Mar 29, 2012

Holiday :)

I will be in a vacation in the next three weeks so no updates till 22 of April.

Weekly review / Седмичен преглед

Toping is going on.. ups and downs:)

The technicals look bearish so the bearish scenario is shown on the firs two charts.
Probably several down days and break of the wedge followed by lower high.

The other two charts suggest a little bit more bullish action.
The countdown reached 12 and the combo is at 11 so we need 13 to finish the counts that means one more push higher.

Cycles - the 20TD cycle is 17 days old so we will see a short term bottom today or in the next 2-3 days followed by a move higher.

Mar 25, 2012

Weekly review / Седмичен преглед

Short term view - short term bottom next week.
Intermediate term view - topping process into early April and correction lasting till mid June early July.

The histogram is pointing down, I am expecting SP500 to hit support and the lower channel line of the wedge around 1375-1380 followed by a short living rally. Multiple point of divergence on MACD I think the move since October is topping.
The topping is a process it needs time so be patient:)

Short term - on the hourly chart the histogram and MACD are pointing up so probably 1 or 2 days on the upside then we finish the pullback. A reaction of the same size 38 points like the last one, points to the support area 1413-38=1375.

McClellan Oscillator - I think we will see a divergence with the next move lower and a short term bottom next week.
The longer term indicators show divergences so I think the move from October low is topping.
Bullish Percentage
Percent of Stocks above MA50
Fear Indicator VXO

CYCLES (TD - trading days)
The 20TD average cycles is 13TD old. I think it has several more days to go. Cycles are supporting the technical picture - short term bottom next week.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technic spots areas of exhaustion.
Sequential within Countdown finished, but bar 9 is lower than bar 7 so one more push up expected.
Countdown and Combo reached bar 10 so unfinished business on the upside till we count 13 bars.
So this chart tells me there will be one more push up.

Mar 18, 2012

Weekly review / Седмичен преглед

I will start posting more information, different trading methods, for example Cycles or Demark Sequential and Countdown. I think this methods have their added value and could be helpful. Technical Analysis will stay my primary tool, but I think combining it with the other technics a trader could take better decision. I hope this way the blog will be more interesting.

So I was expecting a pullback and a new high for a long time... there we have it:)
I though the pullback will last longer and it will be deeper... but the market made its choice. In fact it was my mistake. The whole move during February the slow grinding sideways/higher was a stealth correction with one day climax sell off. The whole time the indicators like the Histogram and RSI and the market breadth indicators were saying "correction correction..." but I did not noticed it.

The question is now what? - This is the last move higher before a serious correction lasting till mid June or early July. I can not say when it will begin, but we are very near. If you look at historical charts you will see that March is an inflection point - a top or a bottom. Obviously now we are not at a bottom.
This correction will be very important. I think it will tell us what to expect for the year(see the last chart).

MARKET BREADTH INDICATORS (I will post only the links, because the charts will become too much)
They are looking very ugly and does not support the breakout and the new highs.
McClellan Oscillator - stays bellow zero
McClellan Summation Index - continue moving lower
Bullish Percentage - does not make new highs
Percent of Stocks above MA50 - triple divergence
Fear Indicator VXO - screaming danger, too much complacency

In the short term the prices will continue crawling higher...

Intraday - the histogram is bellow the zero, probably short move lower before seeing higher prices.

This technic spots areas of exhaustion.
Short term - more upside.

The big picture higher highs in the next 3 weeks will mark 13 for a Combo and exhaustion.
T-theory - areas of weakness match time-wise areas of strength. Target was reached.

CYCLES (TD - trading days)
The last 20 week cycle was much longer than the average for SP500. The last one was 106 trading days(5 weeks longer) and average is 85 trading days(16-18 weeks).
The projection of the next cycle points to the end of June. July is inflection point like March and marks a top or a bottom. So watching end of June early July.
The short term 20TD cycle says the index has still time to move higher.

The big picture - the 54 month cycle(known as 4 year cycle) is pointing lower into the first quoter of 2013. That is why I think the upside is limited. That does not mean huge correction, the indexes could move sideways. The next chart shows possible scenarios.

Weekly chart of Dow Jones. The correction will show us the path for the rest of the year. For now the highest probability has the bullish scenario and lowest the bearish scenario. The turning points are corresponding to the cycles turning points.

Mar 10, 2012

Weekly review / Седмичен преглед

Strong bounce but looking at the market breadth indicators tells me that the pullback is not over.
McClellan Oscillator - oversold bounce was expected. Next move lower will produce divergence.
McClellan Summation Index
Weekly Stochastic of the Summation Index - says the move lower is not over.

Current thoughts - one more leg down with target around 1320 followed by higher high.

Closer look at the 60min charts - alternate scenario can not be ruled out. If the prices find support around 1355 and start moving higher then the pullback is over and next target is around 1400.

Mar 6, 2012

Short term update

Surprise surprise - two weeks ago I wrote - "With such slow motion one red candle could wipe out the gains from the last 2-3 weeks."
Here we are one red candle 1,50% and last 4 weeks gains wiped out. As I said market breadth indicators look awful prices grinding higher - perfect recipe for a sharp and short living sell off.