Oct 10, 2014


And today I just look stupid:) That is crazy shit five reversals for several days with each reversal/candle bigger and bigger..... I do not think that any one has predicted this whole mess.

From technical point nothing has changed. The indicators show the same as before. Look at market breadth just more divergences and many indicators reached levels which are usually a low.

The important is many indexes are at important levels/trend lines/support and if the buyers do not step in soon... bellow is only open space.

My thoughts - all this mess should be a corrective move.... this will be probably the ugliest impulse if the indexes continue lower. The DAX is finishing 5 waves at important support. The indicators are pointing rather to a bottom than to the begging of a move lower.
I think we will see a retracement and some indexes like DAX,Russell2000 will make lower high and other like DJ and SP500 probably higher high before a correction begins... serious correction like 15%.

Lets see if in several days I look even more stupid:)


  1. Watch the VIX and its ability to forecast "expanding range days....and this might help you resolve some of the current activity...bigger VIX = bigger range days....and VIX has a trend just like everything else.....but your sense of direction and analysis have been close enough some add some Range of movement and volatility study to your homework for better performance....we all need something to work on...and the markets always leave me puzzled so you are not alone. LOL

  2. This week was even crazier than the previous one.... till now I have not seen so many reversals in a row.
    The ugly price action itself is valuable information too. Something is changing... that confirms that we are at important top.

  3. Carnap:
    To me it is quite clear what the situation of the market is, to clear maybe. As I wrote the last Saturday:
    “The first standard pattern in the correction wave [4] on Primary degree could be counted as a ZZ pattern. Sure below the 61.8 retracement level a second ZZ to the downside could follow.”
    The surprise will be still to the downside. That will give us a spike in fear and the wash out the market need to wake up the bulls again. Therefore there is a risk that the correction is running one degree higher. I will reflect this within the wkly update.

  4. Speaking of the VIX....place the VIX and the SPX on the same chart and see what happens to the price action for the last 2 plus years when the VIX exceeds 20....the Bounce has bee good for a 10 to 20 percent return for the Bulls.....since Friday we breached the 20 area WILL this bring the bulls back or is this time different?

    Seasonally....it is not time to be a buyer until one week before Thanksgiving......we are not there yet....But is the Dead Cat Bounce Monday or Tuesday???? Which usually happens whenever price action closes on the extreme low or high which also happened Friday?

    1. It is not only the VIX... most of the market breadth indicators show divergence or are at levels where we usually see a bottom.

  5. Carnap:
    Weekly outlook online.

    1. I fully agree...
      I am not so good with EW and the messy move is too much for me:) but I came to the same conclusion using the other techniques.