Jun 21, 2015

Weekly review

Short term view - it depends on the "Greek drama"
Intermediate term view - I do not see a top, I expect final move higher before a significant correction.

Another week another choppy moves down and up. The bottom was tested before FOMC and than higher as expected... one more week and we will celebrate 7 months chopsville:)

Three waves corrective moves up and down, cycles point to a 40 weeks cycle low clearly visible on the DAX and DJT not so good visible on DJI and SP500 because of the mess which is running for so long, market breadth pointing to a bottom rather to a top.... so I do not see signs of a top.

Another three waves lower and higher and the ED should be finished... it looks too easy. What are the alternate scenarios:
- Short term - negative news about Greece could cause another leg lower with target around 2064 (see the first chart).
- Intermediate term - if I am right about the 40 weeks cycle low and European indexes make new highs this should pull the US indexes too and stretch the move in time and price(see the second chart).

If I am honest the alternate scenarios short and intermediate term will fit much better, but I do not have prove on the charts to show you something.

Short term - as long as the price stays above the broken trend line and 2090(last low) I expect another move higher. If there is negative news next week(the Greek drama) the pattern could mutate to a double zig-zag (W-X-Y red) which will not change the big picture.

Intermediate term - the ending diagonal and alternate scenario ED stretched in time and price.

Long term - significant correction after the move higher is over. Target - MA200/the support zone/the start of the wedge.

The Market Breadth Indicators - there is no strong buy signals... but the indicators are pointing rather to a bottom than a top.
McClellan Oscillator - higher low and moved above the zero line.
McClellan Summation Index - sell signal.
Weekly Stochastic of the Summation Index - sell signal, but in oversold territory. We should be close to a bottom.
Bullish Percentage - buy signal but still to early.
Percent of Stocks above MA50 - in the middle of the range after higher low
Fear Indicator VIX - long term higher lows... wedging too.
Advance-Decline Issues - in the middle of the range...

Day 8 of the current 40 day cycle.

Week 2 of the current 20 week cycle.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Another price flip nothing interesting.... because of the extremely choppy moves in the last six months TD Sequential does not help us much.

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