightening economic prospects were dashed in 1937 by a deep recession that lasted from that fall through most of 1938. The new downturn rolled back gains in industrial production and employment, prolonged the Depression and caused Roosevelt to increase the work relief rolls of the W.P.A. to their highest level ever.
Hitler’s invasion of Poland in September 1939, following Japan’s invasion of China two years earlier and the continuing war there, turned national attention to defense. Roosevelt, who had been re-elected in 1936, sought to rebuild a military infrastructure that had fallen into disrepair after World War I. This became a new focus of the W.P.A. as private employment still lagged pre-Depression levels. But as the war in Europe intensified with France surrendering to Germany and England fighting on, ramped up defense manufacturing began to produce private sector jobs and reduce the persistent unemployment that was the main face of the Depression. Jobless workers were absorbed as trainees for defense jobs and then by the draft that went into effect in 1940, when Roosevelt was elected to a third term. The Japanese attack on Pearl Harbor in December 1941 that started World War II sent America’s factories into full production and absorbed all available workers.
Despite the New Deal’s many measures and their alleviation of the worst effects of the Great Depression, it was the humming factories that supplied the American war effort that finally brought the Depression to a close. And it was not until 1954 that the stock market regained its pre-Depression levels.

Bottom creation continues by the big indices.

Swed30, FTSE, Dow, SP500 and Dax are still trying to build a bottom for an upside move. Negative news can still send them down however. Swed and FTSE looks best and could move up any day in the beginning of week August 15. Since all these indices use to move together I think a rally will start Monday - Wednesday. How far this eventual rally will go I will tell after take off.

If a move should come on downside but hold above recent lows that could be a good buying opportunity.

The total drop during August so far has been of the same length as the January 2008. Then the coming four months the trend went sideways and up. In the beginning of the fourth month the real bear market started with the best long term sell short opportunity.

Remember that the current bear market is here because the world economies are slowing down by the week. Instead of stimulance many governments have cut spending and employment on austerity plans. This happened last time during the 1930's and it took many years to get the economies going again. I see no possibilities to change the forcast for the current trend.


CET 17.00: Bottom building continues, and fall of CAC,IBEX and MIB reversed

From a technical point the hourly trippel bottom built by SP500 seems encouraging for a start of a correction on upside soon. It is now 30 minutes before Europe closes. SWED30 have a daily double bottom broken on upside. Seems to me right now as a good time to cover some short positions and add a few long positions if you can follow them live. This is a personal reaction to my charts right now and there is no guarantee for the outcome.

Gold and CHF again looks like beeing in for a correction. For the good traders I would suggest consentrating on CHF which seems right now to close above its falling 8 days MA for the first time. With lot of patience and many hours of waiting I think USDCHF will be a real killing when all the longterm shorts will be covered. 

CAC, IBEX, MIB new lows today. All getting closer to the target which is the 2009 lows.

SP500,Dow,FTSE,DAX and OMX have all reached their targets . Now at 3 CET before the U.S. opens they have built a four day bottom but are very close to take a new low if the U.S. traders send their markets down tonight.

CAC, IBEX and MIB have all taken new lows and could reach the crucial target point which is the lows of 2009. A break here on downside is a verry very bearish sign.

If the first group can further build on the bottom a strong correction upwards could occur within days.

Tonight and Friday's trading will be crucial for the next move in all indicies.


The worlds biggest economy has nearly stopped growing.

The United States of America has nearly stopped growing according to the last two months indicators. According to my take on the ISM numbers, my blog August 1, this economy is already in a recession and there are no signs of changing this for a long time. More over the S&P, which downgraded the economy to AA+, said in an interview on CNBC that the reason for downgrading is that congress refuses to do anything about the long term expansion of the country's debt. That debt is now above staggering 14 trillion dollar and it will increase every year and reach the double amount 2021.

Against these facts the recession will get worse by the week and all the good news for the future have nearly evaporated. The stock markets have been taken over by the very big players who still have cash left to play the markets. The you and me investors are decreasing in numbers and we refuse to buy. When America sneezes the rest of the world will get pneumonia. This is still the truth but for how long. I think after about ten years of recession it may end but not yet.

I cannot see any way the stock markets will pick up for a very long time. Of course the market will have waves as usual but the long term trend is down as the technical indicators suggest. My advice is still stay in cash and do not buy anything yet. If I am wrong and a new long term trend on upside is in the cards you will read it here first.

Targets met on all indices and rally is underway.

Most indices took a new low and  then rallied on upside to close just below yesterdays highs. The upturns most likely closed a lot of short positions which had to be covered. It is difficult to predict the short term trend but the bear markets are all still in place.


SP500 closed 18 points below target and the Dow is now only 80 points above.

U.S SP500 fell 6,6 % and the Dow 5,5 %. SP is now 18 points below my target which is counted from the head and shoulder formation. So is the Dow which is just 80 points below. This formation has now played its role and it arrived to the targets in five long waves as anticipated.

FTSE has also reached the target today or 4.898 just 13 point shy. Swed30 is 29 points above target which is 880.

After the targets have been met a correction on upside use to happen, but not always. Information will follow in next blog.

Gold and CHF rose higher than 61.8 % of the key reversal bar which ment that it likely would take a new high which also happened. The new all time high for gold came today at 1.717 on u.s. close.


The world is in a state of shock and disbelief according to the Pakistan Observer.

The world is in a state of shock and disbelief. During the last week, world stock markets have lost more than $4.4 trillion as speculation mounts that the global economy faces a new recession that would deepen US And Europe’s woes.

Greece, Italy and Spain are facing acute debt problem that prompted the European Commission to call for an expansion of the European Financial Stability Facility the 440 billion euro rescue fund. However, Germany, a major economic power in European Union, rejected the expansion of the EFSF. Differences persist among the Europeans on Marshal Plan for Greece.

The United Stated averted a disastrous default by raising the ceiling of debt currently estimated at $14.3 trillion. American capacity to borrow at rock bottom rates is being damaged by perception that its political class is incompetent. It is clear that the President Barak Obama fiscal stimulus has failed to kick start self-sustaining growth and job creation. The powerful US military refuses to cut military budget despite the worst ever financial crisis.

The United States, United Kingdom and Japan are printing money to stimulate the economy. However, the Europeans refuse to follow this policy. In short, the world is witnessing a “currency war.”

A very grim situation is hitting hard the American economy. First, the EFSF deal to soften the bailout terms for Greece, Portugal and Ireland and commit Europe to future fiscal union has only postponed the debt crisis. Second, the US economy is stalling and far away from recovery. Third, the slowing growth in Asia is getting worse than anticipated.

In Australia, the stock exchange rout has wiped $60 billion from the Australian market in one day and fuelled fears of a second global financial crisis.

International crude oil prices fell by $ 5 per barrel against the backdrop of the looming economic crisis and down grade of the US credit rating. It is expected that the oil prices would further decline. OPEC might even evaporate.

The financial turmoil essentially means the failure of the capitalist system. It is a testimony on the breakdown of the economic policies of the US administration. In fact, the Democrats under Obama are responsible for the crisis. This would translate in massive defeat of the Democrats in 2012 elections.

The above highlights are only the beginning of a long and painful global economic depression, which started in 2008. And despite a short respite over the last two years, the depression has never left. It was only delayed by massive amounts of government intervention that went at variance with the very basics of the free market economy.

The intervention only postponed the crisis for a while. Now, the depression is reasserting itself afresh. This depression is very serious, given the huge financial crisis. It will fundamentally reorder the economic, political and social landscape. When it ends, most of the global institutions and markets would be a story of the past. -- Observer Pakistan Aug.7, 2011.

The Trend
The stockmarkets, all of them, ended the week as bear markets that could last a long time. I still believe in the targets I have set out in this third wave down. A correction, short or long always come so do not believe in a sudden bottom. Remember that the big players now are short and the even bigger players at some point will trigger a rally that could be fast and high. Do not buy any shares only sell the ones you still own. Traders should follow the rally carefully and go short on the top. I hope to guide you through the rest of this bear market.
Gold and CHF are currently bullish but a few signs point to a reversal or correction. This will be followed up in this blog as well.


the U.S. stock indices and the Germany Dax are now technically in a bear market

The three last indices is now in a bear markets but not definitely. The 8 months MA have turned down but could still change if August close comes in higher than today's daily close. The head and shoulder formation mentioned in my last blog looks more likely now and the target for SP500 is set to 1.138 and for the Dow to 10.740. The other bear markets target are the same.

Gold today got a so called key reversal which means that there is a possibility for a trend change. If tomorrows daily bar does not get over 61,8 % of today's bar the trend change get even more likely. The big short traders use to short the trend the day after a key reversal with a stop at the keys top.

Swiss franc CHF use to follow gold and the daily downtrend could change quickly if gold drops. Both gold and the CHF has broken out of the long parallel channels which use to be a sign for a trend change.


FTSE now in definitiv bear market. Gold new all time high at 1671. European bankindex falls steeply.

DAX, Dow and SP500 not yet in technical bear markets. However SP500 seems to have created a head & shoulder formation with broken neckline indicating a first target at 1.150 now trading 1.252. The H&D formation could be discussed so this is not written in stone. If it is a H&S Dow's first target could be 11.000 now trading 11.900.

The bear markets target could be: FTSE 4.885 now at 5.660, SWED 880 now at 1.005, MIB and IBEX targets seems to be 2009 lows at12.317 and 6.649.

The numbers here are not exact and could be changed. The markets have fallen without any correction for several days and are very oversold. A correction on upside could go very high because short positions will be covered. At the same time it will be an excellent opportunity to short our bear markets. Dax, Dow and SP500 which have not been locked in as bear markets could see an upside correction go very high and I advice caution with these indices for now.

Fundamentally the sharp drop in bank indices indicated well in advance the coming bear markets in 2007. The accelerated downtrend that now takes place in Europe is also a warning for eventual coming bank runs. Also remember that the governments have less money now to keep the banks afloat. If the banks will stay afloat you only have to put your money back into your account.


ISM report in U.S. worst i two years makes indices fall steeply.

The stock indices in Europe and the U.S. started on upside on positive news about solving the debt ceiling crisis but markets fell sharply to new lows on U.S. ISM report. Very positive news on the debt ceiling from both parties and the President made the Dow and SP500 close even.

It is expected that the debt ceiling bill will pass congress tonight and immediately be sent to the President.
During Tuesday the markets will likely have priced in this long awaited law. However there will be very troublesome days ahead with eventual downgrading of U.S. debt.

The more interesting thing for the long term stock markets trend was the ISM reading that came in far below expectations. The manufacturing index which is a leading indicator by three to five months was the worst since 2009. This index is built on questions to managers who knows how much the industries want to supply their manufacturing. In the reports from the industries for the second quarter, firms might not have noticed the slippage since it will show up later in the year.

More worrisome is that Brazil, China, Russia, the UK, Spain and Greece have the same problem which means the economies are slowing down much faster than expected.

The Swedish index SWED30.I which is in a bear market broke very important support level and closed down to august 2010 level. Why this index is so important to watch is because it was the first to break on downside 2007, first to hit a bottom in 2008 and the first index to become a bull market in 2009.

The bear markets are still in tact that is SWED30, CAC40, MIB and IBEX. We are now waiting for FTSE, Dax, which use to be the last, and the Dow and SP500.