Mar 23, 2013

Weekly review

Short term view - move up with target 1580-1585.
Intermediate term view - topping process should start and than 8%-10% correction.
Trading system signal (swing trading) - Direction: at the side line | Last entry signal: at SP500=.... on xx.xx.xx | Stop at:

Last week I wrote "no idea for the short term"... obviously the market hadn't idea too:) and the result is a triangle.

Until the last three minutes on Friday everything was seeing perfect for one small wave lower on Monday to finish the triangle and than came this ramp job.... Anyway I think the next short term move is up and I hope it will not start with a gap. Trigger for a long trade is move above 1559.
The bigger picture - after this move, a topping should start for 2-3 weeks and a correction after that.

Short term - The price is flirting with EMA50 and MACD with the zero line and the trend line. I think the histogram on the daily chart will turn up and the next short term move is up. The ramp job in the last three minutes makes the picture look like we will have a break out of the triangle on Monday. We can hope that it will not be with gap. Last "e" wave of the triangle is the backup scenario now.

- Triple cross(EMA10 and EMA20 crossing EMA50) - Price and moving averages are back above EMA50 and the histogram on the daily is reseting for two weeks. This is bullish action - clearing overbought conditions.

Intermediate term - nothing new, the plan stays the same. MACD and the histogram should make divergences after this final move up confirming reversal.

- Trend direction EMA50/MACD - price is above EMA50 and MACD above zero so intermediate term trend is still up. MACD does not made a new high and we must be careful for intermediate term trend change.
- Momentum Histogram/RSI - the oscillators are reseting, but the prices is not following which is bullish.

Long term - the plan stays the same.

- Trend direction EMA50/MACD - MACD is above the zero line and the price above EMA50, the long term trend is UP. No divergences so no troubles on the horizon.
- Momentum Histogram/RSI - momentum is still up but the move looks tired.

The Market Breadth Indicators - do not look very bullish. They are making their second top, what you should expect before reversal. The move is mature the next big directional move should be lower.
McClellan Oscillator - probably will move above the zero line and make another divergence.
McClellan Summation Index - we have a divergence and a sell signal.
Weekly Stochastic of the Summation Index - buy signal, but I think it should be ignored.
Bullish Percentage - looks like double top and another sell signal.
Percent of Stocks above MA50 - I expect to see another lower high and double divergence.
Fear Indicator VXO - I think we will see a divergence after the move higher in equities.
Issues Advancing - keeps moving lower
Issues Declining - keeps moving higher

The updated charts - I am 99% sure that we have 18 month and 54 month cycle low in November.
The 20 day cycle - either we had low on Thursday or it will be on Monday. It depends on how the triangle will play out.

We saw "stealth" 20 week low in the end of February and we are currently at week 4 of the next one.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Quiet week.... Best guess we will finish this combo(currently at 8) before the reversal.

Nothing new - setup finished for three weeks and we have 3 of a countdown and 9 of a combo.... I do not think that we will finish them before a correction.

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