28 Feb 2014

Just when I thought the market was making some kind of nice daily reversal, the buyers step in.  Todays move is very confusing indeed in a candle perspective.  We have a 60min reversal doji pointing to the upside in the mean time we have a daily indecision candle.  So which is it?
Fortunately for the bulls the ST is still Bullish and I cant say anymore until next week.  Bulls won this round. 

On a intra-day basis the Stoch. has exited overbought range, but a divergence would allow price to make higher highs.  Will watch this for Mondays session to see if we get a sustained move in a intra-day basis to the downside.  This would surely turn the ST down if we get a negative day.

MT: UP
ST: UP
PA: UP

Nasdaq, Russell, and Wilshire indexes - Has pierced its weekly upper BB.
Dow - Is still below its previous highs and needs a substantial move
SPX - Was just short of touching its weekly upper BB

27 Feb 2014

The triangle pattern still exists as one of our options.  Another option is that the corrective pattern is over and the days move is considered a 1st wave.  SPX really needs to break the 1841 level to keep the triangular pattern alive.  Any acceleration up means we are finishing of another 5th wave.  EW aside.  The ST has turned up and being that its in OB situation the Price Acceleration potential is high.

MT: UP
ST: UP
PA: UP

26 Feb 2014

We ended the day flat, so this gives us the 3rd straight doji.  The previous post today is still in play and we would need to break the 1825 low at least to negate any triangular pattern.  Since our ST is still on a down-trend we should respect its sentiment even though things have not gone anywhere for the past 2 days.

MT: UP
ST: DOWN
PA: UP

WHAT IS FORMING

I believe what is forming here is a triangulation pattern that only develops into a continuation.  Although Im getting ahead of myself here and not complete we can see clues from developing 3 wave patterns.  Not so evident on the SPX due to its unrecognizable structure but much more evident on others. We need to break lower (at least break a possible triangle pattern development) to void this pattern and give a good indication that the bearish outlook is the sentiment to go with and that higher highs are done.

SPX

XLF

25 Feb 2014

Nothing much happened today, but our ST (Short-Term) trend has turned back down.  Because we are in OB territory volatility becomes evident.  This is why our PA is on the UP trend.  Todays indecision turned up a daily doji and still remains bearish short-term.  On the ES prices have been relatively sideways, so we should look for continued pattern down.

MT: UP
ST: DOWN
PA: UP

Prices remain on a negative divergence... A sustainable downside would come if the MACD can move below the midline, and right now it is just above it. So we will keep our eyes peeled for this development.

Again today the Financials has shown more weakness than the SPX.

24 Feb 2014

EW count seems to be incomplete and may need higher highs for a convincing 5wave pattern.  But pattern recognition shouldn't be relied upon on its own.  We also hit 1858.71 as the high today and narrowly missed the 1860 target.  There is possible scenarios, but we are again in an uptrend, so the bullish bias is on the forefront for now.  On a bearish note,  the SPX has formed a negative divergence and also formed a reversal candle.  We should break the 1825 to be sure that a new trend is on its way.

The Financials / Banks again have been moving with a disconnected manner, and could be explained with an ABC sub pattern.  If this is the case then a 3rd or C wave pattern down might be warning enough to not chase higher highs in the SPX or any other index.

MT: UP
ST: UP
PA: UP

21 Feb 2014

The SPX tried again today to break that angle we have drawn and indicated that was a good resistance for current prices. Also to note is the continued disconnect with financials in todays session is throwing a red flag for me.  See last nights post on participation of financial index.  Our ST is also down but not out of overbought so we should watch for this to give us a clue if markets have enough juice to push prices up to new highs.  Either way I think risk is to the downside.

MT: UP
ST: DOWN (OB)
PA: UP

 

Financials are looking much more bearish.



FINANCIAL NOT PARTICIPATING

The last post I mentioned that the financials were not moving lock step with the indexes.  Looking back and comparing the index and the financials for the past 14 years, you will see that divergence between the two sectors occurred before a major market trend change.  Will this time be different?

20 Feb 2014

Something ODD today in the price movement.  The futures (ES) moved up close to yesterdays high.  The SPX managed to move close to its previous day high as well.  But the weird thing about all this is that the Financials did not follow and clearly showed it throughout the day.  Again the price of the SPX has been held up by the angle that have been proving difficult for the past few days.  So what does this mean?  Looking at the EW patterns, it remains unclear as to the intention of the market.  But the financials lack of interest to participate should put up red flags.

MT: UP
ST: DOWN (OB)
PA: UP

I am biased to the downside for now due to divergences and non conforming indexes.

Following did not follow the strong push by SPX:  ($RUT, $INDU, $TRAN, $BKX)

XLF:

19 Feb 2014

The ST has turned down for the moment but still in overbought. Therefore the we would need to watch the intra-day performances in the next day or so to gauge the seriousness of this trend reversal in the ST.  If one does not have access to the intra-day charts, you can look for the 1809 level as the critical price to break or support.  The current EW pattern shows a 3 wave, and we don't have any clues to whether it is still continuing lower or it could reverse.  So tomorrow and the next few days will be important.  Respectively, the last low made by the SPX at 1834 is important, and for the bears they need to see 5 waves down for it to see a sustained bear sentiment.  If we push above 1834 tomorrow without the 5 wave pattern down then we are still in a up phase.  Things can change day to day so we should watch for it.  Another alternative is that a 1-2 1-2 could occur but this is also a bearish pattern that allows the 1834 to be breached.

MT: UP
ST: DOWN (Still OB)
PA: UP

Gap has been closed... and now for the lower gaps and there is tons of them stretching back from 2013.

A few things to note below is the Fib ranges and the angle clusters that are converging for next week.  This is one to watch if prices comes close to the price range.

18 Feb 2014

Markets were marginally higher, but looking as though its running out of gas just make it up to the top.  The Gap that resides at 1845 in the SPX still needs to be filled and although not a requirement, I do not see why it should not since it is only a few pts. away.  This suggest higher prices.

MT: UP
ST: UP
PA: UP

14 Feb 2014

I was seeing green instead of red for valentines day.  We seem to be oh so close to covering the gap at 1845 SPX today.  Seems someone just playing with us. Our MT has turned Bullish albeit near a top from my belief, but the MT would be in a negative divergence if we make new highs for the SPX.  So watch for this next week.  If we do not make a run down next week, I would be inclined to go with a extended 5th wave pattern to new highs.  How high?  For now its the 1860 to 1890 range.

The price stalled on one of our angles, and the pull back by the end of the day was weak, which leads me to believe that we are still working at higher prices. The DOW might not have the same sentiments and this time the contradictory pattern might just be the answer (non-confirmation spells trouble).

MT: UP
ST: UP
PA: UP

Notice that the NYHL MACD has been diverging from its cumulative trend and the NYSE.

ERININGS

Taken from

http://www.mcoscillator.com/learning_center/weekly_chart/can_earnings_get_better_than_this/

I drew up the red trend lines based on the divergence before any market corrections.  I think this is a no brainer as it tends to show negative divergences probably 70% of the time or more.

13 Feb 2014

This crazy market gets crazier and crazier.  Just when everybody thought bad news is bad market, it has become good news for stock.  The negative divergence has disappeared and is now projecting an overbought reading suggesting it has room to push up.  Is this a bull trap? The only thing going for the bears right now is that longer-term it still has a chance but it will show itself tomorrow once the week is over.  The bears are running out of room and a reversal needs to be hard and fast.

MT: DOWN
ST: UP
PA: UP

We have 3 gaps that could be a possible target for a pull back.  2 of which is resting around a Fib level assuming that todays top is it.  But there is also a Gap that has been waiting since late Jan for it to get filled.  Will we fill that first?

12 Feb 2014

A brief start at a higher high this morning, but prices have remained sideways to down throughout. The ES managed to close the day in positive position, but the SPX fell short.  The daily chart of the SPX is also sporting a reversal doji.  Any downturn now will need to test the support at 1810 - 1812 area.

MT: DOWN
ST: UP
PA: NA

 

There is a possible count that would take us to higher highs and to the 1860 target to finish of the Month of February.  This possibility puts us at a late Feb CIT or early March CIT.  Our ST still remains strong and this is very plausible.  But this is just a theory and we definitely should follow our indicators.

 

The chart below illustrates a subwave 1 that could extend up to 1900 SPX.

 

11 Feb 2014

Markets were strong today from open to close.  Price surpassed even the potential target we were looking at yesterday of the 60min 200ma. The impulsiveness since the lows has been impressive, but volume doesn't seem to confirm it.  I believe we are close to a top of some sort.  Will have to see how it forms tomorrow to see if we can make a sharp move lower to keep the MT in the down position.  Our ST is still on an uptrend and this is bullish so we must respect it until it turns down.

MT: DOWN
ST: UP
PA: NA

10 Feb 2014

A continued run up is starting to show some negative divergence on a intra-day basis, but the ST still remains strong and UP.  We might be challenging the 60min 200ma around the 1813.

MT: DOWN
ST: UP
PA: NA

Just adding a chart of interest at the bottom is the Percent of Stock over the 200DMA. Currently still looking Bearish.

7 Feb 2014

Yesterdays ST was right, and I have taken out my shorts for a small loss.  The SPX has closed under its Daily 75ma and is now being met with the 20ma as well.  There will be strong resistance here, and it must be confirmed before taking on short position.  Yesterdays analysis of the EW pattern is a good example of how things could look but is not the case. 

MT: DOWN
ST: UP
PA: NA

On a intra-day basis, prices are strong and it has closed above its 75ma.  The resistance now is at 1800 and the 60min 200ma at 1814.70

6 Feb 2014

The downtrend we were looking for did not materialize and the ST have moved to an up-trend but still in Oversold territory.  The bearish counts can be counted as and ABC still and would need higher highs tomorrow to negate that count.  The Jobs numbers comes out tomorrow and will be a market moving event.  So be on guard.  Ultimately though, even if our short term is up trending, our Main trend is still down, and would need for our ST to move up above oversold range.

MT: DOWN
ST: UP (Still OS)
PA: DOWN

The reason why I am still stubbornly bearish is because the patterns made from 4th to 5th of Feb. does not look like a bottoming pattern.  Now I have said before that EW is not something to be relied upon on 100% and I still do think that way, so I am using the ST as an exit point if it stays up tomorrow and comes out of oversold.  Otherwise I am still short with cushion.

Courtesy of Gordon T. Long at www.gordontlong.com

http://static.safehaven.com/pdfs/triggers_2014_02_05.pdf

5 Feb 2014

Today we made a lower low in the SPX.  It could be a bottom, but I don't feel that the patterns made to get that low is convincing enough.  The intra-day charts are pointing down and all indicators are still down.

MT: DOWN
ST: DOWN
PA: DOWN

So based on my doubt, this is the only way I can explain a pattern that would keep us in a down phase.

4 Feb 2014

Todays rally doesn't seem complete for the SPX, but I could be counting the patterns wrong.  So far though nothing has changed for our indicators.  Everything seems to be point down still.  The bullish case scenario is that we are done and yesterdays low was it, and we are making a 1-2, 1-2 pattern (overlapping and making it look like a corrective rally).

Any price movement above 1770 range is bullish..  At the moment though we are in a congestion area shown with a horizontal dotted lines in green and red on the chart below.  Also our positive divergence has disappeared and this is bearish signal on a ST point of view.  Our 1720 target is still within reach.

MT: DOWN
ST: DOWN
PA: DOWN

Still in Play...

3 Feb 2014

Fridays analysis was spot on.  The 4th time it tried to break support it definitely didn't hesitate to plunge.  I have targeted an area of 1720-1710, but one should be careful of a reversal.  Most of these acceleration are usually followed by an impulsive rally so if you have shorted near these lows I would suggest adjusting stops or be prepared to exit on any indicator that says its reversing.  I do however feel that there is one more stab lower and that could come as early as tomorrow or by Wednesday.  Either way there is not much room left for any downside short-term unless we free fall (Crash).  But indicators are positively diverging already and one must take this into account.

MT: DOWN
ST: DOWN
PA: DOWN

This is still in play...

An A = C EW Scenario would likely take us down to the 1720-1710 range for the SPX.