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


Friday, 24 June 2016

24 Jun 2016 - EOD, EOW

All about the exit,  the Brexit sure made a big hype in the markets.  Now we have the WExit (Week Exit).  So what does it look like on a weekly bar? Very red, and very long...  The bar has pierced the 75 week MA at 2044.98.  The possibility of a test from the underside is always possible so watch to see if it becomes a significant resistance next week.  The next level down is 1855, the 200 week MA.
The indicators the past few days we were looking at won out again.  If you guys have not seen the proof over and over again from past posts, the indicators winning ratios are very very strong.  All it takes is the belief in the signals, and recognizing mass trader sentiment through the indicator.  What are their long term views through indicator.  What are their intra-day views through indicator.  Once you master these.  The whole technical analysis will greatly improve and will be easier to understand.

Our ST the past few days signalled an UP trend, but we already know that the sentiment is bullish but currently down-trending, meaning that if you are playing the long-term UP trend that the trend is not in SYNC and this is the phase to stay out if you are playing the long side.

Since the ST is DOWN today, and SEN is bullish with a down-trend, we can see that strength is favouring downside bias.  This can be cascaded down to smaller time frames, but for the sake of simplifying the analysis, it is best to concentrate on just 1 or 2 time-frames.  What one time-frame indicator does affects the other time-frames indicator.  You just have to figure out who is following who.  This same theory or process is how we found that the rally the past few days had a risk of a trap both in index and currency pair.  While I did not know how severe the push lower in this event would be, this is up to the individual to assess the risk they are willing to take, and unfortunately human emotions and logic still need to be used.

The Mid-May low is key in identifying or eliminating a wave-c of 2 for a 3rd wave higher if markets are moving to new highs.  A break of this will confirm that this is not the case, and that probably a bigger correction is in place or the new trend has taken over.  Ultimately the lows in Feb. of this year is the same scenario in which prices can be labelled corrective until such time this low is broken.  Even an impulsive move lower can be a 5 wave down and still be considered corrective instead of motive.  This is why wave-3 in red is labelled at the lower-right corner.  Only until we break 1810 can the wave-3 red possibility increase.

SEN: Bullish (Down-Trending)

Based on where price ended today, it seems not to be surrounded by support levels or MA suggesting that lower prices can still progress as seen currently in after hours ES chart.  At this time I am inclined to see prices push to the 200 day MA.

No comments:

Post a Comment