Mid-week suggestions for reading and charts review

First, remember that ChartsEdge's weekly forecast posted here Cycles forecasts for the week of June 8 in equities and gold, from ChartsEdge had a substantial rise for the week and it looked marked to peak Tuesday afternoon. We'll have to see if the movement in futures this morning still factors within that, and if that cycles forecast continues to "work" as we move later into the week. (and use the "Chartsedge weekly" label in the labels list at right, at any time, to see those posts).

People are talking about the "golden cross" which is the 50-day moving average crossing over the 200-day moving average - it hasn't happened yet but of course people are hoping that it will. In this case, it would be a cross above, and is widely considered bullish (or bearish with the reverse). If you look at the chart of the yen ($XJY or FXY) you will see one example where there was a cross (under) but it didn't prevent a lot of action above, and we've yet to get confirmation whether the yen is going to continue bearishly much farther down, although it may be getting close to that. Another fact to remember with this talk of a golden cross - the 200-day moving average is still definitely in declining mode. This renders the crossover less robust. So even if it works, it doesn't have as much strength as if the 200-day moving average were more bullishly postured itself. If we do see a "golden cross" then either the market probably needs more work in order to make much of it; or there's a risk the signal may give out and need another attempt when the 200-day itself is more ready.

Doug Kass has some interesting views about the rally that take into account how fund managers are seeing it - in this article at Barron's online: The Market's Formula: A Square-Root Rally - Barrons.com (6/4/09).

Financial Ninja posted Running out of Volume (6/9/09) looking at volumes in the rally. I think they've been skeptical for a while, but that's okay, we've been noticing volumes drying up too.

Here's a blogspot I have come across, Charts and Coffee blogspot. I have started to look at it a few times and considering whether to add it to my "other sites of interest" at the right side of the page; although I haven't decided quite yet. They are covering charts of many different markets. (Of course, Tony Caldaro's public charts link at his site is a window into his charts across many markets, which is a great resource.)

**UPDATE, ADDED:

TraderFeed: Do Individual Day Traders Make Money?. If you are an individual trader, you really MUST be aware of these issues and I would say it is mandatory that you follow Brett Steenbarger's work, he knows how to help you make money and avoid losses. Especially in this environment, where more people are taking severance packages and putting them on the line with trading, many for the first time. It IS EASY TO LOSE money and you have got to learn the emotional and psychological tricks, and the trading discipline and habits that will give you back your edge.

Bloomberg: For Goldman Sachs, Barclays, Lehman Memories Ease: Chart of Day - Bloomberg.com (6/2/09). Yes it was last week but still interesting if you didn't already see it.