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