SkyPeople Fruit Juice, Inc is a Kiwi and other specialty fruit juice maker out of China.  It is expanding distribution and there seems to be a developing growth story here.  The chart of SPU shows that SkyPeople Fruit Juice, Inc has busted out of a somewhat large coil and now headed higher into a new price trend.

SPU has also recently busted into the RSI power zone above the 70 level.  The last time SPU did this it led to an approximate 20 day run of greater than 50%.  It would seem it can do it again as long as the daily 14 day RSI remains in the powerzone above 70.  See the vertical dotted red lines on the chart below.

It is no surprise that recent volume on the up move has been light.  I definitely expect it to expand as we get into early September.

7.25 is pretty significant resistance but after that it is blue skies and no previous resistance.  Perhaps SPU is coming of age.  The juice business is quite a simple business.  Depending on their business model, margins can be quite high.  That is part of the reason why Warren Buffet bought Coca Cola aside from brand strength.

Brand strength is what SPU is probably missing at this point.  Although I cannot speak to that fact in China.  I do not know how popular it is there now in terms of brand recognition.  But the market is clearly huge there and they have some good competitive advantages as far as their kiwi fruit juice production ability and its location.

We are talking near zero market penetration in the United States, although I do recall them entering the California market soon or maybe even right now and plans for possible further USA distribution.

The SPDR S&P 500 ETF has still not after 6 full trading days managed to break above or test the 113.20 swing high which was on 212 million shares back on 6/21/2010.  Today the volume on the SPDR S&P 500 ETF was only 118 million shares.

We basically have traded sideways in a rectangle formation for the last 6 trading days right under the critical 113.20 swing high.

Here are the bullish and bearish points for the SPY:

Bullish:

1. Price during the last 6 trading days has not given much back and instead only moved sideways.  This is 6 days of sideways cause on low volume.  It is potentially bullish in the sense that the 6/21/2010 swing has not been tested and may get tested tomorrow on a sign of strength.  It would have been much more bearish setup if we had tested the 6/21/2010 swing on one of these recent very low volume days of 112 million shares and then closed under the 6/21/2010 swing high.  INSTEAD, we are hunching right UNDER the 6/21/2010 level and have now built 6 days of sideways cause.  I suspect the bulls want to pop this market over the 113.20 tomorrow.
2. If the bulls CLOSE the SPY above the 113.20 tomorrow then it can still allow for more room to the upside even if the volume is very light as it has been recently.
3. The bulls now have 4 full touches on the green rising up trendline since July 1st, 2010.
4. WEEKLY MACD is just mere inches away from a bullish crossover.
5. The 50 day moving average has curled up and if we start to move quickly higher in the next 5 to 10 trading days it will start to position the 50 day moving average into a stance for an upside cross of the 200 day moving average negating the previous bear signal.

Bearish:

1. If the market moves above the 113.20 swing high tomorrow and then closes under the 113.20 AND also shows very light volume (maybe 150 million or less), then that would be a valid sell signal and the market has shown us it wants to trade back to the other side of the range which is down from here or near the bottom of the rising wedge formation near 112.
2. If somehow the SPY can break well under 112 tomorrow it would be a break down from the green up trendline and a break down from the rising wedge.  This scenario now looks very unlikely to me but I am open to being surprised.  Surprises can and do happen in a low volume type month like August.
3. The bears really have their work cut out for them.  They are going to have to bring in all the kings horses and all the kings men to try to defend the 113.20 level on the SPY.  I am afraid they are not going to succeed.  It does not look good for them right now.
4. If I had to name just one thing in favor of the bears it would be that many times in the past mid to late August is an ideal time for massive corrections to begin into the October period.  So if the bulls do manage to take us higher we may get to the next critical 118 level as a possible bearish topping level for some type of correction again.

It would seem that some very big volatility is about to come into the market during the next 3 trading days.  The key levels are very clear and the patterns and structure of the market will guide the way…

The next three trading days are supposed to be extremely negative cycle and Astro dates.  But if you look at the chart of the SPY it would seem as though the market could care less about any astro effects at this point.  Unless the market is moving up into these dates as a high.

I think at this point I can almost stick a fork in all the astro dates I was talking about before.  They have not delivered anything substantial.  In fact them seem to have inverted.  Whether or not they invert during the next three days remains to be seen.  But the weekly trend is now poised to move us up.

It will be very interesting to see how the market closes tomorrow, perhaps there will be a surprise in the tape action.

The German DAX index closed at a new 52 week high today.  This is important.  It should be telling us something.  It is telling us that bearish fumes are evaporating quickly now as we move well into the second half of 2010 and that bulls may want to start running again as the consumer comes out of the shadows again.

Despite the new 52 week high today for the DAX there is still room for another downward consolidation.  But if a downward consolidation starts it is well supported by a very strong demand line that appears to be the bottom part of a large ascending triangle formation since April 2010.

It is very difficult for me to see anything bearish about the DAX right now.  I think it is another little clue about what the US markets will do soon.

It is interesting to me that the DAX is leading like this.  Clearly it has a lot to do with the Euro that was absolutely clobbered in months past and made German goods more competitive to the rest of the world.

This consolidation since April 2010 is a good 3.5 months of sideways cause which is more than sufficient fuel or energy for a new more sustained move.

The Jakarta Composite is trading at lifetime highs in what I consider to be one of the most amazing stock market recoveries I have ever seen.  I am posting this chart just to show that sometimes the ‘unthinkable’ can and does happen.

Looking at the chart below near the early 2009 lows it probably seemed as though a super fast recovery and then new life time highs would have taken many years to develop.  This was not the case at all.  Once the Jakarta Composite started rallying again it seemed to never really stop until it got back up to the old all time highs and then did a handle formation to complete the large cup and handle chart.

This is one monster of a stock index and so it would seem that Indonesia is turning into a monster of an economy.

If you put the sp500 chart next to the Jakarta Composite it would seem that the US markets could make a similar run back up to the old highs.  Sometimes the impossible is possible in this crazy wide range swing trading type market we are in now.

The more I think about the most probable trading setups, the more I think that position trading is probably the most potentially profitable way to go because it allows you to participate in trends and ‘ride the bull’ so to speak instead of constantly pulling your hair out worrying about every little price tick.

Position trading is also probably the most gratifying because it allows you to take a somewhat more relaxed approach to trading and trust the trends.

I prefer to use a more flexible definition of position trading.  Perhaps most would say holding a position from 3 months to 1 year is a position type trade.  My view is that it could range from a couple weeks to a year.

But who cares about definitions.  It is more important to know when to position trade and when not to.  For me it all depends on the individual stock or index in question.  There has to be a compelling reason based on the chart as to why it would be best served as a position trade.

Viking Systems Inc. falls into the category of what I consider to be an outstanding position trade.  Viking Systems happens to be on the OTC BB exchange which puts it in the category of ‘highly speculative’.  I have traded many stocks that were on this exchange before and I can tell you that for the most part I barely cared that they were trading on the OTC BB exchange. 

More important for me is whether or not the stock has merits in terms of its price chart structure, volume relationships and other factors.

VKNG seems to have most of the elements I typically look for in a potentially outstanding position trade.  The technical analysis of Viking Systems Inc is outstanding right now and there is a fundamental picture that looks quite favorable as well going into October 3rd to 7th, 2010.  Admittedly I only skimmed the surface of the fundamental story, but I like what I see.  I recommend traders do some further good due diligence on this company.

Viking Systems is in the medical device sector and has a product they will showcase at the American College of Surgeons 96th Clinical Congress on October 3 to 7th, 2010.  There they will showcase their Viking 3D HD system, a tool for surgeons to do minimally invasive surgery in 3D instead of 2D.  According to Viking Systems they are the “only known supplier of stand alone, cost effective 3D vision systems” and “5% market conversion represents 100 million in sales”.

This is a very high priced product somewhere in the range of $80,000 to $90,000 a piece.  It would seem also that the market for this type of product is quite large as well given the huge improvements over 2D HD visualization in laparoscopic surgery.

You can read the company’s recent presentation yourself keeping in mind that obviously it is biased favorably towards the company.

The Technical Analysis of VKNG

The technical analysis of VKNG looks pretty damn good to me as a potential position trade into early October 2010, maybe even beyond that.  What happens typically is that you will see a stock trade INTO a key presentation date and then sell off on the news.  This presentation in early October is basically a big marketing push to a lot of surgeons who likely have very deep pockets.

So I suspect there will be a lot of excitement going into the event and then a ‘sell on the news’ situation quickly thereafter.  The company is in the final phases of development of this product and as far as I know has not started the assembly line so to speak to get this product sold.  From what I have read that should happen by the end of this year.

These low float type stocks tend to trade in a somewhat bi polar fashion.  They will trade all quiet and flat for a while and then burst in excited peaks and collapses.  So even if this type of stock is in a long term uptrend it can appear as though it keeps topping out because of the vertical peaks it creates.

The most amazing fact about VKNG is that in October of 2009 it traded from .005 (half a penny) to $1 in just 14 trading days.  This is by far the most powerful amazing run I have ever seen since I bought my first stock in 1994. 

If you had bought $1000 worth of the stock at .005 and sold at $1, that $1000 would have been worth $200,000 near the peak.  Amazing.

Since that time the stock has had a mini crash, but it has developed a new long term base 3/4 of a year long at a higher level.

So we had a tremendous sign of strength at first and then a nice long saucer bottom base building formation.  Within this saucer there have been a few big volume spikes which I interpret as accumulation.

Today we had a nice big demand high volume candlestick which followed a different one that occurred about 5 days ago.  This stock is being accumulated now in my opinion.  It wants to move to a stage 2 advance after a stage 1 bottoming formation.

The other key fact about VKNG is that it has volume at the swing trading highs of November 17 and 18, 2009.  This is very important because it means that this level will be retested, and in my opinion likely eventually exceeded.

Even if it is not exceeded, a move from .30 cents to $1 is not a bad move at all.

Today we closed above the .28 range which was key resistance. I expect .28 to turn into good support now.  The next very key resistance is .38 . If .38 is broken then VKNG can move quite quickly to .70 because there is a large tradable void there with minimal resistance.

The weekly chart is showing an MACD buy signal.

There was some selling that came in end of day today but I consider it more significant that VKNG was able to break and close above .28 today.

To a certain degree this stock is somewhat ‘immune’ to the broad market pattern.  VKNG has a mind of its own and I expect that trend to continue going forward.

I am giving VKNG a confidence level of 1 per my perception of the chart (on a rating scale of 1 being highest and 10 being lowest).  A confidence rating of 1 represents my highest level of confidence at the time of this writing.  For me to remain confident in VKNG it must maintain prices at or above .28 in the days and weeks ahead.

At some point I will do another follow up on VKNG to see how things are evolving.

A buddy of mine sent me this link a while back which has real time free futures charts.  This is a great way to keep track of the SPX500 futures on Sunday night or in the early morning before the regular market open.

I think a lot of people rely on CNBC or other major TV networks to watch the SPX500 futures but they never really get the whole picture if you just look at a simple quote.  Simple flash quotes are good for updates when you are on the road, but for depth and clarity go for the real time futures charts.

The app has free real time futures charts of the following:

1. DJ 30 Futures
2. US SPX 500 Futures
3. NQ 100 Futures
4. Germany 30 Futures
5. UK 100 Futures
6. France 40 Futures
7. EU Stocks 50
8. Canada 60
9. Japan 225
10. Hong Kong 40
11. Korea 200
12. India 50
13. Australia 200
14. US Dollar Index Futures
15. US SPX VIX
16. Gold Futures
17. Crude Oil Futures
18. Natural Gas Futures
19. US 10 YR T-Note Futures

I usually look at the SPX 500 Futures and the Gold Futures chart and occasionally some of the international indices.

Here is the link to the app.

It is a very nice app and great for clarity when you need it pre market or after market.  I also like that fact it also has a 5 hour time frame for getting good signals on a half day basis.

The only downside to this real time futures app is that it can get you into the habit of watching the market more than you need to.  But for those times where you need to stay ahead of the trend it is superb.

Bravo!

That is not my forecast.  I believe it is the forecast of David Bensimon with Polar Pacific Capital.  Apparently he has made some great calls on the market, gold and other commodities such as crude oil.

I am not quite sure of his method but it appears to involve the use of Fibonacci and time cycles and maybe Gann as well ?

It has been quite difficult to find mega bulls lately, ones making extremely bullish forecasts.  Perhaps David Bensimon is the exception to the rule.

First I would say that it is probably way too far a stretch to even be talking about anything higher than 1500 in the sp500.  Why not set a target of 1500 first since it is such a huge resistance level of decade importance, and then if it is successfully broken topside, then start to talk about 2000’s and higher.

It would appear to me at this time to be extremely unlikely that 1500 would get broken even if we did make another charge up there next year or thereafter.

The longer the forecast the more difficult it is.  He is also on record for saying that gold should move to 2200 to 2400 an ounce I believe by end of next year.

Anyway if you want to listen to some of his recent interviews you can here.

If I had to come up with a strong reason why he is right or why the market will go much higher into end of this year or next then it would have to do with just one simple long term price chart that shows the current correction was only a .382 retracement so far of the entire advance since the March 2009 lows.

Markets and stocks that only do 38% retracements after extremely strong advances should be presumed to have lots of internal strength and weak sellers.

Some of the strongest moves I have seen in individual stocks have occurred after they have completed 38% retracements and then moved higher.  Every stock, index and future must make a choice when it starts going into a correction from a strong advance.  The choice of retracement it makes is very telling about what it wants to do next.

In case you have not seen it before, here again is the Gold price 34 year seasonal price chart.  A very timely chart right now as we are into the first week of August.  Sometimes it is easy to forget that the gold price can move very fast seemingly out of nowhere.

September is really the major kick off month for gold.  I should say that I will maybe be a bit surprised if we do not see the gold price show some fireworks in September of October of this year.  The price structure looks ripe for a jump higher during those months now that gold has bounced off of its longer term up trend line.

Source: www.mrci.com