Mar 9, 2014

Weekly review

Short term view - pullback maybe....
Intermediate term view - I do not see signs for something more than a pullback...

Nothing has changed - choppy move but with upward slope. The price moved briefly bellow the last minor low 1840 that was all to the downside for the week.

The divergences does not look any better the histogram daily/McClellan Oscillator, but I do not see signs from the other indicators for now that this will be something more than a pullback.
The minor low for the last three days after the huge bar is 1870 and move below it will mean a pullback. The next support level is 1850 the top from January. As long the price stays above 1835 (MA50 is around there too) the intermediate term trend stays up.
SP500 looks strong, but what I do not like is the DAX - it looks bad. It looks like it made the right shoulder of a H&S. It is not common to diverge with the American indexes and this could be a warning that this is an intermediate term top for SP500....
My advice take some profits if it moves bellow 1850 and take all profits if it moves bellow 1835. In the mean time we will watch how it moves lower to decide if this is a pullback or something more.

Short term - If the price moves bellow last minor low 1870 I think we will see move to the lower end of this megaphone and to support around 1850.
- Triple cross(EMA10 and EMA20 crossing EMA50) - short term trend is still up

Intermediate term - MACD moved above the down sloping trend line, but we have histogram divergence, so my conclusion is we stick further to the red scenario.
- Trend direction EMA50/MACD - intermediate term trend points up.
- Momentum Histogram/RSI - momentum points lower with divergence - pullback at last?

Long term - 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, the intermediate term trend is up.

The Market Breadth Indicators - the oscillators show divergences and look even worse, the trend following indicators look ok and are improving. So the conclusion is the same pullback and another move higher before reversal.
McClellan Oscillator - continue dropping and the divergence is getting bigger.
McClellan Summation Index - buy signal, and near the highs from 2013.
Weekly Stochastic of the Summation Index - buy signal, it reached the overbought level.
Bullish Percentage - buy signal, but still below the previous highs.
Percent of Stocks above MA50 - looks ok for now.
Fear Indicator VIX - the next higher low... this is a big red flag.
Advance-Decline Issues - divergence, we should see a pullback.
Put/Call ratio - historic low levels again... mania again
Percent of Stocks above MA200 - are improving.

We nearing the time frame where we usually see 40 day cycle top.
Another green and confirmation that this should be the next 20 week cycle....

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
I think the countdown will be finished before any meaningful move lower.
As I wrote I do not think that the move up is over and with restrictive rules we have combo and countdown currently at 12.


  1. Krasi, miss your weekly updates. Hope all is well.

    1. Everything is ok:) I am just too busy and tired... I have no power to look at the charts and write something..