2 June 2014

We have started the month of June on a bullish note extending to another new high.  The indicators are still in overbought and like any overbought or oversold characteristics, there are higher chance of price acceleration.  Prices for the SPX has now hit the upper trend line of a diagonal triangle.  If we do see a reversal, the intra-day charts should provide us with that clue. 

The 60min chart shows us that prices are negatively diverging with momentum.  This can only be confirmed once our indicators turn south.  So far the indicators remain positive, but can change by tomorrow morning.  With any charts, one must be reminded that the indicators are only good for a certain time.  So if you are using the hourly chart, the indicators will only be as good as an hour to a few hours.  Once the indicator turns and prints, then the trend should be followed for the same amount of duration (an hour to a few hours).  Never use a daily or a weekly chart to trade intra-day, and never use an intra-day chart to trade long-term.  In this case if our indicator turns down tomorrow, I would give it a few hours to travel south.  Once the indicator crosses up,  profits should be taken if short and a long entry should be taken if long, but only for those hours.

The hours should be re-evaluated if it manipulates the longer-term charts.  If the intra-day has the ability to change the daily or weekly chart in its direction, then one can ride a corrective (losing trade) phase before the trend resumes.  These are just refreshers for those who follow my blog.  This is also the way the MT and ST and PA works.

The ST is so far still bullish but we should wait for the intra-day charts to turn down to see if the ST becomes influenced enough to turn to the downside as well.  If it does then we have a ST CIT.

MT: UP
ST: UP
PA: UP

There are a few cycles indicating a potential turn this week, therefore I have indicated or highlighted another pink range for a potential CIT.

Daily Diagonal trend line tagged...