31 Mar 2016 - EOM Closes Bullish As Expected

The likelihood of an ATH is a high risk.  We did not see a move lower in price and a move into OS range which could push prices in an impulsive manner.  It is not to say its certain, but the chance doesn't favour the bears at the moment.  This April month will be key to seeing if the candle will churn out a bearish look.  The upper BB line for the SPX is now at 2151.32.  The typical view of the top would be to pierce this level and close below it.

My personal view is that a top of sorts has been put in, but this is a personal bias.  The indicator is still up trending and bullish, therefore we must keep the course.

SEN: Bullish
ST: UP
PA: NA

The intra-chart seems to be forming a corrective price pattern, so I would say based on EW that there is another leg higher which would fall in line with the ST.

These monthly views and analysis has only one other chart or sector to contend with which is still bearish, and that is the financial sector.  It is never a good thing when the financials are the weak one out of the bunch, and it's usually not a good combination.

30 Mar 2016 - Monthly Clues To ATH

The markets seems to be on edge and there is a lack of trust for a bullish conviction.  Yet looking at the monthly chart, it has stayed bullish while putting in a divergence.  There us a strong sense of an ATH that could occur in the near future with the monthly closing tomorrow at OB and a bullish monthly candle bar.  While bad news after bad news comes out, the market might just be fine with it and march higher.  While the monthly chart is not so suitable for immediate direction, the ST however is a good compromise for swings regardless of short -term lags.  The fate of the monthly chart making new ATH will depend on the ST going into OS (bearish) or OB (bullish) acceleration phase.  These moves will get us further away from the ATH or closer to breaking above the ATH.

Therefore watch the ST intently.  While I feel bearish, it is always safer to stay with the indicators and its sentiments.  The intra-charts suggest a high is in along with a daily double divergence, but will have to be confirmed by the ST to turn DOWN.

SEN: Bullish
ST: UP
PA: UP

29 Mar 2016 - ST False Signal

Well it happens, but very rare in the span of a few weeks to months do our ST give out a down trending signal only to be reversed the very next day.  A 17 pt. move can do that unfortunately.  The PA has also turned up, meaning that potential for acceleration is to the upside as well.  No doubt the Bulls are not giving up.  As I see it though, every time an ST gives out a false signal it is usually followed by its last gasp push either for a lower low or a higher high.

Prices have broke above the green dotted channel line and is being halted by the red trend line that was formerly the top resistance line of the wedge channel.  There is a few EW count that is available to us for speculation of the progressing pattern (See 15min. chart).

SEN: Bullish
ST: UP
PA: UP

28 Mar 2016 - Nice Daily Indecision

The ST is now downward trending, and the daily candle has also sported an indecisive candle.  Today's high in the SPX also tagged the Gann angle from below but not exceeded.  With the sentiment being at a Bullish stance, prices trending would need to look at pivot lows to see if we can get higher lows to confirm the bullishness or lower highs for a clue that the bears are currently in for a rundown.  SPX 2000 to 1980 is the level to watch for intermediate support, but would need to overcome the 2016.65 (200 day MA) SPX support beforehand.

SEN: Bullish
ST: DOWN
PA: NA

24 Mar 2016 - Resisting The Down Trend

The expected 2026 area support held up throughout the day.  I don't know if this will be a temporary or mid-term support, but judging by today initial push down, the ST was at the verge of indicating a change.  The rise up from today's low also did not indicate a 5 wave pattern clue to a possible new count higher as it closed the day with a 3 wave pattern.  I can only speculate that if this 3 wave pattern indeed is it, then another sub-wave set lower would eventually play out to complete the corrective move to , or that this impulsive lower today did not fully show its intended count which could be a bearish i-ii, (i)-(ii) and (iii) next.

SEN: Bullish
ST: UP
PA: NA

Notice that the channel (Green Dotted Line) has been broken and price pulled back to test the trend line it just broke today.  With the intra-charts still bearish, we should look for a distancing of the price lower away from the trend line next week.  This however needs to be confirmed by the ST when it turns DOWN as well.

Possible EW count:

23 Mar 2016 - Outcome Of Typical Move

Are we out of the woods?  ST shows market is still UP biased, but today's move was typical of an OS and bearish intra-chart.  This would have implications to the ST if signals stay in this condition through tomorrow.  Price needs to distance itself from the pivot or any reset will give potential for a higher high in price to come.  If this is a corrective pull back, I would expect 2026 - 2024 as the support zone for a=c target.

SEN: Bearish
ST: UP
PA: DOWN

22 Mar 2016 - SPX Giving Clues It's Turning

The intra-charts in the SPX is giving clues for a turn, although our ST has not shifted its views, the cracks almost always shows itself first in the lower time-frames.  These signals have now come off their OB level, and will watch intently for a bearish sentiment to begin the positioning of any downside bias trade.

This does not mean we can't make new highs, but it does tell us that momentum is shifting.  Therefore early or not, it's up to you as the investor to weight the amount risk and trade before the confirmation is had.

SEN: Bullish
ST: UP
PA: NA

21 Mar 2016 - Not Giving Up

My thoughts of this rise is pretty much a formality if the market is indeed turning lower.  This would allow the weekly to show some tail on a reversal candle with a long negative body.  Of course we would need to wait till the end of the week to confirm this, and we just started the week, so there are plenty of time to prove me wrong.  I am not saying that this is a certainty, but more of a possibility to watch for.  Today could be the end of the run up, as the patterns seem to have made a diagonal triangle, but without any of our signals confirming we really are just speculating.

On the last blog, I discussed the fact that our "Sentiment" has turned bullish, and so again I cannot stress enough to stay cautious on both ends of the trade as the signal sits near the bull / bear territory.  It's easier if we do get signals close to extremes which allows us to distance our trade from any negative effect.  This is why ST's and PA's are a very important part of our strategy.  Initial trades that have a possibility of price running are ideal, so that any pull back still give us room to be patient with our position.

The 60 min. chart has now put in another neg. divergence, and pushes closer to a reversal.  Although not a sure thing it does increase the chance of one.  So we will wait and see if we can get an early ST signal for a sell trigger.

SEN: Bullish
ST: UP
PA: UP

18 Mar 2016 - .786 Retracement Major

For Fibonacci followers this is the deepest ret. before a reversal.  Most know this as the Gartley Ret.  Today, we hit that Ret. at 2050.  The rally is mature, but it does not confirm a sell just yet.  Our ST is still on an upward bias, and need to respect this as can be seen on the chart below when the ST signal was triggered in mid February.  The neg. divergence in the daily chart is also still in place giving the bears some hope that the market should turn soon.  The market has closed with a "Bullish Sentiment", and so we need to be cautious of being short or bearish the market since the signal is just positioned on this thin line that separates us from being bearish or bullish.  The ST needs to push back down and into OS for the Sentiment to turn back to Bearish, so what this means is that momentum needs to make a impulsive move down and sustain that move.

I will update this in the next few days and weeks to see if we can get a clue to the seriousness of this "Bullish Sentiment"

SEN: Bullish (Cautious on any trades here)
ST: UP
PA: UP

Note: EWI and Cycle analyst are calling for a potential setup for a stronger, prolonged and impulsive move to the downside, and so I stress that caution should be taken even though there is no SYNC in our case to be DOWN in trend, acceleration and sentiment.

17 Mar 2016 - Gap Fill

SPX managed to fill the gap made at the beginning of the year.  Maybe it's psychological to most, but it does not have to be closed as there a few still exposed as prices rose throughout the past few years. It is incredible to see that after a tumultuous start to 2016 that we are just under 100 pts away from the ATH.  The bearishness has almost disappeared, and is in the verge of turning into a bullish trend.  If in the event that it happens, I would be "Cautiously Bullish".  This means that I would trade on the long side but with a smaller position than normal until the Bull trend produces strength.

But lets not get carried away, as the sentiment is still bearish.  I do not see why we couldn't close this week in a bullish trend, but things can turn around tomorrow.  Also notice that the wedge resistance line (red dotted line) has been exceeded.  In EWI's views this would be a typical throw over.  This also has to be confirmed with a push back below major support lines.

SEN: Bearish (Risk of turning Bullish)
ST: UP
PA: UP

16 Mar 2016 - Open Minded

The recent moves the past few days was your typical overlapping corrective move.  So, it goes to show that regardless of my observations that markets would fail to make a higher high, that in the end indicators prevailed.  I tweeted today that base on the zigzagging nature we would not see a new high, but that the FED might re-work that bias.  I can never say that I am absolute in my thinking or analysis, and how can I? I'm not smarter than the market.  What we do here is to increase our odds and lessen the risk involved.  Without this mindset, I would have never entertained an idea a friend gave me today that saw me looking at trading the same strategy but with a clever tweek.  So I cannot stress enough the idea of an open mind in this profession.

While the SPX moved back above the 200 day, the divergence in the daily chart still exist, and this might be a hint of the next move.  We know that not all divergence do come to fruition, but we would need it to play out and nullify itself from the equation.  The uptrend wedge I have drawn is still respected by price and is now closing in on the 2035-2040 area many cycle analysts are targeting.  Aside from that, we have the .786 ret. near the 2050.  These targets puts the index at extremes, and either it breaks out or fails hard.

In my assessment of the patterns, a slide would only occur once we can confirm a break of the 1970 level which is drawn in Green dotted line.  It is a far drop for a confirmation, but again we are not looking for an absolute top or bottom, but to get the majority of the run, just like the last UP signal from the ST.

SEN: Bearish (closing in on Bullish trigger)
ST: UP
PA: UP

15 Mar 2016 - First Round Goes To The Bears

Closing under the 200 day has a psychological relevance to the trading community, and even with the rally at the end, the day still belonged to the Bearish camp.  Ultimately the SPX needs to break 2000 - 1990 to have a more pronounced impact on sentiment.  The SEN indicator is at risk of turning bullish, so Bears must also be cautious of the possibility that a bullish turn can happen.  An approach to the .786 Ret. level is also possible, so if prices break higher I will have to consider wave-e (red) as a sub-wave-i of v (blue) extending the count to fit the scenario, and possibly ending the pattern as and ending diagonal so that the channel and wedge pattern we have drawn can be retained.

SEN: Bearish
ST: UP
PA: UP

14 Mar 2016 - Snagged At 200

It's only been 2 days since the SPX has touched the 200 day MA, but we shouldn't expect any less from this line.  It is most watch by many analysts, and it should retain some resistance here.  The problem now is to figure out if the divergence on the daily chart will confirm a turn-a-round or lose its divergence as price crosses above the moving average and continue marching higher.  Both scenarios are valid, and only one will prevail.  Bulls will want to terminate the divergence and keep the signal in OB, while the Bears will want to remove itself from the OB condition with the divergence intact.  Unfortunately, these levels are not a trade opportunity rather than a gamble.

SEN: Bearish
ST: UP
PA: UP

If anyone is looking at the Gartley Method, the .786 ret. value is at the 2050 level.  This would also close the gap on the SPX cash chart which you can see in the 60min chart below.

There is both a wedge (red dotted line), and channel line (green dotted line) in progress.  Breaking these two patterns would give us a clue to an initiated CIT signal.

11 Mar 2016 - Level Hit.. Time To Pay Attention.

The SPX has now reached my intended target of 2020 and has exceeded it to close above the 200 day MA for the first time since the close of Dec 2015.  Yes this is quite a bullish feel, and it may just turn out that way.  But we are now at a decision point for the bears to see if they would even challenge and turn it around on the bulls.  This level is my turn-a-round point, and a negative divergence forming today, it adds to the cautious view that the bullish feel is potentially ending.

For those Bears out there, the line to beat is now the Feb. lows, which needs to break for a confident bear raid.  If this is not broken then a possible push to ATH is possible.  I would look to take profits now and latest if the ST signal turns south.  The EWI community is counting this as a sub-wave (ii).  This has them looking for a acceleration down and expecting a break of the Feb. lows that I mentioned above.  If this low does not break then the high that is currently forming would be counted as a first wave of sorts and this implies that the move up will be for the ATH.

The steps I am looking for is for the ST to turn DOWN, then enter OS to confirm that the bears have taken control and LL to come.  Without the OS conditions with market levels we are currently in, there wouldn't be enough momentum or strength to push prices for a run-a-way move to the downside.  This is the most important note to take.

I am bearish based on my "Sentiment" indicator, so this is my line in the sand and I'm on edge.
While there are some calling for the 2035 - 2040, it would be foolish to wait to lock in gains with a few pts. separating the target to current level.  If you are long and bullish the market, this would be a good idea to sit on the sideline and wait to see what happens with the next formation before re-entering.  This is just my thought process, not an advice / recommendation.

SEN: Bearish
ST: UP
PA: UP

10 Mar 2016 - Reversal In Which Direction?

Today's move lower almost had us see an ST change to the downside, but prices didn't stick to the lows.  Instead SPX rallied impulsively into the close, ending in positive territory.  The daily low did pierce the 75 day MA and bounced to gain back the support above.

With the recent overlapping and corrective pattern, I would like to see at least a 3 wave decline into the 1958 region.  So far we saw an impulsive move when markets opened that we could label as wave-a into 1970 lows (not shown), and a rally perhaps into wave-b (might not be done).  With that said, a move lower from todays end of day rally high could put us in an a=c sub-wave into the 1958 low I discussed above.  This would also move our diagonal support angle higher.

Remember that the risk is still to the upside, but momentum is getting weaker.

SEN: Bearish
ST: UP
PA: NA

9 Mar 2016 - Hard Count

It's hard to say if the top is in or not.  From the looks of it in the intra-charts, you can see price swaying up and down overlapping each other characteristics of a corrective pattern, but it also can be a sub count of 1s and 2s.

The best scenario I can see happening here based on EW and signals would be for price to continue lower into the 1970 area and then bounce and try for the 200 day MA.  Yes, I'm still inclined to see prices through to the 2020 area.  With the OB situation, the risk still favours more upside, and until the signal removes itself from that range, I cannot discount the higher price option.  With the signal trending down, I can also see a push up as a setup for a negative divergence on the daily chart.  Watch for this as it might just signal the start of the CIT.  If prices continue lower breaking 1970 then I would start looking for lower lows.  If one is to look at the Fib. retracement (blue) from yesterdays chart, it would show that price has met its a=c (from 1890 lows) target which coincides with the larger (a=c blue).  This is the bearish view that all is done and moving lower impulsively, but we have yet to see a confirmation.

I would also like to add a count of a-b-c-d-e (red) that could form to be a diagonal and allowing us to reach the 200 day MA.  But before this happens, I would like to see d-wave form to the downside perhaps to 1940-1930 SPX.

SEN: Bearish
ST: UP
PA: UP

8 Mar 2016 - Proved Weaker

The SPX is proving very weak.  It is in danger of pushing lower negating my expectations for a 200 day MA target.  If this is so, then it would fool a lot of people who were looking for the 200 day MA as a selling point.  The question is, how much are longs willing to risk for that target if it does not get hit.  I think the best recourse here is to reduce exposure even if you have a "GUT FEELING" that price will still meet its intended target.  I for one am not smarter than the market.  Since the intra-charts are in bearish territory, I will have to be cautious of any upside, and by all means we are still capable of moving higher since we are still in OB range.

Remember that we are not about the absolute lows or absolute tops..  The signal for the ST that turned up in mid-Feb. was not an absolute low, but it still pulled out decent gains if you were to trade to the long side or just covered your short and waited the rally out.

SEN: Bearish
ST: UP
PA: UP

Mar 7 2015 - Final Stretch

Today's end of day dump and pump seems to be the start of the last leg up.  This is the only explanation the impulsive moves that have been occurring today.  EW can explain this with b-wave move up from the morning lows then down for a c-wave move to end the corrective sub-wave move. With the equally impulsive move higher we could only speculate that this is the move that will take prices to near the 200 day MA.  This should not be considered an absolute, but a higher probability that sync's with our signals. Without the intra-charts going into bearish or OS, we cannot say for certain that a change in trend has occurred.  I always us this method to lessen the chance of a fake out when things seems to be turning or weakening in the current trend.

SEN: Bearish
ST: UP
PA: UP

4 Mar 2016 - Are We At A Precipice?

The daily SPX chart has formed a doji which can be seen as a reversal.  This again cannot be taken as certain all by itself.  Price is now merely a few pts. away from touching the 200 day moving average, therefore I would not want to speculate that we are now at a CIT.  While the weekly chart is bearish, we are still trending UP.  This needs to turn down for a longer trend to take hold.  With daily signals, we can only expect them to last a few days to a week.  It would be more reassuring to know that at least a longer term signal is supporting our convictions for a prolonged down trend.

Regardless, a reaction in price should happen sooner than later, or the Bears will be looking at a lost opportunity straight in the eye, and the Bulls will once again control momentum. Could it be that we are finished with a sub-wave 4th and this rise will take us to new ATH for a 5th?  It is possible, and it can happen, but we must also side on trend and sentiment.  Make no mistake that we are still in a Bearish market.

The move in the SPX in recent weeks has fulfilled my expectations, and we are now at that decision point where markets must decide whether to go all-in for the upside or err on caution and turn right back down.  Unfortunately, news and reports are not accurate or reliable to tell the truth about the condition of the market(s).

SEN: Bearish:
ST: UP
PA: NA

3 Mar 2016 - Bears Huffed And Puffed But Couldn't Blow The House Down..

The SPX and ES tried twice today to enter Bear territory, but was bid up.  It looks like the 2000 target will get tagged.  Will it stop there?  We will have to see of any confirmation for a downward reversal signal when price arrives or whether this is a full on Bull run and we just didn't see it coming.  If it is, there is no need to worry because we are not after absolute tops and bottoms.  We need to always play the highest probability outcome as much as some who disagree with the method.  It is what has kept this blog consistent in showing trend.

The EW count that I have, does not show this move up as some have been calling it, a fourth wave.  At best, this could be a sub-wave 2 or a B wave.  The next count for these two options are either a sub-wave 3 or a C-wave.  Both of which are expected to be impulsive (simply put).

We just need to see this rise play out and trade it to the downside once we get a confirmation through our ST and PA.

SEN: Bearish
ST: UP
PA: UP

Note:  I have various levels that I am watching and I cannot rule out 2020 as I said in yesterdays blog.

2 Mar 2016 - 20 / 20 Vision

Is it a clear view for the SPX that the next target is 2020?  From where price sits, there are no other moving average to stop it on its tracks.  The only one with the only chance is the 61.8% ret. at 2000.  So now all we are really talking about is a difference of 20 SPX pts.  Seems like 20 is the number that has been on notice.. 2000, 2020.. etc..   Maybe we might get a 20% correction here then? LOL.

The intra-chart has now formed a small neg. divergence, but as we know divergence is not a certainty that a trend would happen in and of itself.  The risk of more upside potential is still there, but the risk has abated from when prices were at or close to the previous lows.  While I believe that we are nearing a top or resistance, it is prudent to wait until we get confirmation.

Our ST has again been a very good marker, and should serve us to follow it.

SEN: Bearish
ST: UP
PA: UP

1 Mar 2016 - Meeting Up With 75

The SPX has now moved up to meet with the 75 day MA.  Although not many do look at the 75 MA as significant, it can tell you how strong price is by how long it can stay above or below this MA, and often times price can magnet around this moving average.  So are we done moving up?  My answer would be "I don't think so" based on the fact that we are still OB, and up trending.

The futures market initiated a bullish signal this morning at 3:30am intra-day.  It is hard to see and act on this when the move comes overnight.  This is why I reiterate always trading with the trend and confirmed signals.  There is the H&S pattern to watch for and is in line with the previous top made in Sept 2015.  If this trend angle is of importance or dominance then price should find a strong resistance here or the next move is towards the 2020 level where the 200 day MA is currently parked.

SEN: Bearish
ST: UP
PA: UP

I am looking at a weak case if prices fails to push above 2000 SPX, but a strong case if it does and should reach the 200 day MA.