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


Friday, 30 January 2015

30 Jan 2015 - Something To Bear In Mind (BIG REVIEW)

Where do I even begin?  Today, the market gave us so much yet to the average chart reader it probably was just a regular day.  Do you see the Market Sentiment to the right in green?  Well that is about to change.. By the end of the week today this indicator has changed to a recessive signal.  I will add the chart later when data has been updated to give you the current look.

As for EW is concerned, there are multiple scenarios, but I am leaning towards the bearish counts.  This is due to our very bearish signals.  I am not calling a crash, but to notify you that we are in bear mode.  At least until we get a signal that says otherwise.  Todays intra-day rally couldn't even breach above the 75 day ma.  For me this moving average is very important that no one really uses. Why? just look at the bars during the move above or below the 75 day ma provided below.  Below are also a bunch of 15min charts that give an EW count, and although bearish, wave E is still very much valid and a rally can still happen.

That said,  lets turn to the favoured indicators.  Not only has our MT been signalling a Down trend since the beginning of January 2015.  We are guaranteed that next weeks open will keep the MT to the downside and more bearish than ever Mid-Term (this increases the chance of a long-term bear).  Adding to this is my philosophy of the SYNC indicator.  Signals are greater when indicators are following the same trend, and right now intra-day closed trending down, the ST closed trending down, and noted above the MT has closed trending down.  Is it a surprise that we are also holding price at a support that has been holding since Mid-December?  So if you guessed it, this is a critical support.  We will call this the 200 day ma support since it is basically within range even if it has not touched.  If we look at it from a bigger perspective the 200 day is basically there.

PA - Many love this indicator because they have told me that this is where they have made good low risk profit.  I base it on OB/OS signals.  If you have been following me, you would already know when this happens.  I don't make it a mystery, but you still have to do your work.

"The world does not owe you anything, so you have to work for it".. I don't know who said it, but I have heard it from many.

So regarding this PA, we are now close to, and may I add probable of opening Monday of next week at a PA signal Acceleration DOWN.  This is different from an intra-day level, because from my experience, higher time frames often give stronger signals.  Zoom in the charts and you see many small accelerative moves, but zoom out and you will see those accelerative moves add up.  This is the same method when looking at smaller and larger time frames.

This is why I urge everyone trading to get a charting service like STOCKCHARTS.COM  It is worth every penny.  BTW. If you are going to sign up for it, please  use me as your referral. lol.  Cheap marketing I know, but I swear by this as I show you everyday in my blog posts the cool doodles I make.  (3mprotect@gmail.com)

Bottom line review:

-Recession signalled
-75 day ma resistance
-200 day ma doorstep critical support
-Indicators are in SYNC
-EW counts looks good for bearish scenario
-PA most likely Acceleration signal for downside.

of course things can change, but I am not about making promises here.  This blog is all about weighing the risk to favour your trade. Even with lagging signals, I often say that eventually it will clear up when the volatility shifts to favour one side or the other.  We are not smarter than the market, so the saying goes.  "If you can't beat them.... Use them"


I forgot to mention for those who follow the Bradley Siderograph HERE.  As you can see the signals below have been divided by Long, Mid, and Short Terms.  Combined they print a picture of likely strength within the dates provided.  Next strong date Feb 1, 2015 (As shown on the Mid-term Chart).
For those of us Canucks who worry about the economy.. Well, the charts for the TSX doesn't look good for next week but the intra-day trends are trying to stay strong..  Good luck with that I say.  

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