31 Mar 2015 - Looking Impulsive So Far

For today's session, I was looking for an impulsive move lower.  The morning started with the indicator trying to stay in the OB range even with the move lower.  This is a dangerous spot to be in if you are short unless the signal exits the OB range (Mentioned: HERE).  Following the intra-day chart would finally show the setup we were looking for, and the impulsive move I mentioned yesterday was also materializing.

The end of day pattern and signals though are more mixed than clear.  Isn't it this way all the time? LOL.  I was hoping to actually get more distance in price action and more impulsive in momentum, so we will just work with what we have today.

The EW pattern yesterday showed a 3-wave pattern that we can consider corrective.  A higher move breaking the high would allow it to complete a 5-wave pattern that did not materialize.  This is good for the Bears.  However with today's move, we also get another 3-wave pattern down which can be considered corrective or unfinished.  The options we have here now is that since we have a corrective pattern up and down, I can consider it a 3-wave up for A-wave and a 3-wave down for B-wave.  So if this is correct then we should get an impulsive move up for a C-wave.  And since we overlapped our low today with the high made on the 26th, we cannot call this current low a 4th wave.  The option for more downside would have us complete the current 3-wave into a 5 wave pattern, possibly for another sub-wave [i]lower.  The bulk of the day price have made a triangulated pattern only seen on B waves or 4th waves.  This is clearly not a 4th wave down.. Therefore the risk of the EW analysis is that this move lower is corrective and we should see a C-wave (impulsive move up).

Our ST has not changed direction as well with the move we had today in the SPX.  Since today is the last day of the month, it is a good idea to look at the trend in a monthly chart to see if we can see a long-term picture going into April.  It is evident we are in a down-trend on this time frame, but also still OB.  The clue will come in tomorrow to see if the signal pushes lower..  If prices push lower this month we will also see the monthly try to push out of the OB.  This should confirm whats in store on a monthly basis or at least by the end of next month.

-EW analysis risk for more upside. (These counts can be wrong so additional confirmation needed)
-ST still in the up trending direction.

We should look for a continued move lower and into OS territory by the intra-day signals.  This would show a willingness of markets to start falling apart.  A move back above tomorrow would show the Bulls in control.

MT: DOWN
ST: UP
PA: NA

30 Mar 2015 - Possibilities

Our ST has turned up quite fast and its to be expected when volatility like this happens.  As you can also see the intra-day charts has shown a good extension of its signal to the upside and OB range.  This acceleration promotes distance to initial position on any long or short trades.  Everyone must concentrate on these potential moves.  Plan your trade, and trade your plan.

Todays price ended on the 200MA of the 60min chart.  Which is also above the 20 day MA.  I was expecting a lower low from the early low.  This expectations was achieved by the Dow Jones and strangely not on the SPX. Perhaps there is an explanation that I will examine next through EW.  But before we do,  the best thing here is to figure out what the next step will be in the coming movements.

Since we are in the OB range of the 60min chart and an ST that has turned UP.  We should look for a risk to the upside since that is where it's trending.  But we need to look at the 60min chart tomorrow to see if we stay or head below the OB range.  So a long position should exit when the signal also exits the OB range.  A trade to the short side has to be taken as temporary until the ST confirms the position.  If by any chance the 60min signals turns up during the trading hours then any short position should be covered.  This is how I minimize my risk..  By looking at low risk holds and high risk entry.

On an EW perspective,  The move up today could possibly be a sub-wave C of a sub-wave (ii) (shown below).  We wont know till tomorrow if a (iii) sub-wave has started until we see a impulsive move lower.  This in effect fits with the volatility we speak of on this blog.  Let me remind the readers again that EW is speculative and changes more often than a woman changes her shoes.. (and that's quite a bit).  The divergence in the SPX and INDU can only be explained in EW format because if we see the low put in last week by the Dow Jones as a sub-wave (i) and also doing so for the SPX,  the low becomes irrelevant technically speaking.  The same could be said for a corrective phase that would be considered over last week as a C wave (red) ending proportioned for the DOW but premature for the SPX.  Right now we do not have a full 5 wave pattern up, so if tomorrow we do have that higher high extended from todays high then we could call it a first wave and there will be less conviction for bearishness.

The important thing to note from todays big analysis is that our ST is UP, Intra-day is OB, and EW pattern seems to only have 3 waves thus far.  So we would side with caution to the upside until we see enough evidence of a downside.

MT: DOWN
ST: UP
PA: UP

Liquidity

http://www.oaktreecapital.com/MemoTree/Liquidity.pdf

27 Mar 2015 - Bear Trending Prices

There is a high probability that the rally or corrective moves are still progressing.  But I suspect this is just that.. A correction.  We ultimately should have lower prices going forward.  Now of course this is what I feel will happen and wont know until all the indicators agree with me.  The reason why I state this is that the intra-day movement has been on the up, all the while the trend is lagging and still bearish.  This what I like to call a reset..  A topping of the indicator while another lags behind at the bearish range.  The only thing that will change this sentiment is if our indicator stays in the OB position for a longer period of time.  By doing this, the bearish / bullish indicator would have time to catch up.

MT: DOWN
ST: DOWN
PA: NA

Last night I wrote a note on the chart saying that shorts would have been initiated before the market close.  With the move higher by our intra-day chart and price going sideways, this would have been a good time to cover and wait the correction out just to be sure as the price trend was up.

26 Mar 2015 - Volatility Is Back

I was anticipating a rally or a bounce based on yesterdays analysis and it has happened, but not without moving lower early in the morning.  The two options were to hold the short position until the intra-day chart exits its OS condition or hold the short until an ST crosses up.  If the 1st option was taken then you would have entered back short before the end of the market close.

When volatility exists, it is a better to exit early to get the most out of your profits.  This advantage has its disadvantages though and that means having to trigger more trades.

MT: UP
ST: DOWN
PA: DOWN

Last Time This Happened...

The percentage of stocks above their 200 day MA is a very interesting chart to watch, mainly because it is a gauge on how the herd is doing.  At least from how I'd like to understand it.  In any case the bullish bearish trend has again shifted to the bearish side, and the last few times the percentages shifted to bearish, we had a dip.  Particularly during Aug. 2014, Mid-Late Sept. 2014, and late Feb.-Mar. 2015.

I can dismiss this indicator if it was small zigzagging affair, but the fact is that the price movements have been impulsive whenever the bearish signal was triggered.  It is not to say that we are going to crash, but increase risk in acceleration doesn't help trying to say we won't crash either.

I am just laying out the view of a sharp move until we see a move back above the bullish trend.

25 Mar 2015 - In Agreement

Both SPX and ES are now in agreement.  Both are trending bearishly and the intra-day signals are in OS.  This has caused the acceleration to the downside if you are new to the blog, but for the rest of the readers, this was expected or anticipated.  Looking at the high made on Feb 23rd and the current draw down, it does look impulsive.  It looks much more impulsive than the move made in late Feb. to Mid Mar.  At least to me it does.  So the EW sentiment here is it's in a C-wave or 3rd wave lower.  As long as our high holds these counts are valid. 

The ST has also shifted to a down trend.  This was also triggered by the OS condition staying for a prolonged period of time in the intra-day charts.  So to note, accelerations and ST CIT is a high probability event in OS elongation period.  Sounds about right... LOL.

Price also for the SPX is currently sitting on the 75 day MA.  Next level to watch is the 2040 to 2010 where the lower BB line sits and below that the 200 day MA.

Since we are in an intra-day OS.  We should at least try to bounce up, so if anyone would like to hold their short position, they can hold it due to the ST sentiment being on the downside or exit on an intra-day exit of its OS range.  You would have to however initiate your short if the signal in the intra-day charts crosses back down.  So now you have 2 options on how to trade your position for tomorrow.

MT: UP
ST: DOWN
PA: DOWN

24 Mar 2015 - He Said She Said

The cash market and the futures market for both SPX and ES seems to be in disagreement with each other.  I noted this a few days or a week back, and have been noticing it more and more.  The disconnection is not worrisome per se,   But clearly both are on two different camps.

I cannot say who is leading and who is lagging.  The ES though is on the bearish trend into the close of market today while the SPX is still on a bullish trend by the close.  Maybe the SPX will catch up by tomorrow since its intra-day signals are in OS range.  So far though by way of price action, the higher high in price that I was expecting is looking less likely if the acceleration or the bearish trend in the ES affects the SPX cash.

Perhaps this is the 2nd wave that many are looking for and should produce a very very impulsive move lower.

MT: UP
ST: UP
PA: DOWN

The current price support is being held by the 200ma in the 60min chart followed by the 75ma just under it.

23 Mar 2015 - Having a Hard Time?

Looks as if the market is short of breath.  Maybe better luck tomorrow as it tries to break the recent high made last week.  The intra-day with its foot in the OB range was not enough for prices to push higher.  Judging from the signals and price movement, there is weakness lurking behind.  With the current trend still up, we are still watching for a push up, but we also should watch this intra-day for its general direction tomorrow.  A push lower by the intra-day charts tomorrow would allow us to wait till the signal crosses up again to trade up into the SYNC with the ST's UP trend. 

The risk undoubtedly is still UP.. If you would like to speculate for a down move you would need to be out on a turn up of any indicator you are using in an intra-day time frame.

MT: UP
ST: UP
PA: NA

The MT has now managed to catch up, but with volatility constantly pulling back and forth, our MT  has recently becomes a laggard.  As I always said, the probability of the signals clearing up will come.  You just have to be patient.

20 Mar 2015 - Upside Scenario

The Upside scenario we discussed yesterday was the one controlling the trade today.  Yesterday, I indicated the fact the intra-day and the ST are both in SYNC with each other and this would be the stronger signal, but we still needed to be aware of  other possibilities.  The acceleration also manifested when the signal entered OB territory, which I also suggested last night.  As it stands, the risk to the upside is still very much in play.

Notice the 61.8% retracement I have been showing throughout the past few charts.  If adjusted to the actual body of the candle in early Feb. as the pivot point of the Fib. retracement instead of the low made just above the 1980 SPX pts.  The 61.8% retracement will then land exactly at the lows made during Mid-March.  Sometimes it is hard to choose where a certain Fib. pivot should start, but hindsight is 20/20.

The EW count of an ABC pattern still exists and we should keep aware of this in case the market does make a turn down.  Of course we would let the indicator confirm that as always.  Overall sentiment of risk is still to the upside.

MT: DOWN
ST: UP
PA: UP

19 Mar 2014 - Taking a Breather?

Intra-day time frame indicated that the trend is down throughout the day, but turned up by the last few hours of trading.  The UP trend is now in SYNC with the ST, and acceleration risk of upside can occur of the intra-day trend continues tomorrow to the OB range.  The EW pattern we threw out there yesterday is still holding. 

We should look to the 60min indicator tomorrow to see where the trend goes.  Gauging the trend of the 60min allows us to get into a trade much earlier than if we are trading a specific time frame but must be in the same direction. 

MT: DOWN
ST: UP
PA: NA

 

BONUS:  As per request here is the chart of the Boom and Recession Trend that we are watching.  The signal is down and approaching that line that can push us again into a possible recession warning.



18 Mar 2015 - Fed Confused?

The word "Patient" has been taken out and replaced by "Confused".  I'm sure they understand that regardless of whether they raise rates or not that there are consequences. Maybe short-term solution is to go with least resistance.

Measured move up was impulsive and could be a leading count of ABC with A=C hitting at 2104 SPX.  The hourly chart has put in a nice reversal candle, but how strong is the signal?  Clearly the trend is still UP..  Bears need 60min chart back into OS and ST at down-trend, which both are not in bearish camp.  Bulls though are in party mode.  ST - UP, 60min - UP..

MT: UP
ST: UP
PA: NA

If A=C is correct then we should see a turn around tomorrow.  If not then we should see an accelerative move up.  Either or, we should always be prepared for both "what if" scenarios.

 

Bonus: http://www.zerohedge.com/news/2015-03-18/here-why-fed-cant-hike-rates-even-025

17 Mar 2015 - Mixed Signals

The market today started the day with mixed signals.  This often produces patterns that are either volatile or a non-directional movement.  What occurred is the non-directional movement in price since we did not see any extremes in the indicator to trigger any acceleration in either direction.

https://twitter.com/Pok8Rok8/status/577875937448050689

The ST remains on the Up-trend, while the Intra-day charts looks to continue on its down-trend.  Tomorrow, we should watch for:

- Down trend in the 60min chart and into OS range would confirm bearish, but ST would need to also turn down.  Without the ST following, it would just be a intra-day move down which is not anything solid the bears could stand on.

- Up trend acceleration could occur if intra-day climbs back above the OB range.  Bulls would be happy with this, and in doing so would SYNC back with the ST.

Can't get any clearer than this..  Two scenarios, two great plans.

Speculatively speaking, the pivot high yesterday works with an ABC count to the downside, with a target of 2005 for an A=C pattern.  This would mean the FED has disappointed or market is not believing the FED.. LOL.

MT: DOWN
ST: UP
PA: NA

16 Mar 2015 - A Shot of OB

The SPX shot up today and we can only attribute it to the OB signal in the intra-day chart shown below.  The ST has also turned making this run a bullish one.  Prices are now hitting the 60min 200MA, and the trend line resistance shown by the green dotted line.  Will this be a strong resistance?  Last night the market was showing bearish tendencies in the futures market but today was a whole different story.  I can't stress enough how much can changed in just a few hours. This is why we have to be prepared for the other outcome or scenario.

For Bears to take control we would need a move to OS territory with an accelerative attitude by price.  Bull need only to stay in this zone to keep the possibility of an acceleration up at high probabilities.

MT: DOWN
ST: UP
PA: UP

A Tuff Nut To Crack...

When looking at charts certain things stick out like a sore thumb, and its because it has been consistently providing a line in the sand so to speak.  So if you would take your attention to the charts below, you will notice that on a weekly scale the price seems to have trouble cracking and staying below the 20 week moving average.  At most it would only stay below for a max. of 3 weeks since the early 2012 correction.  Since then we've only seen two occasions where it stayed below the 20 for more than 2 weeks. Nov 2012 and the Oct 2014 correction.  Out of the 12 that poked below the 20 week MA.  Only 5 have seen a posting below the 20 for 2 weeks. 7 of those only made a cross down on a weekly scale and managed to close above it before the week ended and printed.

So to me, this suggest that the break in the 20 week MA this past week should be something to watch to see if next week see us finally following through to the downside..  If it does, the next step is to use the 20 week MA as a resistance for Bulls and shorting opportunity for Bears.

 

BONUS:

 

This chart below is what I use to indicate a possible start to a recession or a boom...  There are some volatility but does not occur all the time, and can carry the momentum in most cases in the past.

The eventuality of a committed turn is a certainty...  and volatility usually indicates a struggle between bulls and bears.



13 Mar 2015 - Bad Day For Some Good Day For Others

We had a nice rally at the end of the day, but was this enough to turn the tide around? In my opinion I doubt it.. But my track record according to what I am feeling is not as good a track record as compared to the indicators we use.

The following is my observance that is of importance;

- The ES made a new low, but the cash did not.  I noted that a late day sell-off would keep the data in sync with each other.  This however did not happen so I am looking for a lower low next week (My opinion).

- The pattern created by both ES and SPX to the down side is impulsive yet the SPX was followed by a corrective pattern.  Could this be an abc for a 2nd sub-wave of a v-wave or Green 5th wave? Again this is speculation and an assumption that the count is right, which we cant get married to.

- Lastly our ST is still in a downward trend and has not changed direction.

With the 3 arguments above I would say that we still need a lower low, but the most important of all is the last point made.  ST is our strategy and an exit of OS would trigger our short covering or long entry.

The intra-day charts shows an up-trend in progress, but because this is in affect for a few hours to days, it would still have time to change course by the start of pre-market hours on Sunday on the ES charts. So lets watch this development to see how we can stay ahead of the game.

Finally in conclusion the trend is still clearly down with our MT-Main Trend still down, and the ST still at OS territory.  This syncing is what creates good trigger and accelerative signals.  Counting is good practice, but is biased to what the eye wants to see often than not.  If I can get the current count right on the dot, it does not mean I can give myself the title of greatest EWI theorist around.  Even though I am confident with my EW counts there is a reason it is called "Theory" I suppose.

MT: DOWN
ST: DOWN
PA: DOWN

The Bears need the intra-day charts to turn down or enter OS once more.  As for the Bulls, they would need for the intra-day charts to resume its upward uptrend that is currently playing out, but most importantly need the ST to confirm the Bulls are in the game.

Bonus for those that like numerology: 3.1415 or
http://www.businessinsider.com/once-in-a-century-pi-day-2015-3

Intra-Day 13 Mar 2015

@Pok8Rok8 But wont be able to confirm until our ST actually turns up..

— MP (@Pok8Rok8) March 13, 2015

12 Mar 2015 - Rally Expected..

Yesterday I mentioned a rally could occur but that a corrective pattern yesterday indicates that we should see further downside moves.  This stance has not changed and one of our analysis has been met.  Now the question is if the intra-day signals will move out of the OB range that it is in by tomorrow.  If it does, it would be safe to assume that lower lows will also be met.

The ST is still in OS territory so this still gives us a probability on our bearish sentiment.  Exits should be if the ST changes trends.

MT: DOWN
ST: DOWN
PA: DOWN

This is the ST chart showing Profit / Loss based on the CIT signals.

11 Mar 2015 - Price Pattern

Todays price clustering is an indication of a corrective pattern, and suggest a continuation of the trend to the downside.  Depending on the count, we might still need a move up for a corrective rally for a Minute sub-wave.  As a swing trader I would just hold my position unless we were to exit the OS range in the intra-day level or to exit on the ST CIT.

There is a minor positive divergence in the intra-day charts, but I would not sweat this since our intention is to exit at OS exit of the indicators.  This just reminds us that there is a possible CIT in the intra-da level.  Do remember however that divergences can have a prolonged affect.  So divergence by itself is not a good gauge of exit or entry triggers.

MT: DOWN
ST: DOWN
PA: DOWN

 Yesterdays analysis concluded that we should hold shorts as long as we are in OS territory.  Most cases there would be an accelerative move and even though we do not have that today, holding the position is still a good idea.  This is not because we are in Fear Of Missing Out.  This is just a tactical move which plays the odds of a profitable trade.  Perhaps the acceleration down will resume tomorrow, therefore it would be unwise to exit when a gift is starring you right in the face.  These setups is something most people do not notice, but I am here to show you the potential of such setups.

I believe these setups are better than forecasts due to the nature of a higher probability CIT.  Forecasts can tell you when price turns, but often times it does not tell how far it will move or when it will end.  This setup however tells us when such a thing can occur.  We are not picking an absolute top or bottom.  That would be foolish, as the luck of it will not be on your side and will fail you more times than if you get it precisely.  Notice out ST turned down at 2105.  This is not the top but we are 60pts down currently from that signal. 

Since the ST triggered a downside sell signal, there have been 2 accelerative move.  On an intra-day level there would have been 2 trades made, but on an ST level only 1 trade would have been made with a hold on that same position.  This is why its important to stay with the timeframe that you are comfortable with rather than jumping from one to the other.

Note that if you were to take away all the above illustrations and kept the ST signals by themselves.  You would have had only 2 losing trades and the rest would have been profitable. 

10 Mar 2015 - Acceleration Confirmed and In Effect

I was apprehensive in calling an acceleration yesterday, but cautioned to watch for downside acceleration, and we got that today.  Down 35.26 pts. for the SPX.  Since we are in OS condition, I expect Acceleration to be in effect, so shorts should have been held into end of day or overnight.

MT: DOWN
ST: DOWN
PA: DOWN

Everything in SYNC and looking good for more downside bias.

Note: I have labelled a possible iv - wave move up, but it does not necessarily have to happen.  This is just a theory that if the count is right that the move up would be expected.  But due to the nature of the indicators, the ST will be in a downward trend for a few days at the least and the intra-day is in OS territory for a few hours.  So, please watch the intra-day signals to exit OS if you are a day trader before you exit your short position.  If you are a swing trader then wait till the ST confirms the up-trend before exiting short position.

9 Mar 2015 - Acceleration Warning?

Last Friday was the anniversary of the Mar 6, 2009 low.  So it would be fitting to keep an eye for the market at this juncture.  This morning I tweeted that the intra-day signals are weak and that there needs to be attention given on any cross down by the signals to confirm a downtrend.  This did not happen because the 60min signals were on a move up all day.  This move up though did not force the ST to move or react, meaning that the momentum is still clearly to the downside.  The one thing that I am noticing now is that the ST can easily go into acceleration or OS range as early as tomorrow if the intra-day turns down.. Again confirming the CIT intra-day and in SYNC with the ST.  No guarantees, but something to be watchful for since we are at the border of a sell signal.

It is possible that any move lower would have us try and test the 2000 level where the 200 day MA is, but we would still need to break other supports to get here.  Could we hit the 5th sub-wave tomorrow and stair step lower?  It is possible.. This type of move could hide the impulsive moving nature (no big moves down, but small drops or even small gaps).  My suggestion is, do not short until you at least see the 60min signals cross down tomorrow or hold your short position until the ST turns upwards before you cover.

MT: UP (If prices are maintained at this level for SPX or lower the MT will surely signal a CIT)
ST: DOWN
PA: NA

It is tempting to signal an acceleration down, but I would be speculating if I did not wait for it to go into OS range. Therefore I would be doing injustice to my indicators.  Sometimes its better to be late than never.

Note: Our MT has not given us good direction, but this is to be expected due to volatility.  The eventuality of it clearing up and giving us a trend will appear.  We just have to ride it and follow the flow of things.  This is why as traders or investors you need to know what time-frame is best fit with your style.  Maybe, the ST works better, but you will be trading at a higher frequency of course.

Based on the chart above:

-ST signals occurred 13 times since Dec 2014.
-MT however only occurred 4 times before this writing.

6 Mar 2015 - Hit.. Now What?

Yesterdays outlook of 2080-2070 was hit be it on the lower end of the range.  This was brought on by the OS condition which accelerated prices to the downside.  The price has closed above the 2070 just under the 60min charts 200MA. 

So what now?  Next week we will be looking at whether the support holds or continues lower.  This is due to the OS condition mentioned above which is still currently in OS in the intra-day.  I would suggest holding on to shorts if you still have it until the OS range is exited by intra-day signals.

There is a possible Bearish Count that I presented at the bottom.  Ultimately, we are still in an MT - UP trend, but that can change by next week if we do not rally.  So the bearish count although price looks to be in a corrective pattern should also be considered.

MT: UP
ST: DOWN
PA: DOWN

5 Mar 2015 - No Break

The 20day MA held prices yesterday and most likely kept prices up today as well.  The action today though is feeling corrective and we could push lower to 2080 or 2070 perhaps.  There are a few markets or stocks that looks to have topped and turned over, and I would assume that not all indexes will turn at the same time with each other so it is a good idea to check the indicators on those index or chart you are looking at.

MT: UP
ST: DOWN
PA: NA

There are no indications at the moment of an acceleration but the first clue would be in the intra-day charts if you follow it.

4 Mar 2015 - 20 Day

The 20 day has put a cork on any downside push today supporting price at 2090.  A break of this and its down to 2080.  The ST has turned today, so intra-day charts has done its job on manipulating the Short-term trend on turning down.  Breaking the 20day MA here is key...  On a daily basis the support after a break of the 20day MA would be at 2040 and 2000 where the 200day MA would most likely be by the time price reaches 2000.  I would urge people to take it one day at a time as things can change very quickly.  For now though the ST is Down.

MT: UP
ST: DOWN
PA: NA

3 Mar 2015 - Still Flagging a Correction Here

The SPX is still flagging a correction as our indicators have not seen any change for the downside.  A reset on an intra-day level would be the clue to a containing this corrective move.

MT: UP
ST: UP
PA: NA

There could possibly be more downside tomorrow so watch what the intra-day charts do..

2 Mar 2015 - Still OB

Prices in the SPX looked to turn down this afternoon and we needed a confirmation from the stochastics that the downtrend is materializing but that did not happen and kept open to the upside. Now the indicators are back in OB on the intra-day level.  Bears have not put a dent in the Bulls move up and has not changed our ST either. 

MT: UP
ST: UP
PA: UP