Feb 28, 2015

Weekly review

Short term view - lower for a day or two than higher.
Intermediate term view - waiting 1-2 weeks to see what the market wants to do.

Boring week as expected... SP500 moved a little bit higher and now trying to start a pullback.

Nothing new - waiting to see if a topping will start or the move higher will extend. The pullback so far is not strong, no impulse, Sp500 touched 2119 a few points short of it's target 2130 that makes me think that the move lower should make a 20 day cycle low. After that if my plan is right we will see a marginal new high with divergence or lower high and strong move lower should begin. It should happen in the next 1-2 weeks or it will become too late and the move will continue crawling higher for another 4-6 weeks to 2200. Patience the market will show us the way:)

P.S. Article from Steen Jakobsen Chief Economist & CIO / Saxo Bank - Macro Digest: Up close and nasty – US slowdown looms. Interesting is that he is watching fundamentals, macro data and makes exactly the same conclusions like me from the last week about USD,Stocks,Gold,Bonds. The only difference is the he sees one more lower low for the yields. That is my preferred scenario too, but I just do not like the charts at the moment... which could change of course, the yields rally could be a fake.

Short term - difficult to trade... I think the pullback is not over, but another move higher should follow.

Intermediate term - no change

Long term - no change. Divergences which support the idea of a correction.

The Market Breadth Indicators - sending the same message like last week. They look a little bit worse, but is still too early, waiting for reversal signs.
McClellan Oscillator - three lower highs... bad signs unless the index start moving higher rapidly.
McClellan Summation Index - buy signal.
Weekly Stochastic of the Summation Index - reached overbought level, the swing higher should be soon over.
Bullish Percentage - buy signal, but long term several lower highs.
Percent of Stocks above MA50 - moved below 75 about the same story triple divergence.
Fear Indicator VIX - moved lower, but we have triple divergence.
Advance-Decline Issues - very weak, with series of lower highs.
NYSE New Highs-New Lows - series of lower highs.

I expect 20 day cycle low followed by the high of the bigger 40 day cycle.

Week 4 of the current 20 week cycle. Following closely the current 20 week cycle... when it tops the indexes should move lower to 18 month cycle low and the low for the year.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Setup finished as expected and price flip has followed. Now I am waiting to see which scenario will play out. The bullish one will start a countdown, the bearish one 9-13-9 and move lower.

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