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Technical Scoop - Weekend Update Nov 5

 -- Published: Sunday, 5 November 2017 | Print  | Disqus 


Charts and commentary by David Chapman

Phone: 416-523-5454 Email:

Twitter: @Davcha12

November 6, 2017

Weekly Update

To the moon, Alice!

        Ralph Kramden, The Honeymooners


And at the current rate it might not be too long before it’s actually there. The moon, that is. No, not Alice—Bitcoin. Yes, Bitcoin crossed $7,000 this week. It was less than a month ago Bitcoin passed $5,000. The riches are dazzling as Bitcoin is up 640% this year alone. Bitcoin now has a market cap of $100 billion. How much longer before it’s bigger than Amazon or Apple or worth more than the entire gold stock market?  But the question continues to beg—is Bitcoin an historic bubble? Until it bursts, the question is strictly academic. And don’t forget, not only is there Bitcoin but there are now over 1,000 other cryptocurrencies. And Bitcoin has forks as well called Bitcoin cash and Bitcoin gold.

Okay, we are not going to get into a huge discussion of Bitcoin and how it is structured and what blockchains are all about. It is mind boggling enough trying to figure all of that out. We will have further comments on our weekly “Bitcoin Watch!” commentary.

The stock markets made new all-time highs again this past week. That comes against the backdrop of the terrorist attack in New York City, indictments in the Russia investigation including former top aides of President Donald Trump, and possible brewing trouble in the Mid-East. There is also the escalating crisis in Catalonia in the heart of the EU, ongoing trouble between Kurds and Iraq/Iran/Turkey, and continued moves afoot to lessen the use of the US$ in world trade. As well, a new Fed chairman has been proposed. But all the stock market cares about is the potential to pass the tax bill that could put billions into corporations and the 1% even as it could create deficits estimated at up $1.5 trillion over the next decade.  

Maybe the stock markets are also headed for the moon, albeit at a much slower pace. Still, the records just keep on falling and there seems to be little in the way of stopping it. We may wring our hands over the alleged terrorist attack that killed 8 and injured many more but largely ignore an attack in a Walmart in Colorado that left 3 dead that occurred not long after the NYC attack. And I might add as we prepare this for distribution another attack in some small Texas town in a church that has left multiple fatalities.

One can only suppose that it would take an attack on the scale of 9/11 to catch the market’s attention. In the Mid-East, another Israeli aerial bombing inside Syria drew a retaliation of missile fire from Syria and followed with the threat of more. The incident was largely ignored (except by Israel), but if actual war broke out between Syria and Israel that would catch the attention of the markets given that both are backed by the US and Russia respectively and with the presence of both US and Russia military in Syria. As if the US doesn’t have its hands filled with North Korea. As at the time of writing US B1 bombers were skirting North Korea, which accuses the US of “seeking to ignite a nuclear war.” What if war actually broke out? Well, the markets would not take to it kindly.

The first indictments were laid down by special counsel Robert Mueller in the Russia investigation. They were largely as expected but there is now considerable concern in Washington as to where this is going. If it escalates further and it appears that the Trump Presidency is under investigation (it is but the first indictments gave few clues to that), that would catch the attention of the markets. The Mueller investigation is showing signs of growing especially as it delves into Trump’s tax returns. The threat of Trump firing Mueller is real. If it happened, it would be comparable to the infamous “Saturday Night Massacre” under Richard Nixon. It could well cause a panic in the markets. As well, Trump and the Republicans are working feverishly to shift the focus on to Hillary Clinton on what she may have or not done with regard to emails, uranium sales, and others.

The Catalonia crisis is a Spanish problem but it is also an EU problem. That arrests have been made and the leader of Catalonia has gone into exile in another EU country threatens to broaden this crisis against the backdrop of continued street protests in Catalonia against the Spanish government. The Euro has taken a considerable hit of late of which the Catalonia crisis is one of the reasons.

The Kurdish separation crisis has calmed for the moment but it is a dilemma as the Kurds were a key ally of the US in the fight against ISIS. Turkey is a NATO member and Iraq has also been backed by the US. Only Iran is the outlier and the US wants to back out of the nuclear deal with Iran that was signed along with Russia, China, UK, France, Germany and the EU. The US also wants to re-impose sanctions against Iran which would put the US at odds with the others including the EU. Taken to its full extent, that could also wind up rattling markets. The Kurdish crisis has put Canada in a bind where Canadian forces were providing advise-and-assist to both the Kurds and Iraq in the fight against ISIS. Canada has suspended providing military aid to both sides.

The markets may be singing the praises of the appointment of Jerome Powell to head the Fed. Powell is a long-time Fed governor, Wall Street lawyer, and investment banker and is in the vein of outgoing Fed Chair Janet Yellen. That should translate into a steady-as-she-goes Fed for monetary policy, interest rate hikes, and the economy. It is almost like re-appointing Janet Yellen herself, the first time an outgoing chair was not given a second term in decades. As one pundit noted—meet the new boss, same as the old boss.

Powell still has to be confirmed. But being a Republican himself he should face easy going from Congress and the Senate. Heck, he even spent time in the Treasury Department under Bush 1 and was a partner in the Carlyle Group, a private equity firm loaded with Bush groupies. And he is a multi-millionaire, one of the wealthiest ever to head the Fed. He couldn’t be more Yellen then Yellen herself except for the wealthy part. In fact, there is little to really attack him on except some have intimated he might be too beholden to Trump when the position requires complete independence.

At some point Powell may have to face a recession and what’s key is how he and the Fed might respond to one. After all, expansions don’t last forever. The current expansion is already eight years long, one of the longest on record. With so many asset bubbles appearing at once it has to be a question of when not if something bursts. There have been instances where two consecutive terms of a Presidency saw no recession and a stock market correction of at least 20%, the most recent ones being the Presidencies of Bill Clinton and Barrack Obama.  There is no supportive history for going three consecutive terms without a recession and a sharp stock market correction. George W. Bush faced two recessions and two stock market corrections exceeding 20%.

Powell is not one who is going to upset the apple cart in the mode of John Taylor or Kevin Warsh, two others who were being considered for the position. With the filling of the Fed Chair, the Trump administration still needs to fill three more spots on the Fed including the Vice Chair. Leaving the positions unfilled is not a wise idea according to many Fed watchers.

The Trump administration needs a winner. After the failure of repeal of Obamacare in the Senate, the Trump administration is looking for a winner with its tax reform plan. It is apparently going to be tough sledding. Democrats are adamantly against it with accusations that the tax reform plan is a gift to the rich and things like the phase-out of inheritance taxes are a gift to Trump and members of his family and cabinet, amongst others. There is also discontent amongst Republicans, especially deficit hawks where the plan is estimated to saddle the US with an additional $1.5 trillion in deficits over the next decade. The US national debt currently stands at $20.5 trillion. There is opposition elsewhere as well from US states, small business associations, and others. Passing this before year-end is iffy. The stock market loves it and rallied once again to new all-time highs.

This week also brought us the monthly nonfarm payrolls and employment numbers. We cover them below.  

It was a busy week in some respects. Central banks were busy as the Bank of England (BOE) hiked interest rates for the first time in 10 years. This came against the backdrop of the Brexit that is spinning wheels. The Fed indicated that the December rate hike may well happen. Coupled with the appointment of Jerome Powell it helped once again to boost the US$. Gold reacted positively to the Powell announcement but faded quickly as the US$ kept moving higher. We cover the US$ and gold in our commentaries that follow.

Bitcoin Watch!


The rise in Bitcoin is leaving us speechless. Bitcoin has now blown through the top of the most recent bull channel and is now off on another trajectory. The corrective action seen through June/July and again into September may actually be what we technical analysts call a running correction. The A wave would have bottomed in July and the B wave top in at the end of August followed by the C wave bottom in September. Then the market takes off again. The argument against it is usually the correction is seen as an ABC with the three waves unfolding as 3-3-5 correction. The B wave above appears as a possible 5-wave advance. The pattern above shows like a 3-5-3 pattern. Unusual, yes.  But let’s assume for the moment it is a running correction.  If we treat it that way, we have a potential target up to $7,900. The next target after that would be up to $9,700. $10,000 here we come!!!!

Bitcoin got a bid when the CME (Chicago Mercantile Exchange) announced it planned on introducing Bitcoin futures by year end. The CME cited demand from clients as a reason. But that could bring the CFTC (Commodity Futures Trading Commission) into the picture. Other regulatory agencies may also want to look at it. We understand the SEC is looking at it and here in Canada, the OSC is looking at it and the BofC is looking at it. Bitcoin may be popular with a small but growing crowd but as it expands the regulators will most likely want to control it. There have already been stories of scams and fraud. Regulators are also concerned about money laundering (FINTRAC).

Bankers are looking at Bitcoin as well. When something is going up like Bitcoin has been, bankers, investment dealers and others want to get in on the action. Trouble is there is hesitancy on their part because it is not a simple case of the bank or dealer just jumping in. These huge financial institutions have in-house compliance departments and they have to look at all aspects. Many have expressed concerns that Bitcoin is just in a huge bubble that will burst and come crashing down leaving investors in ruin. Some have called Bitcoin not dissimilar to Collateralized Debt Obligations (CDOs) that were pedalled during the financial crisis. Many collapsed leaving banks, dealers, and others with large losses. And of course the financial system had to be bailed out by the taxpayer and the central banks.

Bitcoin’s market cap is growing and is now up to $121 billion. The market cap of all cryptocurrencies is estimated to be between $180 to $200 billion. That makes cryptocurrencies as big as Goldman Sachs and Morgan Stanley together. With the chart breakout, it appears Bitcoin is going to become even larger. The question is: how does one get in on it? Speculative fever is not a very good reason to be leaping into the unknown.






Percentage Gains                                     Trends   



Stock Market Indices


Dec 31/16


Nov 3/17



Daily (Short Term)

Weekly (Intermediate)

Monthly (Long Term)









S&P 500


2,587.84 (new highs)





up (topping)

Dow Jones Industrials


23,539.19 (new highs)






up (topping)

Dow Jones Transports







up (topping)



6,766.44 (new highs)





up (topping)

S&P/TSX Composite


16,020.16 (new highs)






S&P/TSX Venture (CDNX)








Russell 2000







up (topping)

MSCI World Index


2,002.54 (new highs)














Gold Mining Stock Indices
















Gold Bugs Index (HUI)








TSX Gold Index (TGD)








Fixed Income Yields
















U.S. 10-Year Treasury yield









Cdn. 10-Year Bond yield
































US$ Index







up (weak)

Canadian $






up (weak)









up (weak)

British Pound








Japanese Yen

















Precious Metals





























down (weak)

down (weak)



















Base Metals
































































up (weak)

Natural Gas






down (weak)


Source:, David Chapman

Note: For an explanation of the trends, see the glossary at the end of this article.

New highs/lows refer to new 52-week highs/lows.


October Employment & Unemployment


It was the first Friday of the month and that means the employment numbers came out. In the US the October nonfarm payrolls were reported as 261,000. It could be termed a bit of a disappointment as the market was looking for a gain of 310,000. The big jump was expected because the September numbers were skewed by the hurricanes. The September nonfarm payrolls were originally reported as down 33,000 but revisions brought it to up 18,000. The August nonfarm payrolls were also revised upward from 169,000 to 208,000.

The official unemployment rate (U3) fell to 4.1% from 4.2%. The broader measure of unemployment (U6) that includes those working part-time who want full-time employment and those unemployed longer term but under one year was reported as 7.9%, a drop from 8.3%. The broader measure of unemployment reported by Shadow Stats that includes longer-term unemployment beyond one year fell to 21.6% from 21.9%. Officially, the number for those not in the labour force is 94.4 million, but 51.3 million are retirees. Those unemployed for more than a year are no longer counted as being a part of the labour force.

The labour force participation rate slipped to 62.7% from 63.1% the previous month.  That translates into a drop of 765,000 in the labour force so naturally the unemployment rate (U3) would fall. The Bureau of Labour Statistics (BLS) reported that the number of unemployed persons fell by 281,000. Payroll employment was up 261,000 but the Household survey reported that employment fell 484,000. As we have reported before you get these odd numbers that don’t seem to connect because of differing methods that are used in reporting. We won’t be going into them here but we do update the methodologies from time to time. It was probably no surprise that most of the nonfarm payrolls reported for October were in the food services industry. These jobs are typically part-time, low-wage with no benefits. In looking at the report overall it was once again largely meaningless.


Canada’s economy continues to hum. In October 35,300 jobs were created the 11th straight month of positive growth. The September gain was 10,000 jobs.  According to the report the jobs were mostly full-time. According to statistics, some 396,800 full-time jobs have been added in the past year. Canada had not seen gains like that since 2,000. That has helped spur an upward tick in the number of hours worked and as well wage growth also jumped 2.4% from a year ago October. The official unemployment rate ticked up to 6.3% from 6.2% largely because the labour force participation rate increased slightly to 65.7% from 65.6%. That meant that more people were looking for work, encouraged by the job growth. 


“Up, up here we go, go

Where we stop nobody knows”

-          Far East Movement, Rocketeer

Once again, US stock markets hit new all-time highs. No, not all. Soaring to new all-time highs was the Dow Jones Industrials (DJI), the S&P 500 and the NASDAQ. The S&P TSX Composite also joined the party as did the Paris CAC 40, the German DAX, and the Tokyo Nikkei Dow (TKN ). But not joining the party and actually finishing down on the week was the Dow Jones Transportations (DJT) and the Russell 2000. A divergence?  As to where it stops, well, nobody knows, although we can make some educated calculations.  

Based off the wave 4 correction that occurred between May 2015 and February 2016 the first target was 2,460. Since that level was surpassed, the next target is 2,660. With a close this week at 2,587, we are not far from that second target—about 3% away. The market has been rising steadily since a low in August at 2,417. We are now 11 weeks up from that low. The last significant monthly low was seen in November 2016 (at the time of the election) at 2,084. Finally, the February 2016 low was at 1,810. Warning signs would abound if the market were to fall back under 2,500. Next up would be a decline under 2,400 then 2,200. The steepest correction since the February 2016 low occurred during the Brexit mini-panic in June 2016. That correction was only 6%. So any correction beyond 6% would have to be taken seriously. The key 200 day MA is currently at 2,426 and a 6% correction would drop the market currently to 2,431 and the 200-day MA support. Hence, a drop under 2,400 would need to be taken more seriously that something significant was underway.


We have often noted Dow Theory in our commentaries. One of the key tenets of Dow Theory is that the averages must confirm each other. Charles Dow, who wrote a series of articles starting in 1884 in the Wall Street Journal, was initially referring to the Dow Jones Industrials (DJI) and the Dow Jones Railroads (DJR). Later the DJR morphed into the DJT. Charles Dow never actually wrote a book on his theories, but after his death a book was written by S.A. Nelson called The ABC of Stock Speculation. Charles Dow is considered the father of technical analysis.

The above chart shows the DJI (in black) and the DJT (in red). Note that the DJI is moving higher but the DJT has already started to decline. The averages are not confirming each other. Is the DJT leading? We won’t know for sure until we receive a confirmation. If the DJI were to fall below 21,800 once again with both indices falling, we would get our confirmation. Otherwise, we need to wait as the DJT could recover as it has in the past and then confirm the DJI by making new highs. The same sort of divergence also occurs at major lows.


This is an interesting long-term chart we thought worthy of showing. Showing a chart that dates from 1871 is a long period as it offers perspective. What is neat about it is it shows secular bull markets and secular bear markets quite clearly. Since a low in 1877 the market has seen five secular bulls and four secular bears. The secular bulls have gained on average 400% while the secular bears have dropped on average 68%. Note the chart shows a bull market from 1932 to 1937 followed by another bear from 1937 to 1949. That in-between bull was considered to be a bull market within the context of a secular bear market. Argumentively we could say the same thing about the bull market that lasted from 2002 to 2007. While on a nominal basis that market exceeded the 2000 high but on an inflation-adjusted basis it did not. Nor for that matter did the 1932–1937 bull. The previous four secular bulls lasted on average 18.5 years. The current bull is only up for eight years, oddly the same length of time as the 1921–1929 secular bull. Secular bears have lasted on average 14.5 years with the shortest one being the most recent 2000–2009. So, what is interesting about this chart is there is a possibility we are in a real long-term secular bull market that could have many more years to run. There will be corrections but not necessarily the wipe-out the bears keep referring to. The alternative is, given we are up now for at least the same period of time as the “Roaring Twenties” secular bull, we could then go into a long-term secular bear comparable to 1929–1949. Both arguments have validity.


The S&P TSX Composite made a new all-time high this past week at 16,105. On the day, November 1, 2017, the TSX reversed course and closed lower making it a reversal day. The Japanese candlestick pattern left on the charts is known as “dark cloud cover,” a bearish engulfing pattern. At market bottoms we get an opposite type of pattern known as a bullish engulfing pattern. It is not necessarily a major sell signal but it does indicate that we could have a pull-back here that could last anywhere from several days to a few weeks. A number of TSX sub-indices have given off similar signals over the past week or two as well. But the TSX Energy Index still looks higher and the TSX Gold and Materials Indices continue to be under accumulation.


The US Treasury market appeared to respond positively to the news that Jerome Powell would become the next Fed Chairman. Yields on the 10-year US Treasury note fell to 2.34% this past week from 2.42% the previous week. While we suppose that is good news, it has not ended the recent back-up in yields. We continue to target at least 3% for the 10-year in the coming months. One reason we believe it will happen is prices on future dates have been sliding even as the near months saw futures prices rise. That seemed to imply that the market is okay with the front end but is more bearish further out. Trouble is on the horizon elsewhere, however, as we are now hearing signs of trouble in foreign markets that have large issues of US$ denominated bonds. With the rising US$ and rising US Treasury rates they are receiving a double whammy. Could a default in faraway markets trigger further trouble in the US Treasury market? The straight answer would be yes. There is considerable support for the 10-year down to 2.25%.


With the 10-year US Treasury note yield falling this past week and the fed fund futures tightening on the expectation of another Fed hike in December the 2–10 spread finally plunged under 75, closing the week at 0.71%—down from 0.83% the previous week. This is the biggest drop in some time and it could be signal that the 2–10 spread could continue to fall. We have noted in the past, and note again, that when the 2–10 spread goes negative it has invariably resulted in a recession. The spread is worth keeping an eye on.


The high yield corporate bond market has been very popular over the past few years. Corporations have issued an unprecedented amount of bonds in the past few years, paying some of the lowest borrowing costs on record. Trouble is if this market gets into trouble liquidity could become a major issue. Market makers would just step away and the market could fall precipitously. No, it hasn’t broken down yet. The real breakdown would take place for the Pimco 0-5 year high-yield corporate bond index under 99. That is a mere $2 away. When the problems hit, the market falls fast.


The Fed left the potential for a December interest rate hike in play and the jobs numbers released Friday continued to indicate a US economy humming along. At least that is how the narrative goes. So the US$ popped on Friday although at week’s end the US$ Index was largely unchanged. It was pretty well the same for the major currencies as the Euro gained about 0.1%, the Japanese Yen fell 0.3%, the Pound Sterling was off 0.4%, and the Cdn$ gained 0.6%. Some stellar jobs numbers helped Canada on Friday, offsetting a mildly negative GDP reading.

The US$ Index in holding its own this past week continues the recent positive streak. On the month (October) the US$ Index was up 1.7%. But so far in 2017 the US$ Index remains down 7.3%. The US$ Index has retraced close to the Fibonacci 38.2% of the down move from 102.27 high in March 2017 to the 90.99 low seen in September 2017.  A move above 95.30 (high thus far is 95.06) could suggest a move to the 50% retracement level near 96.63. Note that level is just above the downtrend line from the 102.27 March 2017 high. Only a break below 94 and especially below 93 would change the bullish scenario.


There was good news and bad news about precious metals this past week. The good news was that silver was up 0.5% and platinum gained 0.8%. The bad news was gold was off small losing 0.2% and despite silver’s gain on the week it was up even more earlier but gave almost all of it back. The continued strength of the US$ is hurting the precious metals. That and the ongoing thoughts of another interest rate hike in December from the Fed. The result is, the precious metals are gaining little traction as weak seasonals persist. Gold is now being squeezed between the downtrend line from September 2017 top at $1,362 and the rising trendline from the December 2016 low at $1,124. For the past two years gold has made an important low in December and there appears to be some chance that we could see another one this year. A test of the uptrend line from the December 2016 low currently just above $1,250 could soon be seen. A break below the line is not the end the world but it could spark the final washout before another uptrend unfolds. Seasonals have been strong starting in either late November or December and often last into February/March. While sentiment has fallen sharply it is still not at levels that might suggest a low. As well, the commercial COT (see below) remains somewhat negative. A firm break out over $1,280 would be helpful but further resistance would be seen between $1,300 and $1,320. Ideally, we would like to see the uptrend line from the December 2016 low hold as it would strengthen the bullish case. However, a break below would not be the end of the world.


As we noted, silver enjoyed an up week gaining 0.5%. But at the high of $17.25 seen on November 2, 2017 silver was up almost 3%. Friday’s decline was quite disappointing, giving back almost all of the gain. One positive about silver is it has held above a small low seen on October 6, 2017 at $16.34. Gold missed by $1 taking out its October 6 low. Overall silver has held up better recently than gold. We view that as a positive as of the two metals silver needs to lead. Silver is barely hanging at support here but as long as we hold above the $16.34 low silver should regroup and move higher. A break under $16.34 would suggest another test of $16. Above $17.25, silver could make a run to the downtrend line near $18. Both gold and silver are bouncing around a lot here, seemingly without direction, and that leaves us rather neutral on the metals at this point.


Above is a gold volatility index. This is not dissimilar to the VIX volatility indicator we follow for the US stock market. Its short history since 2010 appears to show periods of high volatility vs. low volatility. For most of 2017, gold has been exhibiting low volatility. Periods of low volatility are usually always followed by periods of high volatility. Rising volatility even as gold prices move lower could be signaling the potential for a reversal in trend.


Gold stocks continue to be very frustrating. Gold stocks are cheap in relation to the price of gold, but they have been for quite some time now. The TSX Gold Index (TGD) tested the uptrend line from the December 2016 low this past week and penetrated the line even as it closed back above it. Could it break it this coming week? The straight answer is yes. The continued weakness in gold is leaning on the gold stocks and interest in them is quite low. While that is often a set-up for a low we are seeing few signs that a low is in place. Note how last December 2016 the gold stocks gapped down, then within four/five days reversed and climbed quickly. This type of action is not unusual. So, one usually has to be accumulating as prices fall. A break under 190 could quickly send the TGD lower towards the low seen in July 2017 at 184. Below that the December 2016 low is not far away at 172. Resistance is at 200 and all the way up to 207.


For the sixth consecutive week the commercial COT for gold remained roughly the same at 27%. Still there was some encouragement as long open interest rose roughly 3,000 contracts even as short open interest also rose about 3,000 contracts. The large speculators COT improved marginally to 78% from 77% but it too has remained fairly consistent over the past six weeks. All the COT is suggesting to us is that gold would appear not ready to rise just yet. We’d prefer to see the commercial up in the mid 30s or higher to suggest a low. One positive is that the silver commercial COT did improve to 30% from 28%. Long open interest rose about 2,000 contracts while short open interest fell roughly 3,000 contracts. The large speculators COT for silver slipped to 73% from 76% as they added about 5,000 contracts to short open interest. The silver COT was therefore somewhat encouraging this past week.


WTI oil prices burst higher this past week hitting the highest level seen since 2015. WTI oil broke out above the high of $55.24 which was the highest level seen in the past three years. The only caution is volume is not huge. Strong volume was seen on the down swings not the upswings. That may suggest this is merely part of a corrective move. Next, strong resistance is seen up at $60 to $63. This has encouraged the energy stocks as the TSX Energy Index (TEN) appears to have broken above double bottom pattern. Trouble is, the TEN now appears to be hitting its double bottom target of 199.50 (Friday’s high was 198.71). The TEN is also at trend line resistance. Volume on the up move has not been overly impressive. Some regrouping may be required before we move higher, but we may have reached the top with the move this past week. For WTI oil, a drop below $54 would be a short-term negative but a drop below $52.50 would most likely end the bull run. 


copyright 2017 David Chapman

David Chapman is not a registered advisory service and is not an exempt market dealer (EMD). We do not and cannot give individualised market advice. The information in this newsletter is intended only for informational and educational purposes. It should not be considered a solicitation of an offer or sale of any security. The reader assumes all risk when trading in securities and David Chapman advises consulting a licensed professional financial advisor before proceeding with any trade or idea presented in this newsletter. We share our ideas and opinions for informational and educational purposes only and expect the reader to perform due diligence before considering a position in any security. That includes consulting with your own licensed professional financial advisor



Daily – Short-term trend (For swing traders)

Weekly – Intermediate-term trend (For long-term trend followers)

Monthly – Long-term secular trend (For long-term trend followers)

Up – The trend is up.

Down – The trend is down

Neutral – Indicators are mostly neutral. A trend change might be in the offing.

Weak – The trend is still up or down but it is weakening. It is also a sign that the trend might change.

Topping – Indicators are suggesting that while the trend remains up there are considerable signs that suggest that the market is topping.

Bottoming – Indicators are suggesting that while the trend is down there are considerable signs that suggest that the market is bottoming.


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