I just finished a short video in which I discovered an eerily similar pattern in the NASDAQ. If the pattern repeats then it certainly is going to be a rough third and fourth-quarter for most investors.

In this short three minute video I give you exact points and the formation that I’ve seen that could make a huge difference to most people’s portfolios.

Please feel free to comment with your thoughts on this market.

As always our videos are free to watch and there are no registration requirements needed.

http://www.ino.com/info/613/CD3784/&dp=0&l=0&campaignid=3

All the best,
Adam Hewison
President of INO.com
Co-founder of MarketClub

~Know your risks.  Please see our Legal Disclaimer page.

The jobs number was not even good based on the manipulated numbers presented.  People who live in the real world probably understand this, but there are a few additional things about the jobs number that need to be considered.  Unfortunately, these things make the employment situation even a little more grim.  Here are the numbers that were released Friday (from Bloomberg).

Actual came in much lower than the consensus estimate which took stocks lower on Friday, early.  But with paltry volume a rally ensued into the close making the day seem not so bad.  Monday, opened higher and and stayed pretty flat on abysmal volume.  Now on Tuesday (today) we are a 1% down (volume yet you ask?  ummm, nope) and awaiting the Fed.  Volume will probably increase around the anouncement, but is unlikely to be sustained.  This again indicates that trades need to be taken very selectively.

Back to the jobs.  The following is from Dave Rosenberg and Breakfast with Rosie whichlooks at some additional factors that need to be considered when looking at employment data.

* Forget about private payrolls, which for some reason the markets have been brainwashed into watching (though these did come in well below market expectations, at +71k versus +90k expected) — we should be adding in state/local government employment. Bottom line is that when adjusting for the Census worker effect, the economy only generated 12k net new jobs last month. Pathetic.
* The Birth-Death adjustment factor tacked in 16k jobs to the seasonally adjusted data, so actually, that 12k number was probably more like -4k. Doubly pathetic.
* The Household survey showed a 159k loss, which was the third decline in a row — something that in the past occurred outside of recessions a mere 2% of the time. Full-time employment tanked 570k (on top of a 70k falloff in June) which was the steepest decline since the depths of economic and market despair in March 2009.
* The Household Survey, on a population and payroll concept adjusted basis, posted a decline of 315k and this followed a 363k loss the month before.
* If not for the near one million decline in the labour force since April — the number of discouraged workers has ballooned 50% in the past year — the unemployment rate would be sitting at 10.4% right now (if the participation rate was unchanged from April’s level).
* As a sign of how far the economy has slowed from its springtime peak, the employment/population ratio dipped from 58.8% in April to 58.7% in May, to 58.5% in June, to 58.4% in July — the lowest it has been since the turn of the year. Moreover, two-thirds of the private sector job creation this year took place in March and April, when the economy was hitting its peak.
* We had mentioned that one of the bright spots in the data was the pickup on factory payrolls, but again this was more the result of seasonal adjustment wizardry than anything else. Somehow, a 16k drop in the automotive industry in the raw data managed to swing to a +21k print on a seasonally adjusted basis and this likely reflected the one-off lack of plant idling this year at GM.
* The workweek did edge up, but it is still an anaemic 34.2 hours and this reflects the ability of businesses to adapt their labour force needs more than anything else. The fact that they chose this route rather than add bodies, and shedding full-time workers, is a sign that companies lack a commitment right now. The fact that they cut their reliance on the temp agency market for the first time in 10 months is another indication that the aggregate demand for labour contracted last month.
* At the rate the economy is creating jobs — 654,000 so far this year — we will not get back to the previous peak in employment until 2017. Just to get back to the 8% unemployment rate that the White House had forecasted we would require job creation of at least 2.5 million. At the rate we are going, that will take longer than two years to accomplish.
* Let’s not lose sight of the fact that initial jobless claims kicked off the month of August by jumping 19k, to 479k, the highest level since last August. If we see this number back up to over 500k, then for sure we will see less denial over double-dip risks.

Source: Gluskin Sheff

Cheers,

Cory Mitchell, CMT

Here is another very interesting read:

Big Bear Markets: More Than Falling Stock Prices
Many infamous authoritarian regimes emerged during or after big bear markets
By Elliott Wave International

Fear and uncertainty that drive a severe bear market are the same emotions which can set the stage for authoritarianism, in most any nation. Why do authoritarian tendencies emerge only during bear markets in stocks?

Bob Prechter’s new science of socionomics gives you answers. Read more.

Today we are going to be examining the NASDAQ Index. This market, which made its peak in 2000 at the height of the dot com bubble, remains in a secular bear market.

http://www.ino.com/info/437/CD3784/&dp=0&l=0&campaignid=3

After making a low in March of 2001, this market has had multiyear recovery which has rallied it very close to a 50% Fibonacci retracement level. After a nearly 50% recovery, this market now appears to be faltering.

The months of September and October are now with us and both of these months tend to be treacherous for the equity markets. We would not be surprised to see more of a two-way trading market before it eventually falls on its own weight and resumes a downward path. This is what we expect to happen, however, we are going to rely on our Trade Triangle technology to give us the perfect timing for that event.

In today’s video I will show you graphically what I expect to happen to the NASDAQ Index.

http://www.ino.com/info/437/CD3784/&dp=0&l=0&campaignid=3

All the best,

Adam Hewison
President, INO.com
Co-Creator, MarketClub

Here is an analysis video of the S&P 500 which looks at just how high this market can go.  Using Trade Triangles as well as chart patterns we can begin to zero in on what this market is likely to do.

If you wait right till the end of the video you can choose to try out this Trade Triangle Technology FREE for 30 days.  Although, there is no obligation to do so.  Enjoy the video, and all the best in your trading.

Title: How high will the S&P go?
http://www.ino.com/info/413/CD3784/&dp=0&l=0&campaignid=3

Cheers,

~Cory Mitchell, CMT
Chief Market Strategist

I don’t write about the stock market too much on this site anymore, unless  something big is about to happen.  And right now it is.  You can follow my updates on this unfolding market at http://www.darkpooltraders.com/vb/stock-tips/104-stock-market-breaks-trend-line-support.html (Great site by the way!  You can talk with me or other traders, post questions, have discussions in the chat rooms or in the forums.  Check it out!)

But I will give you the basic snapshot here:

We are resting right on the “savage support line.”  Why the “savage support line?”  Well, if there is a legitimate break of this level the fall likely take us down about 10% from current levels.  You can see the target area on the chart below.  How the market reacts off that target area will determine whether we bounce, in which case we have an amazing opportunity to buy into one of the lowest risk areas of a bull trend, or we realize the governments screwed the pouch and we are retesting March lows. But that is a bit down the road.

The pivotal level right now though is 880 on the s&p 500.  A break below will sends us towards our target.  This market is in a trading range so the breakout may not happen tomorrow, but it may.  This is a big level and we closed right on it, so I owed it to you to least make you aware of it.

S&P 500 Daily - Free Stock Charts

Cory Mitchell, CMT
Chief Market Strategist
Remember, failed breakouts are tradeable too!

Trade the most active foreign currency markets with a mechanical and proven trading strategy. Free two-week trial.
NetPicks E-Mini Futures and Forex Trading System

Day trade the S&P 500, Nasdaq QQQ, and S&P and Nasdaq E-Mini contracts and cash out at days’ end. All trades managed from entry to exit via live trading room. Two-week introductory special.

The following is a newsletter article from Larry Levin of www.secretsoftraders.com and it touches on the ice berg of a major issue.  Some of this is opinion, although opinion from a successful trader who understands the markets.  That said, always read between the lines as numbers can be made to look pretty much any way the person making the argument wants them to look.  Yet the numbers themselves are there pointing to where we are, and they can’t be ignored.

Good article, and I agree with it.  So here is the piece from Larry Levin’s Nightly Newsletter

Bond Market to Feds: Drop Dead!

Today’s bond market action reminded me of the famous 1975 Daily News headline, “Feds to New York: Drop Dead.” At the time the federal government decided to reject a request for a NY city bailout, which prompted the headline.

However, times are different today: nobody is allowed to fail. Chrysler was allowed to keep its $11.4 billion “bailout” (that’s right US taxpayer – you were robbed!) and GM is said to be on the docket to receive ANOTHER $50 billion bringing its total to $69,400,000,000.00. Do you think GM will repay this money? Do you think AIG will repay? What about Shitigroup and Bank of America?

By the way, as of yesterday GM was worth about $800 million. Uh-huh, we’re giving GM $69.4 BILLION when its current net worth is almost 87 times less! What the hell kind of math is used to justify such nonsense? Oops, my bad – that’s Washington DC math.

Well, when you throw in the assured future handouts to insurance companies, commercial real estate firms, government run healthcare, State handouts, “free” college educations, etc the bond market is saying – no thanks. All of these so-called freebies are “budgeted” at today’s interest rates.

Like the fools that they are in government, they extrapolate funding this madness to infinity with ultra-low interest rates but forget that the bond market does not have to play along. The bond market is bigger than the President. The bond market is bigger than Tax-Cheatin-Timmy at Treasury. And although Helicopter-Ben doesn’t know it, the bond market is bigger than even the Federal Reserve.

Today the bond market may have said to all the aforementioned: DROP DEAD!

With today’s price collapse in the 10-yr Notes and 30-yr Bonds and commensurate yield spike, spreads widened. The 2yr/10yr spread is now at the widest spread ever. The 2yr/30yr spread is now just three basis points shy of its all time 1992 record. The 30-YR fixed mortgage rate on the eRATE real time mortgage quoter spiked a huge 28.2%! Yesterday it was quoted at 5.08% and today was quoted at 6.52%! Surely this was a knee-jerk reaction and will fall somewhat, but it should be a wake-up call.

So what happened? Today’s 5-YR Note auction went well – better than expected – and the bond market still crashed. Uh-O, good news and the market still drops thus increasing interest rates? That’s bad and why I say the bond market is getting tired of the bailouts. Remember, GM is only days away from filing BK and therefore another MASSIVE cash infusion.

Tomorrow brings us a 7-YR auction and thus perhaps more fireworks – or not. You see, it is the 7-YR that many believe is the cutoff between where the foreign central banks will slow or stop buying Treasury’s IOUs. The US is beholden to the kindness of foreign banks of China, Saudi Arabia and others. At the moment they seem willing to buy short term IOUs, but not the longer term junk, which is driving up interest rates.

Question: If long term rates continue to rise while Helo-Ben is powerless to stop them, how much of a so-called recovery do you thing there will be?

The government must STOP THE BAILIOUT MANIA NOW!!!

Ever since the Helicopter-Ben fueled up his money-helo, long term interest rates have been going up – slowly. That was not supposed to happen. Ben thought he could wave a magic wand and make everyone do his bidding. He was wrong. However, the bond market is massive and cannot be turned around like a Ski-Nautique boat; it’s more like an aircraft carrier. Therefore, I believe we have time to avoid the worst possible outcome: Jimmy Carter era interest rates. Call Congress and demand an end to the madness.

We should consider today’s action a shot across the bow. If the Treasury and White House do not cure their bailout psychosis, the USA will become the ultimate subprime borrower. “Change you can believe in.”

Sadly, I believe the current changes in the bond market have to do with; systemic structural weakness in the US financial system, the gross amount of government debt, and obscene fiscal irresponsibility. The lofty yield curve is a vote by the trading community that the US economy is a massive systemic risk, with a real possibility of core failure.

April 27 8:00 GMT

Since gold is at an interesting spot I have decided to post a trade idea for it, as even traders only with forex accounts can access gold trading through a CFD.

The following is a commodity market commentary based on technical analysis for the Gold.  It is based off of a daily chart. Trading ideas or trading signals can be generated based on your own risk tolerance and time frame. Please read the latest How to Use the Trade Ideas blog if you have questions.  If you still have questions after, feel free to comment.  This is trade is likely to be a week or longer in duration.

Gold is currently hitting resistance on a downward sloping trend line.  A break above this line (currently $920, remember this line is downward sloping over time) would indicate a profit target of $980 and if that is exceeded, $1020.

If the resistance level holds, look for a retreat to the downward sloping support line in the $840-$850 range.

Gold is currently trading at $914.18

~Cory Mitchell, CMT
Market Strategist

Remember, failed breakouts are tradeable too!
—————————
Are you interested in getting into trading? Or if you are already trading and dissatisfied with your broker, check out mine at Forexyard. Switch to Forexyard, open a Standard account and receive up to a $1,000 bonus.

Open a SuperMini or Standard account now and receive a 100% cashback worth up to $300.
Open a Standard account and trade commodities, receive 10% cashback worth up to $1,000.

April 24 9:52 GMT

Dollar’s Strength Set to Determine Oil Prices Today

Whilst the Dollar declined in yesterday’s trading against most of its major currency pairs, Oil prices recorded considerable gains. Thus lately, there has been an inverse relationship between the greenback and the black gold. Therefore it is important to follow economic news releases from the U.S. closely today, as a weak U.S. economy is likely to lead to bearish Oil prices. On the other hand, strong U.S. economic data and a strong Dollar are likely to lead to higher Oil prices later today.

~This is an excerpt form the Forexyard Daily Forex Analysis newsletter.

Interested in trading with Forexyard?

Open a SuperMini or Standard account now and receive a 100% cashback worth up to $300.
Open a Standard account and trade commodities, receive 10% cashback worth up to $1,000.

April 24 5:00 GMT

The following is a forex market commentary based on technical analysis for the GBP/USD currency pair. It is based off of a 15 minute chart. Trading ideas or trading signals can be generated based on your own risk tolerance and time frame.

The GBP/USD has formed a triangle.  This triangle offers us two potential profit targets.  One for the larger triangle, and one for the smaller triangle which I have intersected with a vertical line on the chart.

Currently the pair is trading at 1.4650.  A break below 1.4635 would signal a downward break from the pattern, offering  targets of 1.4565 and 1.4525.

If the pair moves higher, currently a break above1.4665 (remember, the line sloped down over time), would offer targets of 1.4735 and 1.4775.

These are my favorite patterns as near the apex of the triangle risk is relatively small compared to the reward offered by the pattern.  Even with a false breakout and a loss, we can generally make that loss back, plus a profit, when the eventual legitimate breakout occurs – if we control our risk.

~Cory Mitchell, CMT
Market Strategist

Remember, failed breakouts are tradeable too!
—————————

Are you interested in getting into trading? Or if you are already trading and dissatisfied with your broker, check out mine at Forexyard. Switch to Forexyard, open a Standard account and receive up to a $1,000 bonus.

Open a SuperMini or Standard account now and receive a 100% cashback worth up to $300.
Open a Standard account and trade commodities, receive 10% cashback worth up to $1,000.

I am here to personally help you out if you open an account, and need help with strategies or figuring out the trading platform.

Please read the latest How to Use the Day Trading Blog before using these signals. The signals are for the start of the European session. If market does not move to the trigger price by about 9:30 AM GMT, then do not take trades.

Read the comments to this post as they are posted. The comments provide updates to the trades and will provide final results of the trade based on those updates.

Take multiple lots so you can exit at different prices. These should be “separate positions” with the same entry and stop, but with different profit targets. The amount of the stop in pips multiplied by the amount you take should not be more than 3% (less is even better) of your total trading account. If it is more, take less lots. For the summary pip profit calculation (in the comments after the trade completes, each position will be assumed to be 1 lot. If you take more than 1 lot, you pip profit/loss will be multiplied by how many lots you take for each position (likely you will 2 or 3 positions depending on the number of profit targets given).

BUY at 1.4965. Stop=1.4929. Profit target=1.5000, 1.5045. If not stop out on final position exit trade at 10:00 AM GMT. Bring stop to breakeven once 25+ pips onside.

~Cory Mitchell
Market Strategist
—————————

Are you interested in getting into trading? Or if you are already trading and dissatisfied with your broker, check out mine at Forexyard. Switch to Forexyard, open a Standard account and receive up to a $1,000 bonus.

Open a SuperMini or Standard account now and receive a 100% cashback worth up to $300.
Open a Standard account and trade commodities, receive 10% cashback worth up to $1,000.

I am here to personally help you out if you open an account, and need help with strategies or figuring out the trading platform.