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Charting the Markets

Monday, 29 Dec 2008 | 6:22 PM ET

If you watch Fast Money regularly, you might remember that on October 13th Carter Worth was among the first chart watchers to signal a bottom.

Although his call might have been a tad early, the S&P remains stuck in a range -- and that's exactly how Worth interpreted patterns in the S&P.

He's been pretty accurate with other calls, too. So we couldn’t help but wonder, what does Worth see in the S&P chart as well as other stock charts going forward? Following is a summary of what he told us.

S&P 500

Patterns now look very similar to patterns earlier in the decade. And just as we did not break out above the top in 2000, we should not break below the low of 2002. However, we stayed at those lows for about 8 months. The same should be true again.




Gold

If you look at charts of the three largest gold miners Barrick (ABX) (which you see here) as well as U.S. Gold Corp (GG) and Newmont (NEM), have all rallied 100% off their October lows. In the same period gold has only moved about 25%.





In other words, the gold stocks have doubled but gold itself hasn't moved nearly as much. The assumption is that gold stocks hit their heads right here.





Oil

Our bet is that oil is overdone on the downside. I’d sell puts and wait it out. Talk of $20 a barrel is probably as silly as talk of $300. Take the opposite side of the trade and get long.





VIX

Our hunch is that there will be an abatement of volatility and that we stay in the apathy phase, that we’re in now. We don’t think the market does anything surprising in January, but rather trades in a range that’s persisted since October.

To see our interview with Carter Worth please watch the videos!

Fast Money Chartology
The Fast Money traders read the charts and look at what's in store for 2009.

From Fast Money

Fast Money Gold Trade
The gold trade, with Carter Worth, chief market technician at Oppenheimer Asset Management

From the Fast Money Final Call on Closing Bell


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Trader disclosure: On Dec. 29th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (DIS), (WMT), (SDS), (TM), (MSFT); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (DOW) Call Spread; Najarian Owns (MSFT) And Is Short (MSFT) Calls

GE Is The Parent Company Of CNBC

Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV)

Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Virtus Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (OFC), (DLR), (EXR), (IGE), (MAC), (DBC), (DBV), (SKT), (UA), (CLB); Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights

  Price   Change %Change
NEM
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G
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ABX
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