Apr 10, 2013

Short term update

UPDATE: I do not see anything bearish probably next week retest of the break out around 1575... no top in sight the small charts show that there is one more push higher, I was wrong.
P.S. I have forgotten to mention that the system gave a long signal on Monday. I wrote it in an answer to a comment... and I was waiting for a pullback.

UPDATE: Target 1585-1590 reached without pullback.... very nice:(

I think we are seeing blow off move with an exhaustion bar today. RSI on the weekly chart made record high today for the whole rally since 2009 - what does it mean? First strength this is not major top and the end of the bull market. Second expect correction.... I think all bears are killed and everybody is celebrating the new all time highs.
Usually I do not call tops, but if I am right this is the top or we will see it next week 5-10 points higher with divergence. If I am wrong you can call me idiot trying to pick a top, when we have such a great bull market:))


  1. thank u for those usefull charts! can i know which software it is?

    1. Nothing special, free web site:) - http://www.freestockcharts.com/
      You just need Silverlight plugin for the browser.

  2. Krasi,

    Just curious when you say 'no top in sight' why you think that way?

    You may know this but the $INDU completed a 13 Combo today, and is on 12 of Sequential. $SPX is a bit behind on 11 and 9, respectively. $RUT just completed a Sequential.

    I also noticed some interesting statistics on being above the Bollinger Band all day and what that means historically. And if we close flat to up tomorrow that will be 3 consecutive days above the Bollinger Band, which also fits an exhaustion top.

    1. I know, I have SP500 on 12 combo on the daily and the weekly chart. DJ RSI making records above 78 and every time when such levels are reached serious correction follows. I wrote yesterday that this looks like blow off an exhaustion, everything screams down.... The problem is until we see confirmation from the price all that means nothing.
      I went through the charts,the smaller time frames 1h and 15min, and price action is just reseting indicators which means expect continuation - that is what I mean with "no top in sight".
      It is more about the short term, but we will see it first there. Next week the situation could change.
      I am thinking that if we do not see a top next week or two, that we are in some kind of euphoria stage and will not see a correction of at least 7%-9% until the summer. Than very sharp sell off 200 points or more.

    2. I understand the point on the shorter term indicators, yet I wonder if the stop hunt above 1575 SPX and the massive capitulation shift may distort them, similarly to September '12. We will see. Perhaps smaller correction lower (1515) than rip higher.

      I don't know if you remember but i ask a question on your longer term charts about a late June date a few weeks ago. I do lots of timing work and have a major date in late June, personally I think it fits well especially if you think about mainstream perception of a correction in Q2 from 2010-12. Every year we have one, perhaps this year we get 4-5% and then go higher, everyone gets onboard thinking Q2 correction cycle is over. Then the bottom falls out.

    3. Yes, I remember when you wrote about June... I start leaning in this direction too. I am watching the chart from 2007 and I think we will see something similar. In 2007 shallow correction for 3-4 weeks 4% in June, followed by higher high in July, and then sudden drop 200 points in August. Now this shallow correction should be in Mai to reset the indicators, higher high in June and then 200 points or more drop in July.
      In July there is very often important turning dates.... this scenario will fir perfect:)

    4. Krasi, but it seems that this year's bull market is even stronger than last year so I don't know if that 2007 scenario will play out. Every small dip is bought back to a higher high. I've never seen that before.

    5. Exactly if it continues this way the rally will become an euphoria stage(if not already there) and euphoria stage is the beginning of the end for a bull market. The players are complacent, most of them are invested, the bull burns it energy too fast.
      Previous bull - rally since Oct. 2005 with 2 corrections and in July 2007 was over. Plunge, retest and goodbye. We have the same - rally since Oct 2010 with 2 corrections and if greed is not purged... expect plunge in the summer, new highs in October 2013... we have already seen this in 2007:)
      The only difference now is what the central banks are doing, but the only effect from their action will be to prolong the bull market what we are already seeing. The cyclical bull will last probably 5 years and not 2-3-4 years.

  3. you're no idiot krasi. the idiot is demark when he called a top at 1500. i enjoy your blog and trading system signals. hope you post them quickly when they come up even if there's no pullback in sight. take care now.

    1. Thanks for the nice words:)
      I am angry at me because I knew that something on the upside is possible (I wrote it in the weekly review). The system gave a signal on the second day of this rally on Monday and I ignored it.
      The subjective perception to expect correction prevailed over the mechanical trading. That should not happen.
      It is not that I lost money or missed great opportunity, but a trader should be disciplined and has no bias.