30 Oct 2015 - Good Start For Bears

Can I call a top here?  Well... not really, but it is a good start with the intra-day signal falling into bearish territory.  The best way to confirm this is if we can get out of the OB situation that the ST is in and maintain a bearish stance on the intra-day signals.  Sounds confusing? It gets easier once you start practicing this way of analysis on a daily basis.

The bigger picture lies in the Monthly chart since it has closed today.  I have to say that it does look like a compelling argument for a bull market, but the signals are still open to the downside and anything can happen in Nov. to change the bullish stance.  So we should try to keep within last months range for a bullish sentiment or fall below it for a bearish sentiment.  What I just said here is that its pretty much a do or die for bears or the bulls regain control of the market.

The start of a new month and week next trading session will need to show us its intentions...

SEN: Bearish (On Verge Of Turning Bullish)
ST: UP
PA: UP

Note: If this is a W2, then it is definitely performing its role as advertised..

EWI - " Wave two corrects wave one, but can never extend beyond the starting point of wave one. Typically, the news is still bad (Good in this case). As prices retest the prior low (Highs in this case), bearish sentiment (Bullish in this case) quickly builds, and "the crowd" haughtily reminds all that the bear market (Bull in this case) is still deeply ensconced. Still, some positive (Negative in this case) signs appear for those who are looking."

29 Oct 2015 - FED Hangover

After the rush to buy up the market yesterday after the FED Speak, things this morning started and ended pretty much flat.  The SPX did make a push above yesterdays high, but it wasn't big enough to warrant any attention.  As I have said the past few days, I am expecting a turn-a-round soon, but will look to the indicators to confirm that we have indeed reversed the current trend.

SEN: Bearish
ST: UP
PA: UP

Overall the market is OB and bullish, suggesting that any risk of impulsive or runaway moves are to the upside.  This however can change once you can confirm with your individual time frame that you use.

28 Oct 2015 - My Sentiments Exactly

My sentiment for a push higher has been met.  Now is the time for the index to show its hand, and see if it will go my way yet again, but this time to the downside.  Divergence since early October has not done much on reversing prices and this just goes to show that divergence alone cannot be relied upon.  Just like OB situations does not mean it is time to go the other way.  Often times it just means stay the course.  But coupled with an indicator that shares the same sentiment a high probability outcome is the best strategy to trade the market or issue.

I will be looking for a sustained OS presence in the intra-day charts to see a sustained move lower and a CIT.  At this point I have not seen such a formation and still see and short-term bullish market.  This raises the odds that the SENtiment signal is at risk of turning bullish.

SEN: Bearish
ST: UP
PA: UP

27 Oct 2015 - Some Movement But Not Enough

The SPX could not get below the 200 day MA as it tagged it.  This has now become the support zone and we are still OB which can be risky for bears to short at this point in time.   There is still a better chance of the CIT happening in Nov. but cannot rule out an early CIT based on any signals our indicators gives us.

In EW counts, I'm looking for another rise to possibly complete a 5 wave pattern of a C-Wave for a potential ending B-Wave primary or a 2nd wave primary.  Both of which has an impulsive wave to follow to the downside if the count is correct.

SEN: Bearish
ST: UP
PA: NA

26 Oct 2015 - OB In The 60... How long Can It Go?

Price have paused for the opening week, and the acceleration up that started last Thursday seems to still be in play.  The intra-day chart is still showing an OB reading and could still push prices higher.  Of course this is based on the index, and most of the equities out there have a differing setup, therefore look to the intra-day charts of the issues you are trading to see where the trend is currently taking you.  As much as the equities follows the market, they do have their own rhythm and cycles,  In general to make analysis easier we use the SPX as a state of the market sentiment.

The pattern that has formed today suggest price still moving up before a move lower starts.

SEN: Bearish
ST: UP
PA:  NA

23 Oct 2015 - I Can't Believe Its Not Butter

Price slices and dices and spreads the Moving Day averages like it was butter.  WoW...  So Should be be Bullish?  Unfortunately, my indicators still states bearish and prices can seem bullish and it could also well be a bullish formation, but while the signal says bearish it is imperative to stick with the signal with conviction.  If the signal does turn bullish, that is when we will turn bullish as well.

Second waves can have this feeling of angst as discussed on previous blogs.  In fact, they can retrace all the way up near the start of the decline.  This is why even though we are bearish, any ST signal that is against the trend should be the trigger for the exit of a position, and only re-enter when it is back in SYNC.   The other day I mentioned that as long as our intra-day indicators is out of the OS range that a bullish sign still exists.  This is still the case and being OB just increases the chance of an impulsive move to the upside.  Perhaps it would end soon, but we need a confirmation as always.

This price move since early Oct. is very impressive, but remember that moves like these are more common to the main trend, so that would be the bigger picture.  While it is great or even gratifying to make profits such as this, a reversal would certainly clean up all that profit.  Open a chart and see for yourself.

SEN: Bearish
ST: UP
PA: UP

NOTE:  For those who think this has been a 4th wave all-along,  well sorry to break it to you but that has been nullified.  This is why we cannot get married to a count, and be open to the other possibilities.

22 Oct 2015 - Higher High, Was It A Surprise?

The blog yesterday mentioned a possible move higher for prices in spite of our bearish stance.  Today the SPX is on the verge of tagging the 200 day MA.  The futures market has already hit its 200 day MA.  So now the question is if we see a reaction to this line and reverse or pierce through above it.  There is no doubt that the ST has been right and bullish since the lows made in early Oct.

The evidence in our analysis in which we still remain bullish "ST" is the fact that our intra-day signals have a hard time staying in bearish territory and out of the OS range.  When prices are weak, signals tend to overstay their welcome, and in this case it rather stay out.  So perhaps we will see this push till Nov.

SEN: Bearish
ST: UP
PA: UP

21 Oct 2015 - Still Within Range

We are still within the corrective range on at intra-day basis, but the ES has gone bearish at this point, so tomorrows open session could tell us if there is a continued down pressure in the markets.  Support in the short term seems to suggest around 2010 area in the SPX.  Be aware of the 3rd wave count to the downside as this is a possibility that could accelerate prices.  For now though the indicators do not seem to suggest that it has started.  If our intra-day signal tomorrow does enter the OS condition it will have a risk of more accelerative momentum.

As we prepare for the downside, an option of a diagonal triangle could be forming and could push the CIT date into Nov.  So just be prepared for all scenarios.  I am still bearish so any trade for me is only to the downside.

SEN: Bearish
ST: UP
PA: NA

20 Oct 2015 - Steady As She Goes?

Looks like we are hitting a brick wall with prices sticking to these range the past few trading days. I do not know if there is enough momentum to push prices higher, but I have been proven wrong before.  We are still in OB territory so we cannot count any move up out of the question.  What we do need is for the intra-day signals to tell us if we are in a sell or buy risk.  Right now, that answer is 50/50.  So if you are bearish, I would wait for more confirmation, while a bullish stance would keep my eyes on any sell signal to get out of any long positions.

As I said before, the patterns and cycles are already in its late stages or have passed, so we should see some results soon.  Short term support lie just above 2009 SPX pts.  But an impulsive move down could just pierce through this and push down hard.

SEN: Bearish
ST: UP
PA: NA

19 Oct 2015 - Soon or Swoon

With prices reluctant to go anywhere, you can be sure that it sees the 200 day MA just above it with a 75 day MA supporting it.  It will have a decision to make and it could be a swoon for the bears.  With negative divergence in the intra-day level along with OB, and wedging formations the turn around is near.  The question is, what will the push down look like and how strong can it be.

SEN: Bearish
ST: UP
PA: NA

16 Oct 2015 - A Possible High

With prices moving up today, the SPX could have put in a possible high.  Although the 200 day MA is still a high possibility target, we should see or have our answers next week.  These patterns showing drawing out the past few months is making me doubt a rally to new highs, but as I have said before, the indicators is the final judge of the markets.  So far the divergence on the intra-day indicators that I have been watching has been at it since Oct. 5th.

We are also clearly above the 75 day MA which we need to see in the next few day close below for a more bearish stance.  So far we have been above it for 2 days.  The longer term indicator still is flashing a bearish sign, and will be trading based on this to the downside with any rally taking place.  Wave-2 feels exactly like this where people are unsure of a bear market while bulls are adamant that new highs are still to come, and that bears will get slaughtered.

Regardless of which side you are on, I believe the answer will come soon.. and it could be as early as next week.

SEN: Bearish
ST: UP
PA: NA

Note:  The Daily chart has now formed a neg. divergence while in OB.  This would be the trigger I would need once that signal exits the OB range.

I also found the chart below interesting, in that a rally has occurred prior to the Options expiring followed by a draw down.  This chart was taken from ZeroHedge.com.  So the question is, are we going to follow the past trends?

15 Oct 2015 - Don't Be Too Quick

Yesterday I mentioned that both the Daily/Weekly 75MA and the 60min 75MA were sandwiching prices and that we needed a break of the 60min 75MA to have a more bearish stance.  This was not confirmed and as a result we had that rally.  Also add to that an ST that was still in the UP trend, and OB.

I would more likely look to the 200 day MA now as the target of price if we cannot hold below the 75 day MA.

SEN: Bearish
ST: UP
PA: UP

14 Oct 2015 - Stuck Between Two 75MA

As discussed in previous post, the 75MA on the weekly and the daily has proven a strong resistance for price in the SPX.  Today however, we have a 75MA in the 60min chart that looks to support prices.  This would need to break for bears to have a sustained move lower.

The futures is in an acceleration mode, and this means that a high risk of impulsive move lower.

SEN: Bearish
ST: UP
PA: NA

13 Oct 2015 - Stalled?

The 75 day MA is proving to be a force with prices hitting it and then pulls back.  This is not the first time it has supported or resisted price, but no one seems to think of the 75 as an important MA.  We are still currently OB, and until we move out of this range we cannot say for certain that we have already turned or have a CIT.  If the C-Wave is indeed the count here then expect an impulsive move lower to validate the count.  A corrective movement would suggest that we still have not triggered a CIT.

The Gann angle is again the support level on our daily chart and this needs to be broken decisively on the coming move lower as it revisits it for the 4th time.  In the case that the 2nd wave is at hand, be aware that the move lower will be significant and devastating and a feel of a crash event that will make the Aug drop seem like a slow motion move down.  But let us use the ST as our initial signal to start any short position.

SEN: Bearish
ST: UP
PA: NA

9 Oct 2015 - Reluctance

Market is reluctant to move higher and just as reluctant to move lower.  Divergence in intra-day chart seems to suggest that we should see a down turn, but a sustained push lower would still need to be determined.  Perhaps Monday would see prices finally move.  The weekly chart is still showing that 2023 as the lined resistance made by the 75 wkly MA.  This resistance line is also being confirmed and converged by the daily 75MA.  This in theory should provide a good stopping point.

SEN: Bearish
ST: UP
PA: NA

8 Oct 2015 - Word Of The Day " Can't See"

So apparently the FED can't see raising the rates this year.  Markets proceeded to ramp higher.  Everything seems to be good looking through rose coloured glasses.  So with this we should be bullish right?  Well our ST has been bullish for a while now and with today's abrupt move higher, we have a potential for a complete 5 waves.  I was looking for a 3 wave pattern but overall the 2nd wave target that pushes price higher still exists, if it is a 2nd wave.  On top of this analysis, we have also a neg. divergence occurring in the intra-day charts.  I will watch to see if this signal does trigger a reversal down with the indicators moving into OS.  Confirmation is key to all of this or else things are just basically guess work.

At this point, I do not see why prices would not revisit the 200 day MA.  This however poses a series of question of whether price will move straight to 200 day MA target or pause (correction) before resuming a move up (making a 3 wave pattern).  Unfortunately, its always a wait and see in the end when everything has formed before you can confirm and in some cases it would be too late for many.

SEN: Bearish
ST: UP
PA: NA

7 Oct 2015 - A=C Reached

The A=C target I had pinned as a possibility has been reached and had a the SPX in the red today.  I would look for at least the ST to turn down before any initial short play.  This move could also still be a sub-wave of an a-wave of C so we should keep that in mind.  EW can always sub-divide which is the tricky part of this analysis, but one that which most technician tend to end as fast as it starts to form.

The intra-day charts are also still bullish, therefore we should look for an OS condition for things to turn around for bears.

SEN: Bearish
ST: UP
PA: NA

6 Oct 2015 - Timid Tuesday

I can't believe I am in the condition of saying that a 7 pt drop on the SPX is timid or bland at best.  I guess it's all because I have gotten use to double digit volatility.  The EW A=C target I was looking for is around the 1999 level and prices are responding to this by pulling back from earlier this morning.  The SPX might still get another chance tomorrow to try for that level in which I would label it a C-wave subwave of either a 4th or a 2nd.  The latter would be much more bearish of course.  With this C-wave, I am expecting a 3 wave structure instead of a 5 wave impulse due to the fact that since the lows made in late Aug. prices have been sporting a 3 wave pattern as it oscillates sideways.

Indicators are still not in SYNC and trading a move like we had the past few days might seem like a great idea, but the abrupt surprise to the downside could be just as devastating.  I am not a bearish person in nature, but knowing how the economy is and what our sentiment has been telling us, it is better to err on the side of caution and let the double digit rally run and just wait for a good setup that goes with the trend.

SEN: Bearish
ST: UP
PA: NA

5 Oct 2015 - Nearing A=C Target

The price move in recent days are consistent of an impulsive wave in a C-wave move.  This is the best EW count that has the highest probability outlook on a bearish stance.  If indeed this is a C-wave count of a possible 2nd wave structure, there there is a possibility of prices trying to test the old highs.  This is the EW rule, therefore we should keep our minds open to this possibility as well.

Sentiments remain bearish, with an ST still in an UP trend..  This indicates that it is currently not the best time to trade.  We should be patient for a SYNC in the indicators to avoid any abrupt surprises.

SEN: Bearish
ST: UP
PA: UP

2 Oct 2015 - Erratic

Prices were up and down or the other way around, but it doesn't matter.  The fact here is that we should distinguish the difference in volatility from erratic behavior.  The only time I see reversals to green from red or visa-versa was when markets were melting down during the 2000 and 2008 crisis.

Perhaps this is nothing to be surprised about as the EW model drawn yesterday was looking at possible C-wave move higher or a (ii)-wave that would stop short of the highs made on Sept 25th.  But this latter is at risk of being nullified if we push above 1953 next week.

The ST is still in an UP trend and prices have now broken above both the 75ma and 200ma of the 60min chart.  1990 looks to be a logical stop, but that is just guess work.  2000 SPX would be a target that would make an A=C confirmation.  Based on the past pattern from the Aug. low, they can be counted as 3 wave corrective patterns and this C wave should not be any different.  So while we dabble on EW forms, we should always remember that there are more options out there that can still be considered valid.  We could even retest the 200 day MA.

Since the sentiment is bearish I will treat the price action as corrective up trend until the sentiment changes.

SEN: Bearish
ST: UP
PA: UP

1 Oct 2015 - New Month Optimism?

Futures rose last night, even when data on the other side of the world was horrible.  Is the "Bad news is good news" back again?  Volatility is definitely coming back and we should be careful how it heads into the next coming days.  Up or down, we must be open to any possibilities.  The markets have flipped red to green today with quick impulsive moves making it hard to tell what type of patterns are forming.

Nonetheless, prices still remain under the Gann Angle that I have previously drawn on my daily chart.  The ST has changed to UP so our sentiments at the moment are not agreeing with each other.  This means that it is better to wait it out and see the next SNYC in these indicators.  Prices also remain under the 60min charts 75 MA.  This keeps things a bit bearish at the least.

SEN: Bearish
ST: DOWN
PA: NA