10 Dec 2012

Markets seemed weak today.  We failed to make a new high on the SPX and put it a doji on the daily bar.  It has sat under the 75MA for 2 consecutive days now and the longer it sits there the more chance it has of reversing.  Although we don't have a divergence I would allow for that possibility with a chance for a turn tomorrow to the downside.

7 Dec 2012

We got our move up today and very swift.  Unfortunately we did not get our reversal daily candle. But not to worry as we have a corrective pattern from todays 11am low from SPX.  We also retraced above a FIB ratio of 61.8% at 76.4% which is pretty deep and we can consider it a wave B or wave 2.  A diagonal 5th wave for a C wave cannot be ruled out.  But I am expecting a pull back next week as we have been overbought for quite some time now.

The chart below is just a possible route the price might take over the next few days if our wave count is right.  Either way an overbought situation (daily) needs to be relieved before any resumption higher.

6 Dec 2012

Movement today continued its run higher and SPX time frames and respective Stochastics are all in the overbought range.  A push up is what we expect for tomorrow to finally end the uptrend and push down hopefully before EOD and EOW.  This should produce a nice reversal candle and a nice divergence to signal a down-trend that should last a few weeks or maybe even start its plunge phase.  EW'rs are looking for a move lower in an impulsive manner (wave 3).  What I know is that on a daily basis, we are at overbought and should turn down.  The weekly SPX also shows sign of weakness as a separate indicator that I have says its still bearish.

NOTE: The Daily trend to this date has lasted 15 days.  That's half a month or 2 weeks worth of trend.  Knowing your trend can surely ease the process of trading.  As I have said before when the daily starts its trend it will last days to weeks.

5 Dec 2012

Markets rallied which we wanted or expected based on our Stoch.  We have finally got an alignment on our Daily, 60min, 15min charts.  They are all in overbought but we should still look for a bit more of a move up before we turn down.  This should allow for daily Stoch to diverge.

4 Dec 2012

Markets failed to rally today and most of the Stochastic indicators are not in sync with each other.  Therefore we should just stand back and let it clear up for tomorrow.  Although I do have a scenario in mind.

Option 1:  Tomorrows overbought 15min SPX should relieve it self by pushing down maybe to surpass todays low which will give a divergence to price and indicator.  This should help push the oversold 60min Stochastics up finally and eventually join the SPX daily at overbought.  Once this is achieved a clue will lie in the price breaking the Dec. 3 high or settling below it with a 3 wave EW pattern visible.

Option 2: Rally tomorrow to make 3 wave move to finish off the 2nd wave which would keep 15 at overbought yet push the 60min to the overbought direction. By this time the Daily would be ready to turn down bearish.

Our weekly trend is up but using our daily as our main trend at overbought and turning down.  We should expect any move up to be temporary and a downward trend to be our primary move which should resolve the weekly back to the downside.

3 Dec 2012

Markets managed to retrace the bullishness the past few trading sessions.  We do have a 60min oversold condition for the SPX and we can assume its the same for most indexes as well.  So we will be looking for a more push up since the daily charts stochastics is still in overbought.  Note that we have made a cross down on the SPX daily Stoch. and can continue lower.  Therefore do not attempt to play any long side just yet.

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