Dec 22, 2011

Enjoy the holidays

No surprise for now, pullback and crawling higher.
Do not get too excited and bullish, the 20W nominal cycle should make a top next week and this move on the down side will be much stronger.

I have a holiday break two weeks... I will try to post something, if I have time. Next review probably on the 8-th of January.
Enjoy the Holidays, Merry Christmas and Happy New Year.
Spend more time with the family and the friends. There is plenty of time to trade:)

Dec 20, 2011

Short term update

The weekend forecast looks right for now - negative day or two and a bottom around 1200.
Now we have a lower low at 1202 with divergence and a strong reversal.
If I am right in the next two weeks we will see something like that shown on the chart.
Resistance is 1300-1305, previous move was 108 points added to 1202 is 1310. So watch this area.

Dec 17, 2011

Weekly review / Седмичен преглед

Last week I was expecting more on the downside and support around 1220-1225... SP500 closed the week half a point bellow 1220. The problem I see - more weakness than expected(we saw a low ~1210) and it lasts longer than expected. The bigger picture has not changed a lot but all this means less time(see the last chart) and weaker move on the upside.The chart bellow is adjusted accordingly.

The move from the October low does not look complete... at all. Besides the sell off looks like a slow bleeding and is awful with a lot of overlapping or with other words correction. The white lines show the move till now and one more move is missing. The highest probability is the yellow line minor new high above 1292. Another option is triangle. I do not like it but it can not be excluded at the moment.
Current thoughts - bottom early next week and rally till the end of the year with a top between 1292-1305.
I have downgraded to low probability the oder option for a higher prices:)

A closer look at the hourly chart - the last moves on the upside look corrective (bear flag). There is no signs of a bottom forming at this moment, so probably another negative day or two. Target is the 1200 level which is 61,8% Fibo retracement and support level.
The unexpected - on the daily chart the last two candles were inverted hammer. If we see surprise on Monday gap higher and a strong day it will be a nice candlesticks formation for a bottom.

Next week the smallest cycle should hit a bottom (28 trading day Hurst nominal cycle, around 20 days for SP500).
The next bigger cycle should reach a top the last week of December.Target 1295-1305 all resistance levels converge in this area.
The important one, the 20 week nominal cycle - since March 2009 it lasts 15W-16W for the SP500 and the last 3-4 weeks are sharp corrections. So after a top I expect a sharp sell off into January with a bottom the last week of it.

Dec 15, 2011

Short term update

No bottom in sight.... On Tuesday most of the blogs had the same charts as mine from the weekend so I am not surprised that the outcome will be something else. The market stays consistent and surprises the herd.
Nevertheless weakness is weakness some kind of a rally can not be excluded but my target is now lower between 1277-1292 minor tops.

Dec 12, 2011

Short term update

My intuition did not lie to me:) Waiting for some kind of a bottom. Worst case it should be above 50% retracement ~1215 which is 31x1.618 projection too (see the hourly chart from the weekend bellow). If SP500 break bellow it I have to revise the big picture.

Dec 11, 2011

Weekly review / Седмичен преглед

Not much of a surprise this week... a little bit stronger than expected and the pullback occurred on Thursday.

The big picture has not changed. I expect the indexes to move higher in the next two weeks and form a top after that. Targets for SP500 1305-1320 or 1345-1350.

For the short term.... I do not know. It feels like the third leg of a pullback to the MA50(daily see above) is missing. Projecting the first reaction 31 points gives us target around 38,2% retracement and strong support ~1225. I will trust my feeling and wait to see what will happen on Monday and Tuesday.
Or we already saw the low for the pullback I was expecting. I can not exclude this option.

Dec 6, 2011

Short term update

Hourly chart adjusted.
We saw higher prices this week but the candles have long shadows... which is not very good. SP500 has touched resistance, 38,2% lies now ~1225, EMA50 ~1221, MA20 ~1226, the middle of the Marubozu candle ~1222.
The 1220-1225 zone is getting more and more important for the bulls.

Dec 4, 2011

Weekly review / Седмичен преглед

Well strong week, the reversal was not a surprise but the speed was. SP500 hit my first target for 3 days - 3% gap and 4% panic buying.... definitely you will not see such moves often. So I raised my target - 1300 to 1320

The adjusted plan looks like this - 2-3 days pullback which should find support at ~1220 and then continuing higher to the target zone 1300-1320 (it depends on if want to include or exclude the shadows for this trend lines).
Alternate scenario is going even higher.If you project a measured move the target is 1376 or challenging the last high at 1370, but everything with the time... step by step lets see first the pullback and then the speed of the move after that.

Closer look at the hourly chart and possible path of the next moves.
1220 is very very important level - 38,2% Fibo retracement, support, test of a broken trend line, the half of the 4% Marubozu candle from Wednesday.
When you have such strong day 4% and Marubozu candle(candle without shadows) subsequent pullback should not exceed half of the candle. You have a panic buying and buyers should stay buyers and not sell their positions. If the price closes bellow the half of the candle there is very high probability that this was a fake move. The numbers from Wednesday low 1197, high 1247, candle size 50 points,the half is 25 points or the line in the sand is 1222.
If SP500 close bellow that level,cluster of strong support, the next target is 61,8% Fibo retracement and support level ~1190-1195. That will mean weakness and any subsequent rally will not reach the target, probably will stall at the previous minor highs ~1270-1275 or ~1290.