“Those who have knowledge don’t predict. Those who predict don’t have knowledge.” Lao Tzu, Chinese philosopher, 6th century BC


Wednesday, 31 July 2013

31 Jul 2013

What a Whipsaw day.  Intra-day proved to be hard to analyze today.  It was best to stay out, but on the last update we mentioned that bias was to the downside.  The monthly closed with a full body candle.  Not something I wanted to see if this was the top but it can happen I suppose.  As for the weekly we still have until Friday to see what type of candle it would print out.

The Daily chart is by far the best look at a reversal candle.  Not only did we see a reversal candle, but it turned into a red one by days end.  The 60min chart shows an bearish engulfing candle, and should suggest more down side ...  Again we find ourselves between the 20ma and the 75ma of the 60min chart.  We just can seem to push away from these MA...

Note that INDU made new highs which doesn't really answer much because we made a diagonal pattern up on the 5min chart suggesting that if we had the FINAL HIGH then the SPX made a FAILED 5th Wave pattern non-confirming with INDU.  A simpler explanation would be that the B wave is making an expanded flat for INDU and not for the SPX.  Ultimately they both say the same thing and that the downside is still much in progress.

Main-Trend: UP
Short-Term: DOWN

The chart below depicted in green count upwards of a 1-2-3-4-5 which can be considered a failed 5th since it did not make a new high, but that being said.  The top count of a B wave green is still much alive.


3:40pm UPDATE: Best to stay out until the whipsaw is over.. but look for downside bias for C wave.

2:40pm UPDATE: Exit short positions...

12:10pm UPDATE:

Yesterdays Intra-day call to exit just prior to close was a good call.  Todays prices seem to be on the upward bias.

Although not indicated by a green arrow, we are on a intra-day uptrend.

As it stands we could be facing a deep retracement for a B wave or a 2nd wave.  Here is the complicated count.  The bullish possibility is that we make new highs and its at its 3rd wave up of a5th wave.  Anything goes...

Tuesday, 30 July 2013


I don't know about the analysts out there but I'm seeing a danger for financial stocks..


Just to name a few...

30 Jul 2013

Still stuck between the 60min 20ma & 75ma zone.  Our intra-day short signal was threatened by a rising price action which did not trigger a buy.  Nonetheless, being disciplined never killed anyone.  Short-term still on a down trend, and a breakout between the 2 moving averages is key.

Main-Trend: UP
Short-Term: DOWN


3:20 pm - Exit short at a small profit or stop loss..

Monday, 29 July 2013

29 Jul 2013

Perhaps the weakest of todays sector is the "Financials".  We haven't seen this divergence in a while.  The financials managed to make lower lows from last weeks low.  As for the SPX and other indexes, they stayed well above last weeks low.  Some say where financials go the economy follows.  Maybe its time for a double check of which banks are healthy and who might be likely to take your money from your piggy bank.

Todays move in the SPX resulted in another whipsaw pattern and hard to say which EW pattern is emerging.  But on a 60min level prices seem to be stuck between the 20ma and the 75ma.  The last time it did this it accelerated from a bottom put in just a few weeks before on June 24th.  Now it is again supporting above the 75ma on a 60min chart.  So be ready for an acceleration.  Which direction will be based on our indicators.

Main-Trend: UP
Short-Term: DOWN



Friday, 26 July 2013



Submitted by Michael Snyder of The Economic Collapse blog,

If our leaders could have recognized the signs ahead of time, do you think that they could have prevented the financial crisis of 2008?  That is a very timely question, because so many of the warning signs that we saw just before and during the last financial crisis are popping up again.  Many of the things that are happening right now in the stock market, the bond market, the real estate market and in the overall economic data are eerily similar to what we witnessed back in 2008 and 2009. 

It is almost as if we are being forced to watch some kind of a perverse replay of previous events, only this time our economy and our financial system are much weaker than they were the last time around. 

So will we be able to handle a financial crash as bad as we experienced back in 2008?  What if it is even worse this time?  Considering the fact that we have been through this kind of thing before, you would think that our leaders would be feverishly trying to keep it from happening again and the American people would be rapidly preparing to weather the coming storm.  Sadly, none of that is happening. 

It is almost as if they cannot even see the disaster that is staring them right in the face.  But without a doubt, disaster is coming. The following are 18 similarities between the last financial crisis and today...

#1 According to the Bank of America Merrill Lynch equity strategy team, their big institutional clients are selling stock at a rate not seen "since 2008".

#2 In 2008, stock prices had wildly diverged from where the economic fundamentals said that they should be.  Now it has happened again.

#3 In early 2008, the average price of a gallon of gasoline rose substantially.  It is starting to happen again.  And remember, whenever the average price of a gallon of gasoline in the U.S. has risen above $3.80 during the past three years, a stock market decline has always followed.

#4 New home prices just experienced their largest two month drop since Lehman Brothers collapsed.

#5 During the last financial crisis, the mortgage delinquency rate rose dramatically.  It is starting to happen again.

#6 Prior to the financial crisis of 2008, there was a spike in the number of adjustable rate mortgages.  It is happening again.

#7 Just before the last financial crisis, unemployment claims started skyrocketing.  Well, initial claims for unemployment benefits are rising again.  Once we hit the 400,000 level, we will officially be in the danger zone.

#8 Continuing claims for unemployment benefits just spiked to the highest level since early 2009.

#9 The yield on 10 year Treasuries is now up to 2.60 percent.  We also saw the yield on 10 year U.S. Treasuries rise significantly during the first half of 2008.

#10 According to Zero Hedge, "whenever the annual change in core capex, also known as Non-Defense Capital Goods excluding Aircraft shipments goes negative, the US has traditionally entered a recession".  Guess what?  It is rapidly heading toward negative territory again.

#11 Average hourly compensation in the United States experienced its largest drop since 2009 during the first quarter of 2013.

#12 In the month of June, spending at restaurants fell by the most that we have seen since February 2008.

#13 Just before the last financial crisis, corporate earnings were very disappointing.  Now it is happening again.

#14 Margin debt spiked just before the dot.com bubble burst, it spiked just before the financial crash of 2008, and now it is spiking again.

#15 During 2008, the price of gold fell substantially.  Now it is happening again.

#16 Global business confidence is now the lowest that it has been since the last recession.

#17 Back in 2008, the U.S. national debt was rapidly rising to unsustainable levels.  We are in much, much worse shape today.

#18 Prior to the last financial crisis, Federal Reserve Chairman Ben Bernanke assured the American people that home prices would not decline and that there would not be a recession.  We all know what happened.  Now he is once again promising that everything is going to be just fine.

Are the American people going to fall for it again?

It doesn't take a genius to see how vulnerable the global economy is right now.  Much of Europe is already experiencing an economic depression, debt levels in Asia are higher than ever before, and the U.S. economy has been steadily declining for most of the past decade.  If you doubt that the U.S. economy has been declining, please see my previous article entitled "40 Stats That Prove The U.S. Economy Has Already Been Collapsing Over The Past Decade".

And the truth is that most Americans already know that we are in deep trouble.  Today, 61 percent of all Americans believe that the country is on the wrong track.

It isn't that so many people are choosing to be pessimistic.  It is just that an increasing number of Americans are waking up to the cold, hard reality that we are facing.

Decades of incredibly foolish decisions have brought us to this point.  We allowed our economic infrastructure to be gutted, we consumed far more wealth than we produced, our politicians kept doing incredibly stupid things but we kept voting the same jokers back into office again and again, and over the past 40 years we have blown up the biggest debt bubble in all of human history.

We have been living so far above our means for so long that most of us actually think that our current economic situation is "normal".

But no, there is nothing normal about what we are experiencing.  We are entering the terminal phase of a colossal debt spiral, and when it flames out the economic devastation is going to be absolutely spectacular.

When the next major wave of the economic collapse comes and unemployment soars well up into the double digits, millions of businesses close and millions of American families lose their homes, I hope that those that are assuring all of us that there will not be an economic collapse will come back and apologize.

There are tens of millions of people out there right now that are not making any preparations at all because they have been promised that everything is going to be okay.  When the next financial crash happens, most of them will be absolutely blindsided by it and many of them will totally give in to despair.

Don't let that happen to you.

26 Jul 2013

Another whipsaw day, and the day traders are loving it.  But be weary of which side your on.  Todays intra-day triggers were pretty good considering it wasn't precisely at the tops and bottom.  We always exit our position at the end of the day for intra-day analysis, as the main trend is still the most important to follow.

Main-Trend: UP
Short-Term: DOWN

5Min EW analysis...

The impulsiveness today could be explained as a red c wave of green B and would explain the 3 wave move down today to red b then red c up.  This would allow for the green C leg to push lower in another impulsive manner to complete another corrective wave before resuming its higher highs.  So next week should tell a definitive story as to what pattern the markets are really drawing out.  For now we are still on a Main trending pattern, with a short term correction.



Today is also a reactionary day all the way to Aug 2nd.

Thursday, 25 July 2013

25 Jul 2013

Today was a whipsaw day pivoting 5 times in 1 trading day.  We managed to form a wedge pattern so it is fitting for us to look for a downward bias tomorrow.  This morning the Intra-day signaled a long position and did not get a sell by end of day.  Although the pattern suggest looking for short position, we should allow the indicator that we use to confirm it.

Main-Trend: UP
Short-Term: DOWN

2 ways to look at the EW pattern forming.  Either the downward movement is an ABC pattern or its forming 5 full waves down and may start a new declining trend.  For now bias is for an ABC correction as our main trend is still UP.


We had a buy signal from the lows this morning but I did not have a chance to post.

Wednesday, 24 July 2013

24 Jul 2013

Our Intra-day analysis yesterday for the SPX has triggered a movement of prices downward.  This may just be a short term as our Main trend is still UP.  The 75ma for the 60min chart seems to be a support zone so watch the level around 1678.  If this is a new trend then we should see this movement to the downside affect our main trend to turn down.  Without the Main trend in agreement this move just becomes a correction and higher highs should prevail.

Main-Trend: UP
Short-Term: DOWN

Tuesday, 23 July 2013

23 Jul 2013

SPX prices are resting on one of the angles we drew up from a week ago.  Can it reach the 1700 level as price momentum gets weaker and weaker?  Our intra-day charts closed with a sell signal, and although we have placed a sell arrow, and because we are on an uptrend.  We would not initiate a sell or short overnight but only during market hours for intra-day trades.

Main-Trend: UP
Short-Term: DOWN

Intra-Day Signals... Signal at end of day for a sell
If we don't have enough energy to reach 1700 and we want to call a top here, then this is how this top can be counted under EW theory.  This fits well because 3wave patterns as an ending pattern is one of the rules to EW ending trend.  As it stands also, we do have a diagonal end to the pattern as well.

Monday, 22 July 2013

22 Jul 2013

Days keep passing, price keeps inching, and momentum keeps getting weaker.  It is important to keep momentum in mind.  That said I do believe we still have not hit the top, but close to it.  Our intra-day signals have not changed as well but it is looking for a turn down soon.

Main-Trend: UP
Short-Term: UP


Friday, 19 July 2013

19 Jul 2013

Slow day but a positive one, which is very surprising since Detroit just filed for bankruptcy and the tech stocks were not to rosy after yesterdays earnings.  I believe that we are close but we must keep our objective which is to follow our indicators.  Yes.. I keep writing it here, but it is a way for me to keep discipline like how our parents always say the same thing to us that in the end it is ingrained in us.  That is the only way to make money here.

The 60min MACD still looks weak as prices creep higher and higher.  An eventual break will come so keep alert.  On a monthly scale we can see prices have pierced through the UPPER BB line and this could be another signal that this month could be a possible reversal month.  Always keep THIS CHART in mind for the next few weeks.  It will be important.

Mid-Term: UP
Short-Term: UP

Thursday, 18 July 2013

18 Jul 2013

The SPX managed to push up through one of the resistance line only to find itself stuck below another one.  Our intra-day chart today gave a buy signal that does not look over.  On a daily chart both SPX and INDU seems to be forming its 5 wave pattern.  This EW pattern could potentially be a ending to the trend that so many bears are looking for, but we must follow our indicator.

Mid-Term: UP
Short-Term: DOWN

The upper BB on a daily scale is at 1706.80.  This price should move by tomorrow but it would be no surprise if we head to this range and pierce the Upper BB line before we reverse.
The chart below is what I wanted to share with you today that I feel brings warning that something wicked this way comes.  We have once again reached the upper maximum of these percentage of stocks above the 200 ma and the divergence does not help its cause for higher high.  If anything it is saying that the SPX 500 is reaching higher highs and stocks above 500 are weakening.  Last time these high occurred we had:
2007 housing / banking crisis
2010 May flash crash
2011 correction (6-7 months)
I just don't see why it would be any different this time.  Also notice before the divergent top of each crisis that there were sharp and fast corrections.  We had our sharp and fast correction and now should be the time to watch for a good move down.  This time the bulls wont have another chance for a support to save them.


This mornings move up caused us to go long intra-day, and depending on where your short level is or stop loss is.. you could have made a few or lost minimally.  Yesterday we stated that a sideways move would have us going higher and that's what it did and sideways always gives trader a hard time due to the fact that indicators turn and prices are tight without margin for profit taking, but if you have a stop loss put in then you would be ok at this point.

Wednesday, 17 July 2013

17 Jul 2013

Our Intra-Day signals for the SPX is still on the sell side, and nothing has changed since yesterdays short indication even after the rebound from the lows.  All signs point to more sideways corrective move and if we don't break our 60min up trending channel indicated on the chart below then we should see higher highs sooner than later.  As it stands our 75ma is also on that same uptrending channel support.  Our overhead resistance is still quite strong and it could just be a matter of time, but we have to respect its influence over the price movement. 

Note that a higher price breaking the May 22nd price high would allow our weekly to form a divergence.  So this possibility increases the chance that a higher high will be made.



We still have our sell signal for the intra-day.

Tuesday, 16 July 2013


MACDs are known for some things but early is never one of them.  What we can take away from it is the divergences that occur at tops and bottoms.  So we are again at that point where only if the MACD crosses down with the divergences intact can we say that the top is in.

Therefore look for a topping out process with the MACD confirmed after it has crossed down.


LULU looks like it might be in a great setup for a downside potential.

16 Jul 2013

Yesterday we indicated that the 60min chart for the SPX was looking weak due to its MACD and overhead resistance lines.  Today we turned down and below the 80 Stoch. line also discussed yesterday.  As you can see from the INTRA DAY post there was a sell.  Remember that this is only intra-day and I am going to provide examples within the next few weeks that trading does not have to be so hard and so full of indicators.  It requires but only one thing, and that's DISCIPLINE

We are Intra-day on a down trend but keep in mind our main trend indicator...

Short-Term: DOWN


INTRA Sell signal trigger yesterday which continued lower today.

Monday, 15 July 2013

15 Jul 2013

The markets today seemed to have taken a breather or it is having a hard time with some resistance lines.  Notice also that on the 60min SPX chart below that the MACD is looking rather weak, with the Stoch. curling down.  We can only be safe to say that a 60min has turned down when the stochastics has actually crossed below the 80.

Mid-Term: UP
Short-Term: UP

Friday, 12 July 2013

12 Jul 2013

A 60min Black candle appeared with a flat top.  Both a reversal trait.  Although its a reversal indicator we have to use it as a caution for  potential downside because our Mid-term confirmed today that we are on an uptrend. 

Mid-Term: UP (Confirmed)
Short-Term: UP

Flat tops and bottoms shown below.  Todays Flat Top showed up on the weekly, daily, and 60min chart among the important time frames.

Thursday, 11 July 2013

11 Jul 2013

A good move up for markets today busting past the A=C line of 1666 SPX.  Momentum although overbought, clearly looks to be for more upside.  The daily upper BB has been breached again and our indicators are still calling it the way it is.. UP. 

The EW patterns have not worked consistently again, but it is not for the sake of us not knowing our counts, but more of the wide variety of choices that bests play against us.  21 different pattern vs. a buy or short toss up.  You are better off doing the latter as it gives you a 50/50 chance.  But don't count EW out just yet, because we can use it better as guides than for its counts.  That is to figure out if a correction or impulsive move was just made.  Clearly the move up from the lows made on the 24th is an impulsive move.  It is also clear that our indicators have been working well with our short-term being on an uptrend for 14 days straight while our mid-term although unconfirmed has been up for 4 days.  Therefore Monday July 8th was our earliest change in trend since both indicators became in sync with each other.  It was also a day after our reactionary weekend of July 6th and 7th called by Prandelli as a LOW (not actual low).

Mid-Term: UP (Unconfirmed)
Short-Term: UP


It looks as if the RUT has a better EW pattern that counts well compared to the SPX or the DOW.  Have a look...

Judging from these EW patterns and its weekly stochastics we are close, if not ready for a turn down.  GLTA...

Wednesday, 10 July 2013


10 Jul 2013

For EW purposes A=C would have us hitting the 1666 mark on the SPX.  For now though I will assume that our trend is going higher since our indicators favour that scenario.  Any correction from here must not exceed the said lower support I gave yesterday of 1604.  A break of this heightens the chance for more bearish risk.  Our 60min holds the clue as to how long the trend down should last.  A quick move by the 60min stochastics to the downside might have a short-term bearish implication and long-term bullish trend.

Mid-Term: UP (Unconfirmed)
Short-Term: UP


I have deleted some info on the chart for those who pay the service.  This is just to show so far how his 1943 cycle is turning out with the current Dow chart.

If you are interested in his subscriptions you can go HERE...

Tuesday, 9 July 2013

9 Jul 2013

Yesterdays 60min divergent SIGNAL is still in play.  Our EW pattern is also still intact although we have a high today that barely kept it from being void with about a .01 SPX points.  The Bulls need to break the 1654.19 range and the Bears need to break the 1604 range.  But so far the EW count from the lows made on the 24th could be counted as and ABC up pattern. 

Mid-Term: UP (Unconfirmed)
Short-Term: UP

Monday, 8 July 2013

8 Jul 2013

The SPX managed to push above the Blue dotted trend line, and it seems we still have at least one more push up to complete a possible divergence on the  60min. before we move lower.  A violation higher past 1655 SPX would negate our 1-2 1-2 count as an EW pattern.

Mid-Term: UP (unconfirmed)
Short-Term: UP

Our indicators says that we are now on an uptrend but our Mid-Term indicator has not confirmed this yet.  A position should be taken for upside on a intra-day basis or set with a stop loss limit.

60 Min Chart...

There is something going on with the 60Min. chart.  It can be a potential trend reversal to the downside so long as our short-term trend follows.  We would need to see an impulsiveness to the move, and our signal stay in divergent mode.

Friday, 5 July 2013

5 Jul 2013

Markets did a lot today, but not a reversal for the bears.  In fact the SPX surged into the close like it stole something.  Nothing has changed in our trend and the gap that was left open for a few weeks has finally been closed.

Prandelli has a turn date on July 6th and 7th but it will fall on a weekend.  todays move could not be considered a low (as he stated it could be).  Therefore it will be more like a high if one was a betting man.

Mid-Term: DOWN
Short-Term: UP (Since 25th of July.. 9 days ago).

Prices might find resistance on a down trending bold blue dotted line indicated on the chart.

Tuesday, 2 July 2013

2 Jul 2013

The SPX has failed to close above the 20day ma for 2 days straight.  This looks weak for markets and could be a surprise coming after the holiday.  We still have one more try and as they say 3rd time is a charm.  We still have a gap that has not been closed but that is just expectation.  We could revisit that gap if its not closed in the future if the markets decide to head down.  There is no rule that gaps should be closed immediately.  A great example is the gap made at the beginning of the year.

A sideways pattern made of 3 waves has been developing since the 27th of June. We should expect a move up based on EW.  Again, let your indicators do the talking.

Mid-Term: DOWN
Short-Term: UP

Monday, 1 July 2013

1 Jul 2013 HAPPY CANADA DAY!!!

The SPX had a hard time closing up above the 20day ma and printing a reversal candle.  I would guess it will try to make another try tomorrow.

Mid-Term: DOWN
Short-Term UP