Jun 16, 2012

Weekly review / Седмичен преглед

Short term view - next week more on the upside.
Intermediate term view - intermediate term bottom reached higher prices in the next months.

Positive week as expected. The news about the Spanish banks receiving 100 billion cause a huge gap. The futures hit resistance ~1345(the market opened lower) then we saw a pullback and a move higher to resistance again, which was the yellow scenario from last week.

What is next? I think the move on the upside does not look finished. One more push up is missing but we are nearing the top for this swing.

Short term - the prices are moving in a wedge. With Greek elections this weekend we can see a gap again. I have two scenarios - the indexes exploding higher after a positive news and start working on a top, or a move to the upper boundary of the wedge, pullback to support ~1330 and the lower boundary of the wedge, than moving to ~1360-1365 to mark the top for this move.
The support level is around ~1330 which should not be broken or the move on the upside is over. The MACD and the histogram will tell us when the moment has come (the top for this move) - we will see the divergences. There will be a tradeable move only if we see a pullback.
The bigger picture - There is no signs of reversal for now, MACD we will reach probably the zero line, the histogram still moving higher. But the prices have reached serious resistance - MA50, 50% Fibo retracement, resistance level, the upper boundary of the channel. That is serious cluster of resistance. So when I look at the previous chart and this one, I think we will see higher prices but this event will be short living something like fake breakout before the price fall back in the channel again. Then I expected a correction to around ~1300. The alternate scenario, which I keep in mind (explained it last week) new lows ~1250.

Most of the indicators are in buy mode supporting the move. Nevertheless I will wait for a pullback.
McClellan Oscillator - positive above the zero line
McClellan Summation Index - in a buy mode
Weekly Stochastic of the Summation Index - in a buy mode
Bullish Percentage - issued a buy signal
Percent of Stocks above MA50 - heading to the 50 level, supports the move on the upside
Fear Indicator VXO - it looks like it topped at 26-27 level
Put to Call Ratio - no useful info, back to more normal values but still very high.

CYCLES (TD - trading days)
The 20 day cycle reached the middle of the cycle 10 days. The last one was shorter so probably this one will be longer 24-25 days. There is still 2-3 days on the upside which fits the technical picture. The low for this small cycle will be the low for the 20 and the 40 week cycle.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
SP500 almost made it - a setup:) The bar which should be 6 closed at 1314,88 and the bar 4 days before it closed at 1314,99 so the setup was invalidated. This technique says one more low is missing..... or I can close my eyes for 0,11 points and say we have a setup on the upside:) I am in a wait and see mode for now.


  1. Think you have pinpointed the development fairly well. However I am very negative to the development into summer.

    1. I think the Summer will be Ok not a great bull run but choppy upward move