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Tuesday, October 14, 2014

Short Term Rally Before Resumption of Decline

Oct 14, 2014  Premarket


The market has gone down sharply as predicted in early September. Russell 2000 appears to be consolidating here after nearly 13 % decline from peak established in early March.  The decline was less than those in other indices in the last two days.

The decline in the last   6  trading sessions has been severe  and we may have a short rally starting today. There is no buy signal yet and after this rally the decline will resume.

DJI  The 200 day moving average could not stop the severe decline.
SPY
QQQ
TQQQ
SQQQ
IWM
TNA
TZA
GLD   Gold has been going up after hitting a low  around $1185 on Oct 4. This is not the start of a big rally  yet. New lows below $1180 will occur after this rally is over. No sign yet.
GDX  Gold Miners ETF  Ready to give buy signal
NUGT   Ready for a rally
DUST   Ready for a decline

TLT Interest rate ETF . See the chart   below  for last  2 Years. We have a Motif  for it at Motifinvesting.com   " Long Term Bonds -- Bullish or Bearish" We have had a gain of 16% in the last One month. Say good by to PIMCO. Their bonds have been going down. High yield bond ETF JUNK has been going down also. Soon it will accelerate on the down side, whereas our Motif will continue to go up whether the interest rates go up or down. So beware of your bond portfolio. It  will start going down as the interest rates are headed higher.

The interest rates hit a low in  Middle of 2012. After that they rose till  beginning of 2014 in Step (1) Up.( Bonds went down)
They  have been  declining  in step (2). That means bonds have been rising. 95% of the people are now bullish on bonds . This rally will be over soon and bonds will start declining  again in Step (3) down.
Interest rates will rise irrespective  of what the Fed does. Housing stocks will start going down . This is the last chance for you to refinance your home or business loans.
TLT last 3 Months


TMF   3 X bullish ETF  For bonds
TMV 3X Bearish ETF For Bonds  Soon it will start going UP
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