PERTINENT DATES

Anyone looking at reactionary dates here could use these as confirmations as to what could cause the move.

Courtesy of Zero Hedge:

30 Sept 2013

The acceleration today was better than last weeks attempt, but prices still managed to try to fill the gap.  On an EW perspective that is a pretty deep retrace.  By the end of the day SPX managed to stay between the range of the day.  Breaking down the patterns from morning to the end of day, we can see that prices were moving in a corrective manner.  We can possibly start the day or be in a positive day tomorrow.  But bare in mind that we are corrective so prices should still work themselves lower.

Our Main-Trend has changed direction and like we discussed last week.  The Short-Term has managed to manipulate the Main-Trend to the downside.  But it is not confirmed as yet so we shall wait till end of the week.

Main-Trend: DOWN (Unconfirmed)
Short-Term: DOWN

On a 60min chart, you can see that the price is hugging one of our angles and gap open on the upper trending angle. Pretty precise of a intersection if you ask me.

27 Sept 2013

The move down this morning was not the acceleration I was looking for.  The patterns still looks like its in a corrective process and more downside should be expected. Our trends have not changed at all this week and the short term still has not manipulated the Main-trend in turning down.  We shall see next week what happens.

Main-Trend: UP
Short-Term: DOWN

YRLY TO DATE

Here is a possible wave count that has me thinking of a possible acceleration downward for price...

26 Sept 2013

The patterns forming lately has been corrective and EW works well to tell us that whatever is happening is a consolidating pattern that will continue lower in the days or weeks to come. 3 waves followed by 3 waves that overlap.  This is a good setup for the bears, and how far it will go will depend on the indicators. 

The EW pattern suggest the end of day impulse up would be a wave C of some sort.  Whether that is done can be seen in tomorrows price action.  I would like to label this ending pattern as a 2, but it is not important right now.  The important thing is to set up for a short position.

I am expecting an acceleration of some sort, and tomorrow is a time fib of 34 based on the May 22 high.  So lets see if markets will react and acceleration is what we see.

Main-Trend: UP
Short-Term: DOWN

Note: Our intra-day signal is in an upward trend and could indicate that the impulse from todays end of day run up is not done.

25 Sept 2013

Markets were weak today as evidence that price could not even sustain a morning rally. By 12 noon prices dropped and was weaker than even the financial index.  Be careful as an acceleration down might be possible.  Our intra-day signals have been diverging for days but prices are just too weak and an eventual collapse of the momentum could ensue.

So far our indicator is on a short term down trend and we are waiting to see if the Main-trend can be manipulated to the downside to get a stronger conviction to this current run down.

Main-Trend: UP
Short-Term: DOWN

Note: Watch the 60min Stochastics tomorrow for a turn around.  An acceleration down would keep the stochastics in oversold territory and that will not be good for the bulls.

24 Sept 2013

The rally we expected today lasted for a good part of the day but did not finish well by end of day and almost made a new low for prices.  The intra-day signal is still on sell and could push price lower tomorrow.  The Short-term trend has come out of overbought which is what we are looking for to keep the bearishness alive. 

Main-Trend: UP (divergence exists)
Short-Term: DOWN

23 Sept 2013

The rally I was looking for did not materialize as the intra-day signal stayed oversold.  That is typical of oversold / overbought levels.  We shall see tomorrow, if we can get the rally we have been looking for. 

Our Main-Trend indicator has been on a neg. divergence and we should watch out for a downward acceleration once our intra-day resets.  Our short-term indicator is hinting on that downside bias.  If our intra-day manages to rally it would be imperative that the signal turn and not stay in overbought for too long.  Staying overbought for too long risks our short-term indicator in turning up.

Main-Trend: UP
Short-Term: DOWN

20 Sept 2013

Our intra-day indicator has entered oversold in a very short period of time.  I am expecting a rally next week and we should watch to see if the intra-day signal resets to the top side without making a higher high.  EW patterns are hard to tell but many will count this as an ABC pattern down and will be looking for new highs.

Main-Trend: UP
Short-Term: DOWN

19 Sept 2013

The price action today suggest it is still in a corrective phase.  There has been no change in the trend and I personally am looking for a higher high to finish off the up-trend.

Main-Trend: UP
Short-Term: UP

18 Sept 2013

No taper, no tantrum from the markets.  Prices managed to hit a upper resistance line that marks the tops made in May and August.  A break upwards of that upper trendline for a good few days would suggest we are off to higher highs.  Our Short-Term trend has to start turning down and needs to come out of the overbought area to relieve this impulsive move from the Aug. 28 lows.  That said, the Daily chart has put in a divergence and a sell would be initiated only when a clear move down in price have occurred or momentum have exited the overbought range.

Now that the taper has been put aside for the time being, we should hear about the Debt Ceiling and the Gov't Stoppage that could reignite volatility.  Lets see what happens...

Main-Trend: UP
Short-Term: UP

17 Sept 2013

We achieved a higher high that we suspected from yesterdays post.  I exited my position a bit early as prices accelerated closer to the end of the day.  A intra-day signal for a sell was triggered by end of day but since tomorrow is FED day, we should just let it play out.  Our indicators have come in sync, but the short-term is overbought and although it can stay overbought we should see what the intra-day signal tells us tomorrow. 

Main-Trend: UP
Short-Term: UP

The August highs on the indexes have not been taken out, so in an EW perspective we still could call this a corrective move up since our last trend made somewhat of a 5 wave pattern.  But do not rely on EW alone and use the indicators instead to tell the trend.

Note: Prices are hugging the upper BB line, and a move away from it takes us to a 1660 initial support (also 20 and 75ma range) and the lower BB line at 1620 range, which is widening.

16 Sept 2013

There is a divergence in the SPX 60min chart and another high tomorrow might finish that divergence off.  Our indicators are still out of sync due to the volatility with the prices.  Lets observe to see if we can get a high by mid week.

Main-Trend: UP
Short-Term: DOWN

13 Sept 2013

Friday the 13th turned out pretty lame for the stock market.  No volatility, no new low, no new highs.  Well I guess one can be happy for a pause I guess.so what's next?  According to the EW counts, todays move would be considered corrective.  Many 3 wave patterns suggest we would break down on Monday.  The question is, where would the support be.  Many are labelling this as a small correction of some sort with a higher price to come, possibly by Wednesday when the Fed would speak.  If this is the case then we should see 1680 to 1675 as the range for some sort of short term support for the SPX.  Our Daily stochastics is still on overbought even though we have crossed down but prices could still rise.  I would be inclined to remove all my short position until Wednesday or Thursday to see where the Fed thinks they can moves the markets. 

We have a confirmed bullish Main-Trend for the indexes today, with the short-term trend switching to Bearish.  They decided to flip their sentiments, so this is not exactly clear in telling us the best risk reward trade.  Best to just stay out till it clears itself out.

Main-Trend: UP ( Confirmed)
Short-Term: DOWN

(Note: our short-term trend signalled an UP trend as early as Sept. 3 which ended today.  Our Main-trend [signalled DOWN on Aug 09th]  was not so lucky since we were in a volatile move up and it usually cannot react fast enough.  It doesn't mean however that the main trend is done going down.  What it means is that with the whipsaw the best course of action is to wait it out until both trends are in agreement with each other.)

12 Sept 2013

The Index has finally put in a down day, but its a long way from changing a trend.  The good news is that this is the first red daily bar since the 7 green bars that preceded it.  We won't know for sure how low this goes, but at least a correction is in need.  The SPX prices have come back down below the angle represented by the green dotted line.  Not only that, it has also broke the intra day 20ma.  So at least on an intra-day basis we have some more down trend to follow. The 60min chart below illustrates the next levels of support and the 200 and 75 60min MA.  Notice also that the 60min stochastics has not reached the bottom or have crossed up, so a down move is still in play.

Main-Trend: UP (Unconfirmed)
Short-Term: UP

11 Sept 2013

Prices accelerated up erasing 2 hours of decline in 3 min.  The candle ended the day with a flat top usually ominous of a reversal, but at this point its just better to go with the trend.

Main-Trend: UP (Unconfirmed)
Short-Term: UP

UPDATES TO NOTE

The CPCE has just turned from being extreme bullish... With that I added the RTH that tracks retail, and based on the pattern unfolding, I see a bearish setup.  Todays candle for the RTH has not only pierced the upper BB but also formed a reversal candle.

10 Sept 2013

Markets are gunning for the gap..  I did not think it could possibly go this high but it did, and since we have not made a gap fill, we should expect one tomorrow or the next.  Either way its already close, there is no reason it would not fill before going back down.  Our Indicators have turn UP which is bullish but our Main-Trend has not confirmed.

Main-Trend: UP (Unconfirmed)
Short-Term: UP

9 Sept 2013

An impulsive move to the upside today characteristics of a C wave.  We are at this point at A = C in Green.  Eventually the trend should be changing to the downside, and we should see our short term trend change down.  Our Main-trend was affected today though but it has not been confirmed.  We should know this by the end of the week.

Main-Trend: UP (Unconfirmed)
Short-Term: UP

CPCE EXTREMES

The Daily CPCE is at extremes suggesting a reversal or SELL.  We should be on a watch to make sure our Short-term signal also turns around to confirm the strength of the Sell.

6 Sept 2013

What a stress filled day...  First up then down then up, and finally in between.  Our intra-day signal managed to close the day with a sell.  SPX prices remained just below the 20ma and supported by our angle on the 60min chart (Green Dotted Line).  This line has been the support resistance line since Aug. 21st.  The candle pattern today produced a hanging man reversal candle.  Give one to the bears..

Main-trend: DOWN
Short-Term: UP

Our reactionary day yesterday would have been better suited for today as volatility just killed many who traded today with the whipsaws.  If you made a profit, consider yourself lucky.  This is what the candle shows and its what the candle states... Indecision.. therefore nobody wins...  We do expect for a move down next week though but we will see when we get there.

5 Sept 2013

The 75 Daily MA was broken today and prices closed above it for the SPX, but the 20ma proved to be a stronger resistance.  The bears need to take control soon or else price could accelerate higher.  Today the SPX produced a topping candle pattern, and the divergence in the intra-day signal yesterday came true.  We need to see the intra-day signal push below the overbought territory to confirm a sustained move down. 

Main-Trend: DOWN
Short-Term: UP

Note: On observation, we can see a potential wedge pattern forming from the Aug 28 lows to todays move.

4 Sept 2013

Prices just managed to stay under the 75ma of the SPX Daily chart.  Our sentiments are still bearish and overhead resistance looked to be adding up based on how the 20ma and the 75ma are converging.  Tomorrow is a reactionary day, so let us see if this is going up or down.  Our intra-day signal triggered a sell, but we wont know until we see the mannerism of the price movement.  A potential divergence tomorrow would move prices higher while our signal indicates a sell.

Main-Trend: DOWN
Short-Term: UP

Note:  If we are looking at these movement as an ABC pattern correction to the downside.  We should then look at the 20ma as the resistance line for the B wave to end so that a C wave down would equate to a move to the 200ma just following the dotted line.  A lower low below that would raise the possibility of a 3rd or extended C wave.

ARE WE THERE YET?

Most are probably asking where the hell we are on the roadmap... Well based on the ES and patterns, my conclusion is that we are in a slew of 3 wave patterns overlapping one another.  This can only mean one thing.  CORRECTION...  What follows a correction is an impulse, therefore a warning sign must be sent to those who think they can try to make money on the long side as they wait for that turn to come.  Preparations must be made for the bigger picture and we should look to the downside which our MAIN-TREND is confirming at this very moment. 

The chart below of the ES illustrates 2 counts.  No matter the count whether done or not has implications of more downside risk.

The YELLOW option in ABCDE are made of 3 wave patterns which could have ended at yesterdays high in the SPX, ES and other Indexes.

The GREEN ABC is another option where the 3 wave patterns subdivide to give us a rolling pattern, and could continue higher.  Sooner than later though one must ask themselves if this is the risk they are willing to take to squeeze out a profit for that short-term move up.

3 Sept 2013

The markets reacted positively today but gave much of the gains away.  The end of day created a reversal candle on the daily chart but the sentiments has changed to UP-TREND short-term.  One thing to note though is that we are still oversold on the short-term indicator and we could possibly stay oversold with prices accelerating down.. therefore we should be careful of any long position.  Todays price action where prices were not able to hold up can be considered weak and the bearish sentiments are still the stronger trend.

Main-Trend: DOWN
Short-Term: UP