Feb 9, 2013

Weekly review

Short term view - more on the upside, the trend line currently around 1525.
Intermediate term view - after this short term move finishes an intermediate term correction should start.
Trading system signal (swing trading) - Direction: UP | Last entry signal: at SP500=.... on xx.xx.xx | Stop at:

Eventually we have higher high as expected - 4 points for the week:) but after a lot of fake moves up and down. On Monday we saw huge red bar closing bellow the Friday's bar and I thought that a correction has begun, the system generated signal which was later negated (5 points loss, not a drama). I have to mention that DJ is red for the week and the correction for the DAX has already begun but short term all three indexes point up.

For the next week I expect to see higher prices. Target is at least the trend line on hourly chart ~1525. After that the correction should begin.
The charts are bellow nothing has changed just more divergences....

Short term - more upside expected. The trend line is adjusted a little bit higher and a move up will touch it around 1525 +- several points.
- Triple cross(EMA10 and EMA20 crossing EMA50) - the EMAs are still pointing up so the short term trend is up. We have MACD divergences so we must watch out for a reversal.

Intermediate term - nothing has changed... I still think that in the the next several weeks we will see a correction - target between 1430-1450 which is support/lower wedge trend line/38,2%-50% Fibo.
- Trend direction EMA50/MACD - MACD starts pointing lower it smells more and more like correction. Prices are above EMA50 and MACD above zero so this should be a correction in an UP trend.
- Momentum Histogram/RSI - the histogram is bellow zero with divergences and RSI made another lower high.... momentum does not look good.

Long term - no change, expecting this wave to finish and correction for several weeks.
- Trend direction EMA50/MACD - MACD above the zero line and price above EMA50, the long term trend is UP. Quadruple divergence on MACD watch this veeeery carefully.
- Momentum Histogram/RSI - RSI and the histogram are pointing higher and momentum is UP.

The Market Breadth Indicators - no change - in overbought territory but no sell signals. Some early signs of a trouble are the VXO divergence and Percent of Stocks above MA50 and McClellan Oscillator making lower highs.
McClellan Oscillator - another lower high, another divergence.
McClellan Summation Index - flat for second week, no sell signal yet...
Weekly Stochastic of the Summation Index - issued sell signal, waiting for price confirmation that a swing lower has begun.
Bullish Percentage - flat for several weeks, no sell signal...
Percent of Stocks above MA50 - making lower highs...
Fear Indicator VXO - higher low and divergence... not good for the bulls.
Put to Call Ratio - making lower highs...
Advancing issues volume - another lower high, the indexes are advancing but the volume is shrinking.
Declining issues volume - another higher low, the indexes are moving up but the volume on the downside is expanding.

The smaller cycles are difficult to distinguish because the bigger cycle is dominant. I think we saw 20 day cycle low on Monday which explains the weakness for several days and the strength which we see now. The European indexes confirm this making a visible move lower for example the DAX with 3% pullback. Currently at day 4 of the next 20 day cycle and more upside is expected but the dominant 20 week cycle should take control soon.
We are currently at week 12 of the cycle. I expect correction in the next 4-5 weeks to finish this cycle.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
The TD Combo was completed on Friday. We have now completed TD Sequential followed by completed TD Combo. Combined with the weekly chart bellow I think that the correction is around the corner.
SP500 refuses to move lower but eventually it will do it:) The exceptions after finished TD Sequential on the weekly chart show the correction is delayed for 2-3 weeks but it will come.
We have hanging man on the weekly chart and DJ was in the red. The indexes are not much higher that the recorded 13 for the sequential.

No comments:

Post a Comment