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


Thursday, 31 December 2015

2015 Ends In The Guillotine

The only one that survived 2015 was Tech.  The SPX and DOW has ended its 3 years of positive closes.  Although there is no rule that says the following bar should be bearish, it does not lend itself to anything good when you couple this with weakness in all aspects of the world economy...

SEN: Bearish
ST: DOWN (To close the year..)

The fact that both ST and PA are in SYNC is not a good sign to start the year and with a bearish sentiment, one could only imagine, but enough gloom.. HAPPY NEW YEAR... Bears..

Wednesday, 30 December 2015

30 Dec 2015 - Yearly Bar Tracking

So far of the major markets, the only yearly bar at a positive going into year end is the SPX, DAX, CAC, NASDAQ.  While these 4 are positive, 2 (DAX, CAC) are sporting a reversal yearly candle. The SPX is at the dividing line between being bullish and bearish and should be interesting by closing tomorrow.  This leaves only the NASDAQ that is positive, which does not say much when you couple these with Indexes that are already in the red, ie. FTSE, DOW, NYSE, RUT, WLSH, and TSX.

Now add the international index, and you pretty much see either a red or a reversal yearly candle while positive.  Therefore, 2016 is looking pretty gloomy indeed.  however we still have tomorrow so who knows right?  If I have time this weekend I will compile the yearly charts for the above markets for your viewing pleasure.

SEN: Bearish (Up-trending)

Tuesday, 29 December 2015

29 Dec 2015 - They Must Have Been Reading My Blog

So yesterday I said "unless there is a miracle of sorts and price rockets up out of nowhere. " ,
and what do you know, not only is there no significant news but also on light volume.  Well, technically we still have 1.5 days left of trading and anything can happen I suppose.

The SPX and the NASDAQ are the only one currently in positive territory for the year, with the RUT, NYSE, WLSH, and DJI in the red.  On a yearly basis, prices have now closed above the yearly Upper BB line.  I think a break of this should signal the start of the move lower for bears.  On a side note, the Market Sentiment is in a Bearish but up-trending mode right now.  So, it's probably better off to let the rest of the trading week play out and then assess the situation then.

SEN: Bearish (Up-Trending)

Monday, 28 December 2015

28 Dec 2015 - Closing Out The Year

Can the SPX close below the 200 day MA for the year?  Technically, with everyone still in holiday mode, it can go both ways.  Light volume can be manipulated to move one way, and I for one would not put it past MM's if they decide to close out the year on a somewhat positive not even if that is just a few pts. above the 2015 open.

With the ST being on the Up-trend, we should still look along that direction.  But do note that the chart below not only shows the highlighted 200 day MA (Red), it is also Highlighting previous supports which is now a resistance to our price.  Indeed we are looking for a yearly doji by the close of this week, unless there is a miracle of sorts and price rockets up out of nowhere.

SEN: Bearish

Thursday, 24 December 2015

24 Dec 2015 - Christmas Re-Eve-Iw

Nothing much to talk about the past few days other than the ST has shifted to an UP position yesterday.  I was a bit busy, so I was not able to post yesterday.  Today, there isn't really much to report either on the market as it is still in an upward trend with an intra-day that is OB.  Neither one of the past 3 swing moves have provided any clue as to the possible pattern forming as all 3 swings have been impulsive in nature.

The weekly chart is sporting a positive bar that contradicts last weeks bearish candle bar, but this time frame is still in a bearish course.  The weekly support if we fall back below 2040 is near the 1900 level.

EW patterns available here are;

Wave i-ii (From Sept Bottom)

Wave C (Still Forming with a possible LL target below Aug. lows with an extended price target of 1800)

Wave - c (Of a sideways Triangle forming an a-b-c-d-e to complete a 4th wave) This option could form for a few weeks or months before any breakout occurs.

A wave iii down is not out of the question since our sentiments are still bearish and patterns could allow for such a count, but with the ST staying in an upward direction, this count will have to wait a bit longer to confirm.  This pattern though should be taken seriously due to its accelerative tendencies.

SEN: Bearish
ST: UP (Dec 23rd)
PA:  UP (Dec 23rd)


Tuesday, 22 December 2015

22 Dec 2015 - Santa Is Trying

We are facing a rally into Christmas, but for market to even call it a success we would need to surpass the ATH made a few months back.  With the high probability that each day closer to Christmas we will be seeing lower vol. and this would make it difficult for price to perform a bullish miracle.

Current price is between the 200 and 75 day MA, but is hitting the 60 minute charts 75 moving avg.  We could still an extend rally tomorrow since we are still in OB in the intra-day.  Bulls need to watch the exit of this OB range to exit their longs.

SEN: Bearish

Monday, 21 December 2015

21 Dec 2015 - No Interest Day?

Seems like no one is interested in the markets, but prices seem to be setting up a corrective pattern here.  If I am correct, then we should see more downside coming.  Of course this is just pattern recognition.  But this analysis is also in sync with our ST signal which is much more reliable when both or more indicators are in agreement.  Intra-day is also still in bearish territory.

SEN: Bearish

Friday, 18 December 2015

18 Dec 2015 - Candle or Dynamite..

I don't really know where to start since this move the past few days is just too damn UGLY.  Not your normal kind of push down.  No... this one had a few implications, so lets just list it in point form.

- 5 waves down from FED high.
- Below 200 day MA
- OS in intra-day closing meaning a possible acceleration risk to downside by Sunday futures or Monday open.
- Weekly closing candle bar look like the picture above, with price under 75 and 20 week MA.
- ST turned down

Aside from being technically bearish, investors do not look too confident about the rate hike.  I can guess with financial institutions quick in raising interest rates themselves as well, that things will just get worse unless someone intervenes or provides better options.

My Bearish Sentiment Indicator will definitely have pushed further away from crossing over to bullish.  This keeps us gloomy for the longer time frame.  So I will not waste your time with reading and just show you ugly pictures.

SEN: Bearish

It's not to say we could not rally or turn bullish, and I think next week should see some pressure alleviated and should rally.  But in all honesty, it's not looking good.

This last chart has not updated its weekly results but you should see the signal push lower and away from the 50 keeping things in bearishness.  The signal for a few weeks was very close to turning bullish as can also be seen in the price movements in the SPX.  All in all I still remain bearish.

Thursday, 17 December 2015

17 Dec 2015 - Hangover

Can we say that the market had a sudden hangover from yesterdays FED celebration?  Well still too early to say since ST is still pointing UP.  However, the impulsiveness could just be causing the signal to lag.

The intra-day session is back below the 200 day MA, and this whipsaws can be expected after such an announcement.  I would be foolish to believe that this whipsaw or impulsive manner in price is over.  So lets check to see if this sudden move up the past few days is a new count upwards or just part of another count of an a-b-c up.

SEN: Bearish

Note: As I update this blog, the ES has pushed lower into OS territory, therefore the key here is the Monday low that needs to hold for bulls or break for bears.

Wednesday, 16 December 2015

16 Dec 2015 - Lit-Er-Rally

Prices are taking off as per FED.  Question now is.. Actually a few questions now is;

1. What will China and EMs do.
2. What are price rally really saying? Getting out or getting in...
3. Who will be stuck with the Trillion dollar collection bill? As per ZH.

No reversal daily candle, ST in the UP position with no negative bias.  This might take a few days to take in, but as the market is suggesting everything is rosy, and top that off with a closing above the 200 day MA.  So today, we should not fight this sentiment.

SEN: Bearish

Tuesday, 15 December 2015

15 Dec 2015 - FED er Rally..

No one knows what will happen tomorrow, but one thing is for sure.. Nail biter till Yellen opens her mouth.  ST turned up today, so it suggest a up market, yet we are still in a bearish range so we should be flexible for tomorrows possible whipsaws.  There will be whipsaws, so for those who can't take the moves, I suggest staying on the sidelines till it settles down.

Prices for the SPX is still under the 200 day MA.  so there are negative connotations to the current ST.  All EW counts or forecasting would be foolish as raising rates and holding rates will have the same risk probability.

SEN: Bearish

The indicators above are not in SYNC making the analysis for tomorrow a confirmed hard tell in direction.

Monday, 14 December 2015

14 Dec 2015 - Bullish Again?

Bullish Again? It will have to depend on your time-frame to see if your trading sentiment is bullish or not.  So never follow others into thinking the same while your setup might throw a different analysis.

Last night the ES charts was indicating that prices are looking to push lower and I tweeted it out saying that the risk of a downside still exists.

This morning prices made lower lows from Friday's low.  The rest of the day pretty much went sideways and by 2:50 pm prices started to signal bullish.  The rally was impressive by days close, however the hourly charts are still bearish, with prices just touching below the Mid-Nov. lows which is also the 75 day MA.  This could be just back-testing with what looks like a 5 min. 3 wave corrective rally.  Things can change, so I will have to see if there anything significant to tweet tonight while futures chug on.

The SPX has extended its price move lower negating the a=c relation, but it might just be a throw-under.  The spike low though came as a support by the 50% retracement near 1993.40.  The 2000 level is now a psychological support.  Question now is if markets will push prices through this level and weaken markets into FED speak day.  The other support to look for if price breaks down would be at 1964.60 which is the 61.8% ret.  If you are still short and your indicators are still flashing a bearish sign then this is the level to watch.

SEN: Bearish

Saturday, 12 December 2015

12 Dec 2015 - Similar Warning From August

Back in Aug. 21st, just the weekend before the Aug. 24 drop in the markets I wrote;

"Does this look like a Bullish chart?  I don't claim a crash is coming, but what I do know is we are at risk of one. or a very nasty slide. With my market sentiment in Bear Mode"

But the descent actually started 3 days before this freefall.  We are looking at similar situation now with indicators for the daily chart in OS condition with a weekly close in bearish position.  Longer-term, this bearishness should last weeks to months based on my theory.  But again as discussed yesterday, the bearishness needs to overcome the FEDs actions and stay bearish or this weekly signal will become an anomaly.

The possibility of this accelerative move coming might even surpass the lows made in August.  This is the point where I would encourage everyone who follow EW to put aside the pattern counts and read what the indicators are telling us.  Due to our bearish market sentiment along with a downward signal in our ST and PA, we can see that the risk is to the downside.  Therefore, we must plan for this event regardless if it happens or not.  So again, like the statement I made back on Aug. 21st.  "I am not claiming a crash, but there is a risk of one."

Friday, 11 December 2015

11 Dec 2015 - Time And Time Again...

Days like these should feel good for those who know what clues to look for prior to the move.  There are days where nothing shows up on the radar or is hard to find any good signs of a market direction.  Yesterday however, I mentioned that a turn is likely based on the intra-day charts bearish sentiments.  A target of 2020 - 2010 was my ideal level and today we not only closed in this range, but we also touched the lower end of that target.

Surpassing the Mid-Nov. lows will nullify the triangle count, but this does not mean that a bearish guarantee is at hand.  This could just be a C-wave correction, so we should watch what happens next week.

Apart from the above analysis though, the weekly has closed on a bearish momentum and this will now allow the markets to draw down for a few weeks or months.  Easier said than done when we come up to a FED possibility of raising rates.  Usually the weekly signals "should" indicate longer term sentiments, but in this case the signal could be false or turn up quickly.  So let us see what happens with the FED decision to raise or not raise.  I will be looking at the prior day before FED speak to see if there are any clues as to the direction regardless the outcome.

SEN: Bearish
PA: DOWN (Pls. see notes for Dec 9th of why this signal matters)

Note: Conditions are still OS so short position can be held over the weekend.

Thursday, 10 December 2015

10 Dec 2015 - Itching

There are good reasons why my fingers are itching to just trade something, but this sideways market has been a true test to patience.  I believe soon enough that this market will resolve this consolidation, and it is no surprise that the proving ground here is the 200 day MA.  The negative divergence I mentioned yesterday is still in play in the intra-day charts even with the reversal at the end of the day.  Can we still test the 2020 or 2010 level?  The intra-day chart is leaning for a downside bias based on today's close so lets keep this in mind and plan for that scenario tomorrow.

SEN: Bearish

Wednesday, 9 December 2015

9 Dec 2015 - Broken Triangle

The near term triangle has been weakened but still remains above the mid-November lows.  Although this still looks like a triangle or wedge, the price pattern however is producing a much complex count.  Right or wrong, one thing is clear...  ST is still favouring the downside action.  With the intra-day trend being bearish with only a neg. divergence present, the case for price to break down out of the triangle is strong.  It could be that prices are targeting the 2020 - 2010 area, and this would alter the count to finish of a corrective move that started in early Nov.

SEN: Bearish

Note: The PA is flashing a downside risk for acceleration and if this holds true tomorrow, it would most likely negate the negative divergence present or active in the 60 min. chart.  So be aware of this in case it unfolds.

Tuesday, 8 December 2015

8 Dec 2015 - Corrective Patterns Abound

The price move today fits with our ii-wave count or a continuing pattern that would finish a d-wave.  Perhaps these indecisive formations is a prelude to a bullish rate hike sentiment.  At least this is what it's looking out to be.  But we should also be reminded that an E-wave could end this rally without making an new all time high.  This would make it a very bearish setup and outcome.  Of course this is still a ways away and it's pointless to think too far.

The price closed below the 200 day MA today even with the rally we had from today's low.  The ST is suggesting that trend is still down.  If this is true then the 3 wave formation we are seeing is not really a 3 wave formation and that more extensions should be added tomorrow.  So far though, the triangle theory is holding up against our ST.

SEN: Bearish

Monday, 7 December 2015

7 Dec 2015 - Triangle-ish...

Although the pattern is not complete, we can look to the possibility of a triangulated pattern that would label the count a 4th or B wave.  A 4th wave scenario will have prices eventually breaking the early Nov. highs and increases the chance of another ATH.

Currently the ST is pointing down.  The signal has not changed from the impulsive move up last Friday due to the reversal today, but if prices in the intra-day stays positive tomorrow, chances are high that the ST will turn UP as well, while a negative daily outcome leaves the ST in bearish mode.

SEN: Bearish

Note: The distance of price from the the highs on the NYA, or RUT are disconcerting.  A failure to make an ATH in the main index is possible or with an ATH in place a divergence could be the signal to trigger a CIT.

Friday, 4 December 2015

4 Dec 2015 - Reversal Of Fortune

Markets rally, but are the jobs numbers believable? Today's move shows exactly what you believe to be true does not reflect the sentiments of the market.  You are a grain of sand in a sandbox, and the collective needs to be in sync with your views for your trades to work.  This is why I prefer to just follow the indicator to show me where the major sentiments are.  Following the herd is not a negative, just don't follow them off the cliff or to the slaughter house.

The triangle pattern I drew last night still looks good, but the impulsive move today will give us some doubt due to the fact that triangular patterns are usually a sideways affair.  A possible 4th wave low could already be in, but we also have numerous options that could still play out that puts price lower.

We can see a bullish view on a weekly basis supported by the 75 weekly MA (2040).  This level needs to break and prices need to stay below this for a longer term bearish look.  I will look again to our market sentiment this weekend to see if we are possibly crossing into a bullish market or just retesting that bullish range.

SEN: Bearish (Risk of turning bullish)
ST: DOWN (Impulsive move today will cause ST signal to lag.)
PA: UP ( From Down 2 days ago to Up just today alone, volatility does not disappoint).

Thursday, 3 December 2015

3 Dec 2015 - Never AssUme

Back in Sept. we saw exactly what we are seeing now.  Although we cannot rule out a higher high, we cannot assume that we will make one either.  The best way is to follow your indicator.

The SPX is making a case for more movement lower as of today.  Things can change from day to day so you need to be always on your toes for when that shift happens.  Stick to as little indicator you should use and to one time-frame as to not get confused.  I always think of it as cutting wood.  There are many ways to do it, and they can be fast or slow.  It's all on your preference.  But the main point of this example though, is that you cannot use both at the same time unless you are aware or conditioned to do it accurately and precisely.

The intra-day chart is now showing that prices have broken the wedge support as well as the 200 day MA.  This was the situation we were waiting for to happen, and clearly it broke to the downside.  The negative divergence on the 60 min. was successful in alerting us to a possible downturn.  However, the divergence on the daily chart has not materialized and might not materialize as seen below on the daily chart.

SEN: Bearish

Note: For those still looking for a higher high in the SPX or market, the triangle option below that is newly drawn could potentially happen but we would need the signals to confirm these moves.  If we stay oversold tomorrow we could see this nullified.

Wednesday, 2 December 2015

2 Dec 2015 - Price Finds Support Even With Tragedy

The hourly wedge that has been forming since the flash crash is still showing as support that price is acknowledging.  As with France the day or weekend after, most traders expected a drop in the market, but the reality was far from expectations and markets rallied.  Will we see the same thing play out here tomorrow?

Perhaps...  But in the meantime the 60 min. divergence mentioned yesterday seems to have reversed price today, or we can just call it a coincidence.  There is however another possible negative divergence that we need to watch, and that is in the daily chart.  This will only become one if prices exceed the early Nov. highs while momentum stays relatively weak.  Of course this would assume price would rally in the near term.  This scenario might not happen at all and the indicators will be the only one to follow to be on the right side of the trade.

The SPX is still holding major 200 day supports as well as the pattern mentioned above.

SEN: Bearish

RESULT: Bullish in a bearish market...

Tuesday, 1 December 2015

1 Dec 2015 - Negative Divergence Active

The negative divergence is now active in the 60 min. chart due to price moving above the Nov. 20 high.  Prices is in OB territory and can have the potential to accelerate up, so those short should be aware of this signal.  My Gann angle has also been breached to the upside.  What was once a resistance should now act as support.

SEN: Bearish