19 Apr 2013

We are going to pretend that April 11 in the SPX is the top and based on our first move from that top, we have a good impulsive pattern, and not the more overlapping type that happened on the SPX during Mid to End of March.  So based on our long-term and short-term trends, we can be safe to call a current down-trend.

I am keeping this simple by concentrating on our trend instead of giving different options.  Therefore if our trend changes to the upside then we will call it and go with that trend.  Often times, people read these financial blogs and try to figure out what it is really we are trying to convey.  Of course we would like you to do your own research and compare our findings with yours.  We have differing strategies so please elaborate more on how you can use our analysis in your trading.

So far our results this end of week has been:

Mid-Term: Down
Short-Term: Down

The chart below is the 60min chart of the SPX, and its showing an overbought Stoch.  Therefore a short can be placed once the Stoch. has crossed to the downside, diverged, or has come out of the overbought position.  Also check to make sure that both your Mid-term and your Short-term are also on the same down trend.  You will notice that most strong moves will happen when both or all three trends are aligned.  Use this with your analysis and your cycles or even your EW to better understand which side of the risk your on.