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.