Enjoy the holidays

No surprise for now, pullback and crawling higher.
Do not get too excited and bullish, the 20W nominal cycle should make a top next week and this move on the down side will be much stronger.

I have a holiday break two weeks... I will try to post something, if I have time. Next review probably on the 8-th of January.
Enjoy the Holidays, Merry Christmas and Happy New Year.
Spend more time with the family and the friends. There is plenty of time to trade:)

Short term update

The weekend forecast looks right for now - negative day or two and a bottom around 1200.
Now we have a lower low at 1202 with divergence and a strong reversal.
If I am right in the next two weeks we will see something like that shown on the chart.
Resistance is 1300-1305, previous move was 108 points added to 1202 is 1310. So watch this area.

Weekly review / Седмичен преглед

Last week I was expecting more on the downside and support around 1220-1225... SP500 closed the week half a point bellow 1220. The problem I see - more weakness than expected(we saw a low ~1210) and it lasts longer than expected. The bigger picture has not changed a lot but all this means less time(see the last chart) and weaker move on the upside.The chart bellow is adjusted accordingly.

The move from the October low does not look complete... at all. Besides the sell off looks like a slow bleeding and is awful with a lot of overlapping or with other words correction. The white lines show the move till now and one more move is missing. The highest probability is the yellow line minor new high above 1292. Another option is triangle. I do not like it but it can not be excluded at the moment.
Current thoughts - bottom early next week and rally till the end of the year with a top between 1292-1305.
I have downgraded to low probability the oder option for a higher prices:)

A closer look at the hourly chart - the last moves on the upside look corrective (bear flag). There is no signs of a bottom forming at this moment, so probably another negative day or two. Target is the 1200 level which is 61,8% Fibo retracement and support level.
The unexpected - on the daily chart the last two candles were inverted hammer. If we see surprise on Monday gap higher and a strong day it will be a nice candlesticks formation for a bottom.

Cycles
Next week the smallest cycle should hit a bottom (28 trading day Hurst nominal cycle, around 20 days for SP500).
The next bigger cycle should reach a top the last week of December.Target 1295-1305 all resistance levels converge in this area.
The important one, the 20 week nominal cycle - since March 2009 it lasts 15W-16W for the SP500 and the last 3-4 weeks are sharp corrections. So after a top I expect a sharp sell off into January with a bottom the last week of it.

Short term update

No bottom in sight.... On Tuesday most of the blogs had the same charts as mine from the weekend so I am not surprised that the outcome will be something else. The market stays consistent and surprises the herd.
Nevertheless weakness is weakness some kind of a rally can not be excluded but my target is now lower between 1277-1292 minor tops.

Short term update

My intuition did not lie to me:) Waiting for some kind of a bottom. Worst case it should be above 50% retracement ~1215 which is 31x1.618 projection too (see the hourly chart from the weekend bellow). If SP500 break bellow it I have to revise the big picture.

Weekly review / Седмичен преглед

Not much of a surprise this week... a little bit stronger than expected and the pullback occurred on Thursday.

The big picture has not changed. I expect the indexes to move higher in the next two weeks and form a top after that. Targets for SP500 1305-1320 or 1345-1350.

For the short term.... I do not know. It feels like the third leg of a pullback to the MA50(daily see above) is missing. Projecting the first reaction 31 points gives us target around 38,2% retracement and strong support ~1225. I will trust my feeling and wait to see what will happen on Monday and Tuesday.
Or we already saw the low for the pullback I was expecting. I can not exclude this option.

Short term update

Hourly chart adjusted.
We saw higher prices this week but the candles have long shadows... which is not very good. SP500 has touched resistance, 38,2% lies now ~1225, EMA50 ~1221, MA20 ~1226, the middle of the Marubozu candle ~1222.
The 1220-1225 zone is getting more and more important for the bulls.

Weekly review / Седмичен преглед

Well strong week, the reversal was not a surprise but the speed was. SP500 hit my first target for 3 days - 3% gap and 4% panic buying.... definitely you will not see such moves often. So I raised my target - 1300 to 1320

The adjusted plan looks like this - 2-3 days pullback which should find support at ~1220 and then continuing higher to the target zone 1300-1320 (it depends on if want to include or exclude the shadows for this trend lines).
Alternate scenario is going even higher.If you project a measured move the target is 1376 or challenging the last high at 1370, but everything with the time... step by step lets see first the pullback and then the speed of the move after that.

Closer look at the hourly chart and possible path of the next moves.
1220 is very very important level - 38,2% Fibo retracement, support, test of a broken trend line, the half of the 4% Marubozu candle from Wednesday.
When you have such strong day 4% and Marubozu candle(candle without shadows) subsequent pullback should not exceed half of the candle. You have a panic buying and buyers should stay buyers and not sell their positions. If the price closes bellow the half of the candle there is very high probability that this was a fake move. The numbers from Wednesday low 1197, high 1247, candle size 50 points,the half is 25 points or the line in the sand is 1222.
If SP500 close bellow that level,cluster of strong support, the next target is 61,8% Fibo retracement and support level ~1190-1195. That will mean weakness and any subsequent rally will not reach the target, probably will stall at the previous minor highs ~1270-1275 or ~1290.

Short term update

Wow that was fast:) Perfect touch of 61,8% Fibonacci retracement and 3% gap on Monday kill the Idea of retesting the low.
Today SP500 reached the target so the alternate scenario for higher prices kicks in next target ~1300-1310.

Weekly review / Седмичен преглед

The support levels have been broken so I am bearish now for the intermediate term.
For the short term I think we will see a relief rally in December and a lower low in the end of January.
Alternate scenario with low probability for now is moving higher to the next resistance level around ~1300.

Closer look at the 60min chart. There is no signs of a bottom which means lower low ahead. Support levels are the 1,618 projections of the previous down leg(76 points) from the last two peaks. 1140 is strong support too, so I expect a bottom between 1140 and 1150. Relief rally in December with first target 1220-1230.

The cycles are pointing to a bottom next week and a rally but the bigger 20W nominal cycle is pointing down to a bottom in the end of January or early February so the move in December should be just a relief rally.

The McClellan Oscillator is very stretched witch means a bounce but a lower low before a bottom.

Short term update

Support did not hold so the picture is looking more bearish now. The cycles and the indicators have shown a sell off into the end of November but I was expecting that support around 50% retracement will hold.....
Currently SP500 at 1166 and 61,8% retracement at 1160. I still think there will be a rally in December but only to relief the oversold conditions. Lets see how it will look like. After that for January early February a lower low than this one in November. Charts on the weekend.

Short term update

Not a bad forecast from the weekend:)
I think its a 3 leg correction. The exact numbers 50% retracement is 1183 and A=C 76 points again 1183 (from the end of B and not from the highest point). My forecast working on a bottom this week and early next week followed by a rally with initial target the minor highs ~1265 to ~1275.

Weekly review / Седмичен преглед

I have not guessed the real path of the short term moves but the plan stays the same - short term bottom around the end of November and moving higher in December.
The market is consistent in one thing - the most probable outcome fails. Everybody were focus on the triangle and it has failed:) Now everybody are so bearish expecting a crash. How high are the odds when everybody expect a crash with VIX at 32 and it actually happens? - very low if you ask me.

I am expecting some kind of a bottom and a rally in December with max target the resistance zone around 1300-1310. Why?
- MACD is reseting, nearing the trend line and the zero line. It should touch them next week.
- Histogram is reseting and reached the average trough low.
- The move is corrective. It has nothing to do with impulse or trend move.
If I am wrong - plunge through support 1190 and MA50 with first targets 1175 and 1140

Possible short term moves. Wait for the open on Monday. Usually the Thanksgiving week is positive. If the indexes open lower see the chart bellow. If the indexes open higher probably moving higher Monday to Wednesday than red days Friday and Monday next week. Just invert the chops.
Support is 76 points measured move ~1200 and 50% retracement ~1187. I will start to worry when this levels are decisively breached. Till then I stay bullish for December.

Weekly review / Седмичен преглед

Crazy market up and down up and down chop chop chop....

Expect more choppiness whit upward bias in November whit tradeable low around the end of November.
I do not know the exact path, my best guess is shown on the chart short living top ~1310 and support around 1220.

Closer look at the hourly chart, probably a triangle... Third scenario with low probability not shown above is the triangle broken to the downside with target between support ~1190 and measured move ~1200.

Short term update

UPDATE 09.11
That was fast:) I though 2-3 days hanging around before the correction... I think it has begun.

The alternate scenario is playing out...
I think there is 3 to 5 days up with max target ~1310 (it could be lower high too) followed by a correction to the support zone ~1190 till end of November early December. The move does not look impulsive, even it shoots up that will be an exhaustion - take profits and/or sell short.
That is my daily chart with Hurst cycles shown. When the trend line is broken that means the bigger cycle will begin moving lower.

Weekly review / Седмичен преглед

Short term update

Ok my first target was ~1220... but just crazy with the elevator up and down.
I was expecting at least 2-3 days sideways or up and some kind of a top on the smaller charts... no with the elevator straight down.
Next some relief to reset the oscillators on the 60min chart and lower prices ahead.

Weekly review / Седмичен преглед

Huge rally for four weeks and the indexes met my target. It was too fast so its changes my longer term view. This strong move could mean a move to higher highs has began, or it is a part of crazy sideway correction and ofter a top we will see a sell off to the lower end of the range ~1120. Now when Europe is "saved" and considering seasonality the second scenario has low probability.

This two scenarios are shown on the chart.I expect short term peak to take shape and a pullback to support ~1220 or the congestion zone around 1190.
If SPX500 break bellow support 1175 the second scenario will have very high odds. But for now there is no such signs.

Closer look at the 60-min chart with the support levels and Fibo retracement.

I have begun studying Hurst cycles, I am still an amateur:) but I will show my "research" because it fits my longer term view.
The topping of the 54 month and the second 18 month cycle brought the sell off. Now the next 18 month cycle and the 9 month are rising. Considering seasonality and that the high of the 9 month cycle is in January I do not expect top until that time. SPX500 almost touched 1300 so this move will bring probably new highs. The bigger 54M cycle is already pointing down, in March 2012 the 18M will reach 1/3 of its time and after that it becomes dangerous.... according to the cycles.
I will not trade according to the cycle, but is fun using them and at first glance they look useful.

Long term view moving up at least till mid January and higher highs. Top in March? - Hurst cycles says it will be an important top. Lets see what will happen.If we see MACD divergence on the weekly chart it will be a very important top.

Short term update

My projection for the move was SPX500 between 1280-1300 - check and DAX 6400 - check.
I though we will see ABC move which will last at least two Months... straight up, target hit for four weeks. I think that means - expect more on the upside.

UPDATE 29.10.2011 Here are the charts....
On 24.09.2011 I wrote:
DAX is holding support, very strong bounce and another hammer candlestick from the lows - support level and 61,8% Fibo retracement from the 2009 lows. It looks like a double bottom. That is one reason why I think there is no much left on the down side.

And the DAX now

Short term update

The market made one more push higher hitting resistance and 61,8% retracement.
Now its time for a pullback. I am watching the 38,2%(~1190) and 50%(~1170) levels.

Weekly review / Седмичен преглед

Still thinking we will see three wave move to the upside. Next move correction to support 1175 and 38,2% Fibo retracement.

Short term - wait and see the open... 38,2% correction to 1175 or one more push to 61,8% retracement for the whole sell off.

Short term update

I was sick the weekend and did not have the power to write something...

The idea is the histogram is too high and the NYSE McClellan Oscillator is at extremes so I expect a correction (see the charts from the weekend).
Last week I has shown 61,8% retracement, but this is the maximum target. I do not think that SP500 will correct so much.
Look for something like this on the chart - 38,2% retracement around ~1170, worst case 50% Fibo retracement ~1150.

Weekly review / Седмичен преглед

Short term update

Current thoughts...

Weekly review / Седмичен преглед

I expected a bottom for SP500 around 1080. The index hit 1076 and we saw very strong bounce. I think it was the bottom for this move lower. The sentiment is very bearish so the next move must reset it and that means a rally at least 2-3 months so everybody can forget the pain.

Next I expect a higher low which will confirm that the bottom is in.
Alternate scenario with low probability, if I am wrong, is plunge lower to major support ~1020.

Short term - SP500 broke slightly the channel but the histogram is moving lower and the index made small double top, so the next week I think we will see higher low developing. On the chart the target is 1120 but the moves are very volatile so it can be 1100 too.... anyway expect higher low.

I have shown already the similarities between 2007 and now in older posts. Look at the chart two months later.
Look at the price action and the indicators. Exactly the same picture. That is one of the reasons why I think that the bottom is in.

Another reason for a intermediate term bottom - SP500 making lower low but VXO lower high.

Short term update

UPDATE after the close:
Wow that was fast!!!! The bottom is in a rally for 2-3 months is the next move.

The indexes just moved lower without a pause. SP500 is now in my target range 1080-1100. I think this week we will see a bottom. I am patient... we still do not have a long signal but nice divergences are forming.
Alternate scenario is a plunge all the way to major support ~1020.

Weekly review / Седмичен преглед

SP500 keep moving in the range between 1120/1140 and 1200/1220(see the hourly chart). I have thought after the strong sell off last week the final leg down has begun... but the SP500 stayed in the range. What that means? Last two weeks I mentioned that the DAX has bottomed and for SP500 there is no much left on the downside. This week action just confirms my expectations.

Now there is two scenarios for me - last final push lower next week, or we have already seen the bottom(DAX double bottom, DJ double bottom and SP500 higher low). I will stay with the plan - a low between 1100 and 1080 and DAX making higher low, but I will be very careful.

Short term - I will wait for the opening on Monday... from the chart I expect short living push to 1120 and a rebound for a day or two. The strength of this move will show us which scenario is playing out.

Short term update

Update after the close:
What the f..k??? Complete mess!!!! Lets see tomorrow... It looks like short squeeze

SP500 has broken decisively above 1175. Too much strength, this is the new plan.

Weekly review / Седмичен преглед

Perfect week!!! As predicted red Monday move higher and sell off. It was so strong, it went like hot knife through butter eliminating right away the alternate scenario. So my plan is still playing out - we will see a lower low before a strong move up.

The plan - 1 or 2 days relief move and then the final leg down in the next one or two weeks. I think SP500 will find support around ~1080.
Alternate scenario is some very bad fundamental news like Greek default and plunge to major support around ~1020. If it plays will not be so bad when you are on the right side:)
I think there is no much left on the down side and I am watching 1100-1080. First look at the DAX chart bellow, I think DAX is bottoming. Second we had a huge sell off this week, but this way the bear is burning its fuel too fast and this is secondary sell off not the first.

Short term - 1 or 2 days relief move reseting the histogram on the hourly chart, but first it must break resistance at 1140. Best bullish case ~1170 which is resistance,50% retracement and test of the broken trend line. Watch the histogram making tower and turning down.

DAX is holding support, very strong bounce and another hammer candlestick from the lows - support level and 61,8% Fibo retracement from the 2009 lows. It looks like a double bottom. That is one reason why I think there is no much left on the down side.

Weekly review / Седмичен преглед

Ok I was expecting move UP but not five days:) This move makes an alternate scenario possible with the bottom already in.

I hate this, as I said several times, the big players are stretching the moves, so I question my big plan.... the same story now.
The problem is, I was expecting panic low followed by another low. We have it but on the European indexes and SP500 moves in some kind of bear flag. Is the low in or not? I have no idea. My feeling says no. If this is the bottom it looks strange, but if I look at the European indexes I do not see anything bearish. So will show both scenarios and wait the market to show the real direction.

Short term - more on the upside reaching resistance,MA50 and 50% retracement (see second chart). Pullback will follow and than we have two scenarios - bottom is in we are moving higher or my plan plays out and we will see lower low.
Probably red Monday to reset the histogram on the hourly chart, followed by a move to resistance ~1230. Then a pullback to support ~1175. After that we will see which scenario will kick in.

And the bullish looking DAX. The German index hit support and 61,8% retracement from the March 2009 bottom

Look at this chart- beautiful bottom. Panic low followed by lower low hitting support and 61,8% Fibo retracement and divergences and strong bounce. What do you want more? This is a bottom.
Who is showing the real direction? The European indexes or the American?
~6000-6100 is interesting level - 38,2% Fibo retracement from the March 2009 bottom and 38,2% Fibo retracement for the sell off this year.
And DAX the hourly chart.... pullback to support and EMA50 and reset the histogram before breaking the down channel.