15 May 2014

So much for expecting a brief rally.  Momentum was too strong for any rally to occur and drove prices decisively down.  Our trend on the ST has shifted down and can carry to more lower prices.  Be aware of any impulsive move tomorrow to the downside because this situation could potentially change the sentiments of the MT as well.  I will have to see if longer-term sentiments comes out of OB condition.  This would spell trouble for the bulls and recession to start.  As for now there is no definite EW count to the downside. 

So we should just stay the course of the ST until it tells us otherwise.

MT: UP
ST: DOWN
PA: DOWN

Note: That the weekly charts for the SPX has so far formed a reversal doji and we still have tomorrow before it prints for good.  So watch tomorrows action.  The weekly stochastics is also at a negative divergence.  Therefore the numbers are adding up in the bears favour.  Remember that volatility is in play so anything can happen.  There is just as much bullish pattern as there is bearish pattern.  So if we cannot use these as a gauge to the state of the markets then the one we can rely on is our indicators above.