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


Friday, 1 July 2016

1 Jul 2016 - EOD, EOW, Happy Canada Day..

Markets rise, most stocks don't.  The Weekly bar has engulfed all the bars the past 14 weeks.  This should paint a picture of how bullish this week was.  On a Monthly scale the top BB line is at 2169 and if signals are looking to diverge, I would say that this is the perfect time to make a new high beating out last years May High.  Nothing in the Monthly chart suggests a reversal down with price bars ending positive the last 4 consecutive months, and signals at OB, Diverging (Only if price makes a new ATH).  A conundrum for the Bears for sure.  The best view on EW here would be that the SPX cash chart is producing a last ditch effort for a 5th wave of some kind of a subwave 3.  What this means is that there will be a "correction".  There also should be another move to a "Newer ATH".  Sounds surprising with all these economic and geopolitical woes doesn't it?  I can't explain it, but it's what the patterns are telling me could happen.  The only way I can explain the markets going up is if the equity markets are being used as safe havens from gov't or possible currency instability.

Either way, there will be a lot of people who will not see this coming.  If we count the year 2010 lows around SPX 1000 and count 2169 SPX as the high for a complete wave-3 (green).  Then the Fib. results we get are:

38.2% at 1718 SPX range
50% at 1580 SPX range (ALSO THE LAST TWO TOPS 2000 & 2007)
61.8% at 1445 range

These are the levels I would watch for a wave-4 to end before making a trek to ATH.  Possibly to 2646 SPX as the last and final leg of a wave-5 (Green) which is also 100% of wave-1 (green).

Note: Notice the 2 Moving Averages that I watch which is also converging with the range given by the Fib. levels of Wave 2-3 (Green).

SEN: Bullish

Don't hold your breath for a crash yet as price, signals, patterns are all looking bullish.  There are no clues as of this moment to suggest a reversal will take place.  That said, it does not also mean it can't happen.  Watch the indicators...

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