31 Jul 2015 - Higher Highs In A Bear Market?

It's normal to think that "Bear Markets" are only down trending.  This depends on when you consider a bear market to start, and it also depends on which indicators you use.  There is something that is being said by a stock or market when divergence occur.  The way I see it is that sentiments are getting weak or investors are having less confidence in the stocks as prices move higher.  This could extend for a period of time, but rather than wondering when it would happen it is better to see it as an early opportunity to exit which can setup for another buying opportunity in the future.  We do not know how low prices will go either when it happens but indicators usually creates a "reset" environment and shows how intense the previous divergences are. 

Why do I mention divergences?  It's warning us of something at the moment and based on my indicators the bearish sentiment has been triggered while prices are staying strong at support.  So for the next few weeks to months, this support should be watched carefully.  The 200 day MA is now becoming a very critical psychological line in the sand.  Things to watch for are;

-Divergences in indicator vs. price
-Momentum of the price vs. indicator
 (Positive - Indicators makes a fast move lower while price stays relatively the same).
 (Negative - Indicators makes a move lower but prices outpacing the indicator).
-Daily Lower Lows or Higher Lows using indicators that have reached the same level previously.

Based on a "DAILY" chart above we can see that the sentiments has changed from bullish to bearish, but not many chartists see it this simple.  This is a simple analysis and the only execution you need is if the bearishness is broken by price higher or continued by price lower.  Bearishness continuation needs for price to exceed previous lows if signals resets lower.  If not we can consider price being supported strongly.

The Monthly signals have printed and although the DOW is bearish, the SPX seems to buck that trend.  But viewed on a Daily basis we can see that even with a bullish close, the sentiments are bearish.

So in conclusion, a bearish mindset needs to be the priority due to a higher risk for surprises and acceleration to the downside.

MT: UP
ST: UP
PA: NA

30 Jul 2015 - MT Almost Turning Up

The Medium Term trend is at risk of turning up and needs to reverse sooner than later if the bears think that the top is in.  If it does not stay on a down trend, there will be risk of a few weeks of positive moves.  The ST however has not turned down and this needs to push lower to save the bearish MT.

Going down to the intra-day level, there seems to be a short term bearish signal but do caution that the signal line is still in OB range with an ST still in Bullish trend.  If the intra-day signals can manipulate the ST into turning down then we have a confirmation.  Watch tomorrow for signals to exit the OB in the intra-day charts or enter into its OS level.  Any of these scenarios would be needed before going short.

MT: DOWN
ST:  UP
PA: NA

29 Jul 2015 - FED Strong

Markets are bullish on Fed speak.  Prices have also crossed major MA's, with ST's turning UP.  Higher lows are being printed and should caution the bears near term to re-evaluate their analysis.  This rally is becoming a full on rally instead of the corrective rally that I have been leaning towards.

 Things can still change, but for the mean time we should look at a mixed bag of indicators which means this is a hard trade we are faced with, with no clear direction.  Time-frames need to be in SYNC in order to have a low risk trade setup, and with intra-day indicators in OB the whole day, there is still upside potential.

MT: DOWN
ST: UP
PA: UP

28 Jul 2015 - Stuck In The Middle

It is no surprise that price have bounced from the 200 day moving average as it is becoming a critical last line of support, but today's prices have been held back by the 200 and 75ma resistance of the 60 min. chart.  We should see soon if this is or isn't the one that carries prices down into a multi-month downtrend.

MT: DOWN
ST: DOWN
PA: UP

Market Sentiment Update

The Market signal for the bearish view is still in a downward trend lower even with the rally we had to ATH a week ago..  I would caution those who is on this site on a regular basis to watch for this signal for possible PRICE ACCELERATION if it enters Oversold condition.  You are the lucky ones...

Take a look when that happened.. 2008, 2011, 2014.  It is fast moving and much more devastating if signal does not cross back up above the OS territory.  2011, 2014 was a good case where the bulls got saved by the turn around out of OS.  The time has come for this chart to be relevant again.

27 Jul 2015 - Back To 200MA

It wasn't long ago that we were in this level and a bounce higher has reinvigorated the bulls.  This time around the bears are having a laugh.  If you notice though, this has gotten to be a dangerous game for the bulls as the daily moving averages has caught up to price.  How so?  With price trending sideways for quite a few months, the 200 has slowly but surely made its way up and now price do not have room for margin of error.  Prices need to move up again and make some gap between it and the 200 day or it will risk losing solid footing and collapse.

That said, we saw an intra-day signal that stayed in OS position and kept a fairly good momentum since last Friday.

MT: DOWN
ST: DOWN
PA: DOWN

The EW structure of the ES looks to be missing a sub-wave 5th.  This assuming that its a 5 wave affair of course.  Reason why I point this out is because I cannot easily tell in the SPX chart, so we would probably look for another lower low if the structure count is correct.

24 Jul 2015 - All Bets Are Off

"All Bets Are Off", this was the wording that I posted in the case that the signal in the intra-day chart retained a position in the OS range.  That's exactly what happened today, and the acceleration was also to be expected.

The funny thing about numerous indications that point to a rally like we had yesterday, thing could play the other way.  This is why we need to understand and study the behaviour of indicators within a certain range or level outside of price.  Do not be concerned about price too much...

Yesterday I noted that we are still in a bear market shown by the ST, and also shown on the right column.  Due to the rally we are expecting, it would only be a corrective rally until it was confirmed regardless of how many supports or moving averages holding up the price.  Therefore any trade going long is a counter trend, and from my experience counter trend trades very often get left behind due to the momentum and volatility occurring in main direction.

Nothing is holding prices right now and the next level of support is the 200 day MA again that held support during the last low.  This time around the 200 day MA is at 2063.  If this holds,  it would be bullish in some ways because it would cause a higher low of sorts.  Of course we would need to see the structure of the rally off of this support to see if it is a corrective rally or a full on rally.  The divergence we saw yesterday in the ES and SPX intra-charts have been nulled and void with the indicators also making lower lows.  We are not out of the woods since the indicators are still in OS position and the ST well on its down-trending path.

MT: DOWN
ST: DOWN
PA: DOWN

NOTE:  Looking at the Weekly Bar Charts, it seems as though the SPX has put on a bearish engulfing candle.  This is fairly bearish so lets keep an eye next week to see if we can follow it with another weekly red bar.

Keep this cycle in mind as a possibility while we are in a bearish sentiment...

23 Jul 2015 - Hourly Pos. Divergence

The ES hourly chart has put in a Positive Divergence.  This does not mean that higher highs are expected, but we should look for a possible rally.  The fact that the SPX is also showing this in its intra-day chart shows a strong bias for an upside for Friday. Couple these divergences with a 60min support of the 200MA which is also the 75 daily MA and you have yourself a good support.

All bets are off if the signals in the intra-day chart pushes back below the OS range as this usually becomes risky for more accelerated downside move.

I also failed to note above that the ST has turned down.. So I treat this as a scenario of Downside trend with a unconfirmed rally (or corrective rally).  This round belongs to the bears in my opinion.

MT: UP
ST: DOWN
PA: NA

21 Jul 2015 - A Tale Of Two Ticker

Days like today, the indicator does not tell you much of anything when both ES and SPX are in total disagreement even if price direction is the same.  Knowing the sentiment is important, and in the case of the futures chart, it is bearish.. So bearish in fact that the ST pointing down and in OS.  Yet the SPX just entered into its OS range in the intra-day charts.  This is the case where one must look at the longer-term views to gauge which side of the trade has a low risk.. high reward possibility.  It is also why I am still bearish regardless of the rally that has been taking place to new highs for the ES but not for SPX.  I may miss out on this rally but I would rather be safe and confirm the uptrend first.

MT: UP
ST: UP
PA: DOWN

Even our ST and PA are in disagreement today. But it's always the case when we are looking at short term sentiments.  It gets more volatile as you go down to the smaller time-frame even.  So know your comfort zone and stick with a simple chart instead of listening to other chartist tell you that you need 4 or 10 indicators to be able to accurately analyze the markets.

Keep an eye on the 60min. chart tomorrow to see if the OS sentiment is still intact.  If so then lower prices ahead.  An exit says we are done going down for now.

20 Jul 2015 - ES Hits ATH

Futures were out of the gates early and hitting and surpassing its ATH.  The SPX though is lagging, but is just shy of the ATH at this point.  OB conditions creates these types of price action, and so long as it stays within the range, I do not expect any surprises other than upside surprises. 

I am still bearish even with an ATH knocking at the doorstep as the market indicator is showing us that we are in a bearish condition.  This ATH just shows that the markets are diverging.

MT: UP
ST: UP
PA: NA

17 Jul 2015 - A Bullish Close

The SPX has managed a bullish close to end the week.  Nothing is stopping prices from making a new ATH it seems.  However, as long as those "Lower Highs" are in place the bearish scenario cannot be ruled out.  These volatile movements is the most dangerous of all, therefore we need to be open minded to the fact that a turn down can quickly stop a bullish sentiment on its track.  So what are the scenarios, what would you do for each and everyone of those scenarios?

The opinion that I had about the move from late May to mid June as a corrective pattern is and has always been in the back of my mind, and with the moves the last few days, this is becoming more and more of a viable option.  Ultimately though, we cannot lose sight of the market being on borrowed time.

MT: UP
ST: UP
PA: UP

It is always important to note that while I have my own opinion or belief that changes regularly, the one thing that is more consistent in lieu of these beliefs are the signals the charts produce.  If you don't know how to look at it or use it, it is useless.

16 Jul 2015 - Who Wins?

Apparently Greece voted yes on a worse deal than a previous submission that was denied.  Based on the market today, it seems everyone agrees that this was a great deal.  Time will tell I guess..  Bulls were also in the driver seat today breaking above the Gartley resistance we were observing the past few days.  Unfortunately, we cannot say for certain if this move is bullish until we make a HH.

With the Lower Highs dominating the price pattern, we need to be cautious of bearish motives..  The Daily chart has entered OB which is bullish and risk of acceleration, but the intra-day charts are in neg. divergence.  I would like to see the intra-day chart exit the OB range tomorrow and see the daily cross down at the least for a bearish trade.  If the signals stay in the OB range I would steer clear of any short trade until it has broken out of the OB level.

MT: DOWN
ST: UP
PA: UP

15 Jul 2015 - Resistance At 2115

Clearly our Gartley resistance level is having an affect on prices.  Not many consider the .786 ret. as anything significant.  This is advantageous for those who like to enter a good retracement level other than .618%.  With the intra-day charts exiting the OB level.  This would be a good "small" short entry to see if prices can confirm the downtrend tomorrow.  A cross up tomorrow on our signal would constitute in exiting the short position, while an open signal would have us retain the short and add when the signal has crossed below the mid-line.

Greece at the moment is not on stable ground even with the agreement in place as some of the groups are not so sure anymore if bailing Greece out is such a good idea. Add to that the riot now starting in Athens..

MT: DOWN
ST: UP
PA: NA

14 Jul 2015 - It's Gartley Time

We should be looking at the Gartley method again since we are now approaching the .786 retracement that most analysts forget.  Review it HERE. 

The ES is sporting an ABC pattern with the SPX looking a lot more bullish, but this could just be the way the chart is spread out.  Our OB reading in the intra-day yesterday triggered an acceleration today and has stayed in OB.  Therefore it is time to look for a resistance level since we are closing in near the ATH level.

There are two Gartley resistance levels I am watching:
High of 2134.71 to Low of 2044.02 = 2115.31 (.786 ret.)
High of 2129.87 to Low of 2044.02 = 2111.50 (.786 ret.)

Todays high in the SPX is 2111.98, so lets see what tomorrow brings

MT: DOWN
ST: UP
PA: UP

Possible EW corrective count:

13 Jul 2015 - Above 75MA

Prices are now above their  75 Day MA.  This coupled with a shift in ST to the upside is a bullish sign.  I am still bearish however due to our market signal pointing bearish ----------->

Based on the Fib. levels, price in the SPX is hitting resistance at its 61.8% retracement line.  So tomorrow would be interesting to see if the intra-day charts reverse and out of OS.  I will be looking for weak signals for opportunity to short the market and will wait any rally out.

MT: DOWN
ST: UP
PA: UP

Jul 13 Update

Prices shot up overnight due to Greece signing the contract with the devil.  Apparently this is good news...  Nonetheless, prices are now below the 75 day MA.  This is crucial and needs to break above for bulls to have the edge.

I was expecting a lower low scenario, but again any EW must be taken with a grain of salt due to the fact that there are numerous options and counts available to us, and picking one out of more than two decreases the odds of making the right count. 

The 30wk MA has held the support, and the wedge pattern I was anticipating has been negated.  The ST will surely turn UP today barring there is not volatile reversal.

On an EW format one cannot rule out that the bottom we had was a C-wave of sorts, and probably a 4th wave with HH to come.  Again this is just based on what I see forming and just an opinion.  The arbiter in this is our signal which is a better gauge of the direction prices are going.

10 Jul 2015 - Stagnation.. A Road To Nowhere.

With these high volatile seesawing of prices, one needs to wonder if even day traders are making money on this or is it just too risky.  Greece has repeatedly said no, yet is willing to negotiate on nothing.  There is no way out that could end well, and both sides need to face the facts.  China is in a hurt of their own, and many in conclusion that its highly manipulated.  I really just think it's TIME..

Same scenario, same outcome, just a different country if you ask me...

I am still looking for a wedge formation to form to finish off the first stage of this draw down that started in late May.  2040 in the SPX seems to be a good support and could exceed it by a fraction.  Any break of this is a warning sign that markets are on thin ice.  The SPX has closed the week just below unchanged and on that note, the weekly support that it is on right now is right on its 30 week moving average.  The next support I am watching is its 75 weekly moving average just below 2000 SPX.

MT: DOWN
ST: DOWN
PA: DOWN

10 Jul 2015 - Update

UPDATE Jul 10, 12pm:  With the impulsive rise of prices the triangular pattern is in danger of not happening, but with that said this impulsive rise could still just be a C-wave corrective rally.

9 Jul 2015 - Contemplation

Sorry for the late post.. Been busy all day.  I figure we are in a holding pattern and ready to break.  A few days ago before we broke the 200 Day MA.  I drew a 4th wave triangular pattern.  I figured that with the ES pushing up overnight and then down before cash market opened that it was the end of the c-wave 4th.  I have revisited this option and am contemplating to label the break of the 200 Day MA as the 3rd wave.

This brings us currently to the triangular sideways pattern known as the 4th.  In labelling this as 4th, I am assuming a lower low to come but will be quickly retraced again because this would finish of a 5th wave that will complete a 1st wave decline.

Also I am now expecting a wedging pattern to form to complete this wave.  However, the fall from the ATH to mid-June is still not convincing me that it was a 5 wave decline.  This does not matter as we are more in favour of what the signal is telling us over EW.  If it is a complete 5 wave then the scenario above is what I am choosing (See Chart Below For Labelling).

MT: DOWN
ST: DOWN
PA: DOWN

Note: IF ALL THESE COUNTS ARE TRUE AND THE 1ST WAVE IS DONE.  THE 2ND WAVE HAS THE ABILITY TO RETRACE ALMOST TO THE ALL TIME HIGH.  But the retracement should not exceed the ATH or the count is invalid.

8 Jul 2015 - Breaking Bad

Looks like the market is breaking just as we sit on the 200 Day MA.  Prices have closed below this MA and is looking bearish with the addition of the ST turning down.  Seems very volatile, but readers know that we expected this already.  I did however thought that we would get a corrective rally, but I guess yesterday was enough to reset things before another push lower.

We have not made LL in price, but the intra-day signal is at OS, so there is high risk of a lower low.  Remember that I am bearish due to our market signals, so I am not going to risk a counter trend trade to the upside as gaps and accelerations to the downside can leave one with a big hole in the pocket.

MT: DOWN
ST: DOWN
PA: DOWN

With the market breaking, I would assume there will be nervousness around especially from all the articles that are coming out of the woodworks not even a few minutes of the market being halted.

7 Jul 2015 - Possible Bottom In Place

On Thursday, our ST indicator turned UP, and so far has kept this position even with the volatile market the past couple of days.  With that said, we have also seen a positive divergence in the daily chart that reinforces the likelihood of an uptrend.

Prices are now testing the 75 moving average of the 60min chart and should see a pull back tomorrow.  A higher low coupled with a 3 wave pull back would see prices pushing higher.  The ES during the after hours trading yesterday pushed prices up where I had labelled a C-wave (blue).  this did not translate to the SPX by todays open, but prices did push lower to our support range discussed yesterday.  I deem this to be a successful analysis to say the least.

Now we will see if this bottom made today is a C-wave 4th or a sub-wave 1 of sorts.

MT: DOWN
ST: UP
PA: NA

I still remain bearish with the Market Signal still in Bearish territory (See 2nd Chart)...  So I am considering this push up as a counter trend reaction or until I can find an indication of a CIT.

BULLISH / BEARISH WARNING WATCH...

6 Jul 2015 - Looking For A Push Lower

I am looking for a push lower in the near term, but we could be waiting for a possible triangular pattern to form before that lower low occurs. At a minimum it would need to be an a-b-c pattern.  I do however suspect that the March lows will be a support zone, and could produce a bounce in SPX price.

MT: DOWN
ST:  UP
PA: DOWN

I would like to see the Intra-day chart turn back up above the OB reading to have this pattern I drew up, have a chance in happening.

2 Jul 2015 - Stagnant

The SPX has pushed up in the morning but was met with an equal push lower.  By the end of the day prices stayed stagnant, closing just a few pts. below yesterdays close.  The ST however has turned, and even if this is a signal of the rise, I am now looking for opportunity to enter short to the downside.  So far though since July 30th prices seem to be sporting corrective moves.

For prices to turn bullish the intra-day signals should stay above OB, with the daily signal pushing above the mid-line.  If prices push lower to OS or past the mid-line of the intra-day chart, this would be my indication to go short.

MT: DOWN
ST: UP
PA: NA

Monthly Chart Shows Possible Down Trend Beginning: (Possible months in duration)

Cycle Composition: (Possible chains to watch)

1 Jul 2015 - Holding Strong?

The 200 day ma, regardless if prices have touched or not has been a factor the last few days.  The fact that prices are hovering right above it, is an indication that the market is aware of this and it could be our clue to a switch on (sell it) switch off (buy it).  The indicators when at OS usually shows a habit of accelerating and at this point prices have just stayed stagnant or have rebounded.  Perhaps there is still a chance for the acceleration since the SPX is still in OS territory.  But if the signal does exit the OS then the risk is higher for a rally for the markets. 

We need to assess these sentiments day by day due to the volatile nature we are in.  Therefore I would like to see the intra-day chart push below the mid-line tomorrow to favour a sell side, with an OS entry to carry momentum.  If the signal does push higher into OB..  We would need to take our gains from previous days and wait for the signal to turn bearish once more. 

I remain bearish due to our Warning to the right of this blog and because of our MT and ST being in a down position. 

One thing to note is that the monthly chart has now also crossed out of OB.  this is significant in that the last time it was below the OB range was almost 4 years ago during the 2011 drop.  On a longer term basis, this is months.  Playing the long side is now a counter trend move.

MT: DOWN
ST: DOWN
PA: DOWN