Feb 23, 2014

Weekly review

Short term view - another push lower than reversal to the upside.
Intermediate term view - another week or two higher.

Pullback which does not look complete... overall boring week and no surprises. The forecast stays the same new ATH(the indicators have improved) and the rally should fail short after that - many indexes are lagging and the volume was bigger an rising to the downside and it is less and sinking to the upside.

Short term the indicators are pointing to another push lower - Tom Demark sell setup with price flip, topping candles with tails, histogram / RSI(5) / MACD hourly / McClellan Oscillator divergences.
Intermediate term - as long as the price stays above 1810 (support and MA50) I expect a new ATH followed by real correction 10% or more. Another push lower should not last longer than 1-2 days and we should see a green week or something is wrong and the price is probably reversing to the downside.
Trading - on Monday if the indexes start moving lower you can open shorts with stop above the last highs 1848 (or even 1843 last minor highs). Small risk, it is worth a try - if I am right small profit, but if I am wrong you will catch the reversal:)

Short term - I expect another push lower Mondy-Tuesday to finish the pullback. Target is around 1810-1815 where the support is and MA50 on the daily chart.
- Triple cross(EMA10 and EMA20 crossing EMA50) - short term trend is still up, but with double MACD divergence the pullback is probably not over.

Intermediate term - I think SP500 will make short term low at support and MA50 than we will see how high it will move...
- Trend direction EMA50/MACD - intermediate term trend turned up.
- Momentum Histogram/RSI - momentum turned lower - the pullback is probably not over.

Long term - we had small red week so the indexes can take a breath and the next week should be green. I do not think that this move will clear the MACD divergence and the move will fail to start another long lasting rally.
- Trend direction EMA50/MACD - the long term trend is up - the price above MA50 and MACD above zero. The MACD divergence should make you worry, that the long term trend can reverse soon.
- Momentum Histogram/RSI - momentum turned up - intermediate term trend is up.

The Market Breadth Indicators - oscillators like Advance-Decline Issues are overbought, the trend following indicators have turned up and I expect several green weeks.
McClellan Oscillator - hit mildly overbought levels and showing divergence - pullback?
McClellan Summation Index - buy signal, made higher high than the lat one - several green weeks.
Weekly Stochastic of the Summation Index - buy signal.
Bullish Percentage - buy signal... still lagging.
Percent of Stocks above MA50 - still bellow the previous highs.
Fear Indicator VIX - complacency again. Do not forget - these are levels where the VIX is a buy.
Advance-Decline Issues - hit extremes so I expect a pullback

Probably the top of the smaller 20 day cycles.
Week 3 of the next 20 week and 18 month cycle.
18 month cycle bottom if I am right. Usually you will see a strong rally lasting for months, but after 15 months without correction it is a little bit suspect.... The alternative is some kind of a top - double top or H&S and top of the 5 year and 9 year cycle. The line in the sand is 1740 the bottom of the last 18 month cycle if the current one moves lower this will mean the cycles of a higher degree 5 and 9 year have toped out.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Sell setup with price flip, technical analysis says the same so I expect something to the downside. In the next 2-3 days we will know if this is a reversal or a countdown will follow.

1 comment:

  1. Great update Krasi! Look forward to your daily post next week if we get some volatility.