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.