Rising Credit Card Usage Caught Osama Bin Laden
- Posted by Greg Harmon
- on May 2nd, 2011
It always seems clear in hindsight. Crystal clear in fact. But the art is in seeing it as it happens and then acting on it. It was out there if you were paying attention. Let me paint the scene.
The Al Qaeda leader had been in hiding since September 11, 2001. It was known he had a kidney ailment so it was presumed he could not be constantly moving and still get dialysis. Most thought he was in a cave somewhere. Come on really, dialysis in a cave? Clue number 1. Turns out he was living in a comfortable house in a nice Pakistani neighborhood. It was presumed he was funded by Libya or Egypt or Yemen or someplace like that. With the unrest in those countries the funding had dried up. Clue number 2. Every time the Bin Laden’s ordered take out they would pay with cash to avoid attracting attention. And they hit Falafel King nightly. Hard. With the funding gone, he turned to credit cards. The final Clue that led to his secret lair. This can clearly be seen in recent weeks in the charts of American Express (ticker:$AXP) , Visa (ticker:$V) and Mastercard (ticker:$MA). Just look at the weekly charts. They all show a break of the downtrend at the beginning of March as the North Africa/Middle Eastern unrest began to gain strength, and have been rising ever since. The question now is can they continue?
American Express, ticker:$AXP
The weekly chart for AXP shows it approaching 50 a significant long term resistance level. But as it is rising the Relative Strength Index (RSI) is also rising and the Moving Average Convergence Divergence (MACD) indicator is increasing. About the beginning of April the Bollinger bands started to expand to allow for more upside and the price has been riding the top band higher. These are all positive signs. If this can sustain above the 50 level then the break of the channel would suggest an upside target of 63.25.
The Visa chart is equally bullish. It also has a rising RSI and increasing MACD as it approaches previous resistance at 80.00. The Bollinger bands are just starting to expand as it reaches the top. A hold over 80 shows resistance higher at 81.25, 85 and 92.50 before a potential run to the previous high at 96.50.
The Mastercard chart has had a great run also but with an RSI and MACD that are flattening perhaps this card has maxed out. If it pulls back look for support at 267 and 262. But with the Simple Moving Averages all sloping higher and the price continuing along the top Bollinger band it the tend remains higher.
So rising credit card stocks clearly pointed out increased usage by terrorists and led to locating Osama. The only remaining details that are not quite clear are whether the large increase in the usage of credit cards for a single Pakastani house on its owns led to the discovery, or if the delivery guy tipped off the soldiers when Bin Laden turned off the cash tips. This we may never know. But with continued unrest in the Northern Africa/Middle Eastern region, look for continued strength in the credit card stocks as terrorists worldwide run short of cash.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- Weekend Macro Roundup
- Top Trade Ideas for the Week of September 2, 2014: Bonus Idea
- Top Trade Ideas for the Week of September 2, 2014: The Rest
- Top Trade Ideas for the Week of September 2, 2014: The Rest Premium
- Top Trade Ideas for the Week of September 2, 2014: The Best
- Should Trading and Investing Really Not be Fun?
- SPY Trends and Influencers: Monthly Edition August into September 2014
- SPY Trends and Influencers August 30, 2014
- Macro Month in Review/Preview August into September 2014
- Macro Week in Review/Preview August 29, 2014