20 2 November)tock Market *lo' + Financial *lo' + &nvestment *lo' + !

echnical Analy%%% Pa'e o# (

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Archive for November, 2012

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Like To See Risk-On Resistance Cleared

Friday, November 30th, 20 2

Ne !ideo Comin" Sat#rda$% &e'ark ( Traditional Charts !he chart belo" is one o# the reasons "e took some $ro#its near the close on Friday% &# resistance is cleared, "e are ha$$y to rede$loy the ca$ital%

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20 2 November)tock Market *lo' + Financial *lo' + &nvestment *lo' + !echnical Analy%%% Pa'e 2 o# (

From a bullish $ers$ective, the markets have been 0sticky1 near resistance, meanin' a si'ni#icant and sustainable imbalance bet"een buyers and sellers has not materiali2ed yet% !he lon'er a market 0sticks1 near resistance, the 'reater the odds it "ill eventually breakout in a bullish manner% )till, "e "ould like to see the breakout occur% Posted in !echnical Analysis

Red#ced Risk, Locked )n Some *ains

Friday, November 30th, 20 2

3e took some $ro#its in technolo'y stocks today by reducin' our stake in 444% !he short+term risk+ re"ard $ro#ile #or the markets is cloudy% 3e $re#er to lock in some 'ains "hen 444 is u$ 5"e sold "hen it "as in the black6 rather than durin' a $ullback,mini+$anic% A#ter the )unday talk sho"s, the bias concernin' the #iscal cli## may be ne'ative early ne/t "eek% 7ockin' in some 'ains is never a bad idea in ran'e+bound markets% !he )8P 900 has 'one no"here since the end o# 4 20 2% More charts and comments via !"itter 5:CiovaccoCa$ital6 ; you do not need to kno" anythin' about !"itter to vie" our commentary% Posted in <isk+<e"ard

Rall$ Off November 1+ Lo Still )ntact

3ednesday, November 2=th, 20 2

Note: The S&P 500 was down 13.5 points on Wednesday morning. It rallied in the afternoon to finish p 10.! points. Even "ith the declines on 3ednesday mornin', the bulls still have the u$$er hand% Assumin' "e did not kno" "hat symbols "ere used to 'enerate the charts belo" 5removes our bias6, "e can ask ourselves. 03ould & be interested in buyin' this as an investor 5rather than a day trader6>1 7ookin' at the #irst chart, the ans"er is 0no, "e are not interested in buyin'1% !he chart belo" has a recent bearish MAC? cross% &t also e/$erienced a bearish break o# the <)& trendline 5see 'reen line bottom6% !he ratio is also belo" the 0 5blue line6, 20 5red line6, and 200+day 5'reen line6 movin' avera'es, "hich is indicative o# bearish trends% !he ratio #aces resistance near the intersection o# thick blue trendlines%

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20 2 November)tock Market *lo' + Financial *lo' + &nvestment *lo' + !echnical Analy%%% Pa'e 3 o# (

7ookin' at chart t"o, the ans"er is 0no1% !he chart belo" recently broke t"o CC& trendlines in a bearish manner% <ate o# Chan'e 5<@C6 also dro$$ed belo" 2ero 5see bottom6%

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20 2 November)tock Market *lo' + Financial *lo' + &nvestment *lo' + !echnical Analy%%% Pa'e - o# (

7ookin' at chart three, the ans"er is a'ain 0no1% !he chart belo" is #ormin' a bearish !<&A cross and has broken a bullish B7! trendline 5see bottom6%

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20 2 November)tock Market *lo' + Financial *lo' + &nvestment *lo' + !echnical Analy%%% Pa'e 9 o# (

!he charts above are based on the $er#ormance o# bein' short the ?o" relative to bein' lon' the )8P 900% As o# the close on !uesday, and even as o# 0.00 AM E)! on 3ednesday, the charts above have not deteriorated in a manner 5yet6 that says the odds #avor bein' short over bein' lon' in the comin' "eeks% Can the shorts have the u$$er hand #or a #e" days> )ure, but until stron'er evidence sur#aces $ointin' to a resum$tion o# the recent bearish trends, "e "ill not overreact to the declines this "eek% Posted in )tocks + B%)%

,ith *reece Aid &eal )n -lace, Can 'arkets Avoid Cliff.

Monday, November 2Cth, 20 2

A#ter the close on Monday, the markets received some 'ood ne"s #rom Euro$e% &t a$$ears the e/$ected deal to once a'ain 0save Dreece1 is in $lace% From the 3ashin'ton Post. " ro#$one finan%e ministers and the International &onetary ' nd %lin%hed agreement on a new de(t target for )ree%e on &onday in a (rea*thro gh toward releasing an rgently needed tran%he of loans to the near#(an*r pt e%onomy+ offi%ials said.

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23,2 November tock 4arket $log * +inancial $log * 7nvestment $log * )echnical Analy... Page - of ,6

Partly due to expectations of a deal in Greece, markets have stabilized over the past five trading sessions. As shown below, the NA !A" held at the lower end of a weekly trend channel formed by lines A # $. %illiams &', used to monitor market momentum, has improved in a manner similar to early (une.

)he primary driver of the recent shift back toward risk*on was the fiscal cliff press conference held on +riday, November ,-. ince then, technology stocks have led the push higher. .ast week, the NA !A" /)+ 0"""1 cleared the downward sloping blue trendline on the right side of the chart below. Notice a similar break occurred near the (une 23,2 low in stocks. A popular momentum indicator, 4A5!, experienced a bullish cross last week similar to the one that occurred at the summer low 0see bottom of chart1.

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23,2 November tock 4arket $log * +inancial $log * 7nvestment $log * )echnical Analy... Page G of ,6

)he real test for the bulls will come when the almost inevitable <bad news= starts to surface related to difficult cliff negotiations. )he tone of the unday talk shows hinted that the road to compromise could be difficult at best. +rom 'euters; Republicans in the U.S. Congress on Monday called on President Barack Obama to detail long-term spending cuts to help solve the country s !iscal crisis" #hile holding !irm against the income ta$ rate increases !or the #ealthy that %emocrats seek.&he 'hite (ouse has been e)ually !irm in its position" threatening to veto any bill that does not include the ta$ rate increases opposed by Republicans. >ur weekly technical review of the markets shows a mixed bag. +rom a bullish perspective the technicals have improved noticeably. 5oncerns remain relative to possible <trend exhaustion= as measured by !e4ark counts and long*term resistance for /uropean stocks. )his week?s video contains; ,. A risk*on vs. risk*off analysis using a weekly chart of #P @33 longs vs. #P @33 shorts 0 PA8 B at 3,;2- mark1. 2. An inflation vs. deflation analysis using a daily chart of silver relative to long*term )reasuries 0 .C8).) at 3:;,:1. 9. !iscernible bullish progress on the daily chart of the #P @33 7ndex 03-;@,1. :. Possible weekly resistance for the #P @33 03D;261. @. .ong*term resistance for German stocks 0E!AF at 36;,- mark1.

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23,2 November tock 4arket $log * +inancial $log * 7nvestment $log * )echnical Analy... Page D of ,6

-. !e4ark count and indicators for /uro toxx @3 0+/H at 36;@9 mark1. G. #P @33 daily !e4ark count and indicators 0,,;:G1. After you click play, use the button in the lower*right corner of the video player to view in full-screen mode. Bit /sc to exit full*screen mode.

As shown below, the broader #P @33 7ndex has also seen improvement from a technical perspective.

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23,2 November tock 4arket $log * +inancial $log * 7nvestment $log * )echnical Analy... Page 6 of ,6

>n November ,- we postulated the markets were positioned for a rally attempt. .ast week the rally did indeed transpire. >ur approach has been to scale back into risk assets primarily via the beat*up technology sector. 7f the markets can continue to digest developments in /urope and %ashington, !.5. in a fairly positive manner, we will continue to reduce our cash position by <buying low=. Posted in tocks * I. .

Europe Key To Rallys Staying Power

unday, November 2@th, 23,2

S&P 500s C art !mpro"ing )his week?s video contains; ,. A risk*on vs. risk*off analysis using a weekly chart of #P @33 longs vs. #P @33 shorts 0 PA8 B at 3,;2- mark1. 2. An inflation vs. deflation analysis using a daily chart of silver relative to long*term )reasuries 0 .C8).) at 3:;,:1. 9. #iscerni$le $ullis progress on t e daily c art of t e S&P 500 !nde% 03-;@,1. :. Possible weekly resistance for the #P @33 03D;261. @. .ong*term resistance for German stocks 0E!AF at 36;,- mark1. -. !e4ark count and indicators for /uro toxx @3 0+/H at 36;@9 mark1.

http;88ciovaccocapital.com8wordpress8index.php823,28,,8

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23,2 November tock 4arket $log * +inancial $log * 7nvestment $log * )echnical Ana... Page ,3 of ,6

G.

#P @33 daily !e4ark count and indicators 0,,;:G1.

After you click play, use the button in the lower*right corner of the video player to view in full-screen mode. Bit /sc to exit full*screen mode.

Posted in )echnical Analysis

&ost Recent Comments 'ia Twitter

%ednesday, November 2,st, 23,2

Aou can access them here 0J5iovacco5apital1. Aou do not need to know anything about )witter to view our comments. Posted in tocks * I. .

Ris(-)n &a(ing Some Progress

4onday, November ,6th, 23,2

7t is only two days, but so far we like what we see in terms of progress in our 554 4arket 'isk 4odel. )he bullish set*ups we covered after the close on +riday were leveraged by the bulls. 4any markets have held at logical levels of support. Infortunately, most also have recently broken support overhead and not far away. )he recently broken support may now act as resistance. )he range between risk*on support and risk*on resistance is narrow.

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"01" 1ovemberSto ) (ar)et :log + .inan ial :log + 4nvestment :log + Te hni al 0na... Page 11 of 19

The real battle to determine if the next move involves higher highs or lower lows will be fought between 1390 and 1403 on the S&P 500. The se ond battle! should we get there! will be staged below 14"0 #see below$.

Toda%&s gains an elled man% dail% 'e(ar) ounts and left others inta t. *i)e the narrow range between ris)+on and ris)+off! 'e(ar) ounts and indi ators ,aint a mar)et that is tentative and onfused. That is what ha,,ens when the number one driver of assets ,ri es is not earnings or the e onom%! but entral ban)s and government bailouts. (ani,ulated mar)ets reate onfusion relative to asset ,ri es. -here would the S&P 500 be toda% if the .ed had not ,rinted mone% at brea)ne ) s,eeds/ -here would bond ,ri es and interest rates be without the .ed&s never+ending intervention/ -hat turned the mar)ets around/ 0 favorable earnings re,ort/ 1o,e. 0 better than ex,e ted u,date in the e onom%/ -rong again. -hat fli,,ed the binar% swit h from ris)+off ba ) to ris)+on was a ,ress onferen e on the fis al liff! whi h is a sad ommentar% on the state of our 2free3 mar)ets. 4t is ,ri e a tion 5ust li)e what we have seen in the last two da%s that ins,ired us to reate the 2faster3 66( ris)+on vs. ris)+off models in 71. Than)full%! the new model is ,roving to be a valuable tool. Posted in Sto )s + 8.S.

Possible Rally, But Outlook Remains Cloudy

Sunda%! 1ovember 19th! "01"

Ta)en in isolation! .rida%&s gains did little to im,rove the intermediate+term outloo) for sto )s. Set+ u,s are in ,la e for a ,ossible rall% attem,t! but a ,o, for more than a wee) or two should ,rove to be diffi ult for sto )s. 'e(ar) harts and indi ators are ,ro,rietar% tools from (ar)et Studies! **6. Video contents - November 18:

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"01" 1ovemberSto ) (ar)et :log + .inan ial :log + 4nvestment :log + Te hni al 0na... Page 1" of 19

= = = = = =

S&P 500 dail% #0"<"0 into video$ S&P 500 wee)l% #0><13$ S&P 500 monthl% #09<01$ De ark S&P 500 dail% #09<0>$ De ark S&P 500 wee)l% #14<00$ De ark S&P 500 monthl% #1?<04$

0fter %ou li ) ,la%! use the button in the lower+right orner of the video ,la%er to view in !ull-screen mode. @it As to exit full+s reen mode.

Posted in Te hni al 0nal%sis

Cli!! "alks #et

arkets $% &or Possible Bounce

.rida%! 1ovember 1>th! "01"

Bn .rida%! the 'emo rats and Ce,ubli ans made a 5oint and ivil statement to the ,ress following a brief meeting on the fis al liff. 4t signaled to the mar)ets the% are tr%ing to begin this round of tal)s in a more ,rofessional manner! whi h was not the ase in "011. Therefore! something hanged toda%Dit was a ste, in the right dire tion. 0fter the rare show of ,oliti al ivilit%! the tone of the mar)ets im,roved immediatel%. The S&P 500 rallied to lose 1> ,oints off the session low. 'ike "ec(, But Need ore "(an One Day )onder

Bn Se,tember 10! we sold our te hnolog% sta)e in E*F noting 2te h sto )s loo) tired3. Sin e then! E*F has dro,,ed 1"G. 4s it time to bu% ba ) in at lower levels/ 0fter the fis al liff ,ress briefing! we did see some im,rovement on man% fronts! but not enough to 5ustif% ma)ing an% hanges #%et$.

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"01" 1ovemberSto ) (ar)et :log + .inan ial :log + 4nvestment :log + Te hni al 0na... Page 13 of 19

-e had orders read% on .rida% to bu% the 10S'07 777 AT.! but it losed 5ust below resistan e on short+term harts. .or exam,le! resistan e on a 15+minute hart sits at >".49 with su,,ort oming in at >1.0>. 777 losed at >".30! or 0.3G below resistan e and ".0G above su,,ort. 4t ma)es sense to see if the nearb% resistan e is leared vs. ris)ing a ".0G dro, out of the gate. 'e(ar) ounts for 777 also told us to exer ise some additional ,atien e with our large ash ,osition. C(arts i*ed, But +m%roved

Sin e warning of slowing sto ) momentum on Se,tember "4! we have seen little to get us interested again in sto )s. .rida% was better. Bn the harts! let&s start with the good newsH the S&P 500 found bu%ers at a logi al level #see green arrow below$.

, Rally-"(en , 'o.er 'o./ :ased on numerous fa tors! we an envision a ountertrend rall% ba ) toward the 1399+1449 range on the S&P 500. 0 similar 0+:+6 rall% too) ,la e in (a% "01". The rall% began at ,oint 0! moved to ,oint :! and then made a lower low at ,oint 6 #see below$. (ar)ets often have s%mmetr% and a move toward ,oint : on the right is ertainl% one ,ossible s enario for the next wee) or so. Fee, in mind! ,oint 6 would re,resent a low lower than .rida%&s low of 1359. 0 good next ste, is to lear resistan e near the ,in) line below! whi h sits at 13>" on the S&P 500.

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"01" 1ovemberSto ) (ar)et :log + .inan ial :log + 4nvestment :log + Te hni al 0na... Page 14 of 19

Resistance #till Over(ead 0nother s enario is the S&P 500 holding below the downward+slo,ing trendline from the 0,ril and (a% highs #see red arrows$. Sto )s bro)e above the same trendline in 0ugust #see brea)out below$. 1ow the trendline ma% a t as resistan eH it sits near 13?0 on the S&P 500.

Not 0ust Cli!!-1uro%e #till , Problem

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"01" 1ovemberSto ) (ar)et :log + .inan ial :log + 4nvestment :log + Te hni al 0na... Page 15 of 19

The biggest obsta le to a rall% ma% be Auro,e. There is tal) of another round of 2hair uts3 for holders of Iree) debt! whi h sides with the 2ris)+off3 am,. The Ierman '0E is learl% in a downtrend and has bro)en some )e% su,,ort levels #see orange arrow$.

Jou ma% sa%! 24 don&t are about Ierman sto )s3. 0s shown below! the S&P 500 has a ver% high orrelation to the ,roblems in Auro,e. Therefore! we need to )ee, an e%e on Auro,e.

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"&1" ,o$ember+tock Market )log - (inancial )log - 4n$estment )log - 5echnical Ana... *age 1- of 13

Stage Not Set Yet For June-Like Low A multi-day bounce could occur next week, but we need to see some follow-through gains on Monday. Unfortunately, based on numerous factors, including DeMark counts: 1. ower lows remain !robable. ". #$en if a low has been made, a mo$e toward 1%%&-to-1%'&ish would be met with more obstacles. (riday was a good day on the fiscal cliff front, but )loomberg re!orted a more realistic $iew of what lies ahead: We expect a complex negotiation process that takes many months and multiple brinkmanship moments before full resolution of the cliff, a team led by Ethan S. Harris and Gusta o !eis, "e# $ork%based economists at &ank of 'merica (orp., #rote in a report published today. Gi en its fragile economic backdrop, Europe has much to fear from the ).S. fiscal cliff. *osted in +tocks - U.+.

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"&1" ,o$ember+tock Market )log - (inancial )log - 4n$estment )log - 5echnical Ana... *age 1@ of 13

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+hort 5akes is a stock market blog u!dated regularly by 1io$acco 1a!ital Management, 1. 5his financial blog co$ers in$esting to!ics, such as economic cycles, stocks, commodities, currencies, and technical analysis.

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1o!yright C "&1& 1io$acco 1a!ital Management, 1. All =ights =eser$ed. 1hris 1io$acco is the 1hief 4n$estment ?fficer for 1io$acco 1a!ital Management, 1 /11M2. 5erms of Use. 5his article contains the current o!inions of the author but not necessarily those of 11M. 5he o!inions are subDect to change without notice. 5his article is distributed for informational !ur!oses only and should not be considered as in$estment ad$ice or a recommendation of any !articular security, strategy or in$estment !roduct. 5he charts and comments are not recommendations to buy or sell any security. Market sectors and related #5(s are selected based on his o!inion as to their im!ortance in !ro$iding the $iewer a com!rehensi$e summary of market conditions for the featured !eriod. 1hart annotations are not !redicti$e of any future market action rather they only demonstrate the o!inion of the author as to a range of !ossibilities going forward. All material !resented herein is belie$ed to be reliable but we cannot attest to its accuracy. 5he information contained herein /including historical !rices or $alues2 has been obtained from sources that 1io$acco 1a!ital Management /11M2 considers to be reliableE howe$er, 11M makes no re!resentation as to, or acce!ts any res!onsibility or liability for, the accuracy or com!leteness of the information contained herein or any decision made or action taken by you or any third !arty in reliance u!on the data. +ome results are deri$ed using historical estimations from a$ailable data. 4n$estment recommendations may change and readers are urged to check with tax and in$estment ad$isors before making any in$estment decisions. ?!inions ex!ressed in these re!orts may change without !rior notice. 5his memorandum is based on information a$ailable to the !ublic. ,o re!resentation is made that it is accurate or com!lete. 5his memorandum is not an offer to buy or sell or a solicitation of an offer to buy or sell the securities mentioned. 5he in$estments discussed in this re!ort may be unsuitable for in$estors de!ending on their s!ecific in$estment obDecti$es and financial !osition. *ast !erformance is not necessarily a guide to future !erformance. 5he !rice or $alue of the in$estments to which this re!ort relates, either directly or indirectly, may fall or rise against the interest of in$estors. All !rices and yields contained in this re!ort are subDect to change without notice. 5his information is based on hy!othetical assum!tions and is intended for illustrati$e !ur!oses only. *A+5 *#=(?=MA,1# D?#+ ,?5 FUA=A,5## (U5U=# =#+U 5+. 11M would like to thank +tock1harts.com for hel!ing +hort 5akes create great looking charts

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