Weekly review

Short term view - more on the downside before a bounce
Intermediate term view - we saw this week intermediate term top. Next move is lower bellow the November low for 8-10 weeks.

Well I was wrong how the top will play out. I thought that we will see a quiet week and starting 2013 the sell off which we saw during the holidays. The big guys played it out very nasty.... during the holidays.
On Thursday we saw strong rally from the lower trend line but no follow trough on Friday and the direction is now down.

We saw the top of this wave X or what ever it is and now the indexes should make lower low bellow the November low. Target is around 1300 and time frame around the end of February.

TECHNICAL PICTURE
Short term - the futures look ugly the price and the indicators are pointing down... so I think there will be one final push lower before a bounce from oversold levels. If the futures recover on Monday watch the alternate red scenario.

Intermediate term - the broken trend line has been tested and now it is time the indexes to move lower. A move of the same size as W points to around 1300. There is support levels at ~1350 and ~1300.

MARKET BREADTH INDICATORS
The Market Breadth Indicators are showing weakness too, saying watch out problems on the horizon.
McClellan Oscillator - warned us that we should expect move lower. For two weeks I wrote expect it at -30 to -40 level. We are now at -39 so we should see a bounce soon of oversold levels.
McClellan Summation Index - issued a sell signal.
Weekly Stochastic of the Summation Index - still on buy but this indicator is slower so I expect it to show sell signal after a bounce up.
Bullish Percentage - still on buy not impressed with the sell off.
Percent of Stocks above MA50 - plunged to 56 area. I think we will see it bellow 25 before the end of the correction.
Fear Indicator VXO - was making higher lows during this rally hinting that the market players are nervous. Now it is stretched to do upside so the same message a relief bounce soon to be expected. Watch the 28-30 area for an end of this move lower.

HURST CYCLES
Currently at day 9 of a 20 day cycle so we could expect some bounce soon after that moving lower again to a 40 day cycle low.

Currently at week 6 of a 20 week cycle. This one is the last one from an 4 year cycle and its bottom should mark 4 year cycle bottom.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Currently at 5 of a setup. At the moment I do not see a reason why the setup will not be finished.

Short term update

Here is the updated chart. I have not had a lot of time to asses the charts.... when the middle trend line is broken it is not a surprise that the index is dropping to the next support level and the lower trend line.
Current thoughts - if I look at the charts I would say that we will see some bounce of the trend line and lower high. A surprise news about resolution of the "fiscal cliff" can send the market to a higher high.... f..cking theater. The European markets are flat and SPX500 lost 45 points which is very very strange. So I can not exclude a sharp rally.

Short term chart

Updated chart - no drama another 25 points drop to the lower channel. The plan stays the same - slow grinding higher during the holidays.

Short term update

Until now everything was working according to the plan... even too perfect.
Now do not look at the futures if do not want to watch a scary movie:) 50 points drop half of that recovered. I do not know what is going on. I was expecting to see a top soon in terms of points around 1455 but time - not before the end of the holidays. I was expecting slow grinding higher market.
I see two possibilities:
- the big guys will save the day, most of the drop is recovered before the open and slow grinding higher market during the holidays.
- wave X is over and the move lower has begun.

P.S starting from today in the next ten days I must work all the time including Saturday,Sunday and Christmas so probably I will not have time to post. I will give my best and I will try to find time to post charts:)

Short term update

UPDATE - Wow it is developing very fast - a few hours later perfect touch of the yellow trend line... so the perfect time for a pause:)

Follow trough today.... who could have predicted that:) Target is between 1450 and 1460 (see the hourly and the daily charts bellow weekly review).
Of course the move will not be straight up so we could expect a pause in the next days.

Short term update

Ok the move up was expected.... the strength says there is more on the upside so we should switch to the light green scenario which is the preferred one now (see the first chart of the weekly review).

Weekly review

Short term view - I have no idea. My instinct tells me positive day or two an move to support around 1400.
Intermediate term view - the move up is not over. Before the end of the year (next 2-3 weeks) I will not worry about that.

No surprises this week quote - "positive start of the week and than a pullback". I have forgotten the FOMC meeting or I would have said - "positive till the FOMC meeting and than a pullback":) If you have an FOMC a move is extended till the meeting. It is always the same game.

I am not sure if the pullback is over. The two scenarios are shown on the first chart. When I see the divergence on the histogram on the daily chart, my instinct tells me this is not just a move for 2-3 days, it will last longer. So my preferred scenarios is move lower to 1400-1405 support area.

TECHNICAL PICTURE
Short term - we have a reaction of the same size like the previous two and the price reached the lower trend line so I expect buyers to show up at this levels. The ugly candle on the weekly chart and the divergence on the histogram on the daily charts are telling us that this selling is not 2 day event. So preferred scenario some buying early next and than lower to support around ~1400.

Intermediate term - there is no reversal signs and taking the seasonality into account I still think that there is one more push higher (cycles and Tom Demark's Sequential are saying the same - see bellow). Target is the broken trend line around 1450-1455. In worst case something like double top or marginal lower low.
Of course I could be wrong:
- if this pullback moves bellow 1400 means that the wave lower the green X has begun. Even so I think that there will be a deep retracement and a second chance to sell/take profits. This scenario has low probability for now...
- anything higher than 1460 will mean to expect new highs (the red scenario - Y red). In this case we are on the right side so I do not worry much about that:)

MARKET BREADTH INDICATORS
The Market Breadth Indicators - overall there is no signs of a reversal.... VXO and the McClellan Oscillator showed divergences and have warned of a move in the opposite direction so no surprise.
McClellan Oscillator - shows divergence and warned of a correction. Probably we will see it dropping to -30/-40 and the next move higher should make a divergence of a bigger degree.
McClellan Summation Index - shows buy signal, the direction is up.
Weekly Stochastic of the Summation Index - still in buy mode...
Bullish Percentage - does not show much strength, but the direction is still up.
Percent of Stocks above MA50 - almost touched the 75 line. After the pullback the next move higher should make lower high showing weakness.
Fear Indicator VXO - shows divergence and warned of a correction.

HURST CYCLES
No change - the two counts are still intact - first chart 20 week cycle has begun in November, second chart we are already in the middle of a 20 week cycle.

The 20 day cycle has topped on Wednesday now waiting to bottom and the next one to start. Using only cycles I can not say it has bottomed on Friday exactly 20 days or it will last 23 days or 25 days... what I can say is - it has topped very late in the cycle(on day 18) which means the cycle of a bigger degree(40 days cycle in this case) still has not topped. That makes me think that when the next 20 day cycle starts it will make a new high.

The second count the top is already in and the steepest part of the decline for this 20 week,18 month and 4 year cycle lies ahead.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
This week with the rise till Wednesday the count reached 10 from a combo and 6 from a countdown. This method says expect new high before this move finishes.

Short term update

Current thoughts... 1-2 points missing to finish a pullback of the same size. Target area 1415 reached so I am expecting some kind of a reaction around this levels. I think a pullback to the lower support level, now at 1400, has a better chance than an end of the correction now at this level.

Short term update

UPDATE: Ok FOMC is behind us and as expected the indexes have been pushed up... the big players are playing dirty as always - SP500 overshooted the resistance zone 1435 and reversed hard. We have short term top - shooting star on the daily chart and divergences on the smaller charts. Next target the area around 1415.
P.S. not posting a chart because nothing has really changed see the chart bellow.

UPDATE: Upps there is FOMC meeting on Wednesday they will hold the indexes at this levels until the meeting.

Ok perfect hit of the upper resistance line:) It looks like that the pullback has begun right on time. EMA50,support and the middle trend line are around 1415. Reaction with the same size like the previous two 1434-24=1410. So watching the 1410-1415 area for now. Bellow 1410 will mean expect move to the lower target 1390.

Weekly review

Short term view - I expect positive start of the week and than to see a pullback.
Intermediate term view - the move up is not over probably another 2-3 weeks higher.

Nothing interesting this week moving sideways. I was expecting the pullback to start this past week.... well we had two and a half days weakness and than the SP500 finished flat for the week.

There is one more push higher as I wrote during the week. Target is the resistance area between 1425-1435. After that a pullback should start with a target the lower channel line around 1390.

TECHNICAL PICTURE
Short term - MACD and the histogram are pointing higher so I think we will see a move to the resistance zone.

Intermediate term - the picture has not changed. At this levels there is resistance zone, the MA50 and the broken trend line so after brief move up a pullback should start followed by the last rise for this wave up.
The alternative is that I am completely wrong and a strong rally up is underway....

MARKET BREADTH INDICATORS
The Market Breadth Indicators do not show anything interesting... the direction is still up.
McClellan Oscillator - I expect to see divergence after a move higher early next week.
McClellan Summation Index - shows buy signal, the direction is up.
Weekly Stochastic of the Summation Index - in buy mode...
Bullish Percentage - does not show much strength for a 3 weeks rally, but the direction is still up.
Percent of Stocks above MA50 - heading for the 75% area where this move up should end
Fear Indicator VXO - nothing interesting...

HURST CYCLES
No change here too. The two counts are still intact - first(preferred) chart 20 week cycle has begun in November, second chart we are already in the middle of a 20 week cycle.

This 20 day cycle is already mature and it should top soon.

The indexes are testing the broken trend line (RSI too) and the next move lower should start.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Sell setup finished last week so the weakness was not a surprise. Currently at 3 of a countdown and 7 of a combo.

Short term update

The 1420-1425 zone could be tested again or it could be just a "b" wave of a zigzag.... anyway I still think that we will see a correction to the area around 1385-1390 before moving higher.

Weekly review

Short term view - pullback of a bigger degree for 3 to 5 days.
Intermediate term view - in the middle of a intermediate term move higher. I expect another 3-4 weeks higher.

Last week I was expecting 2-3 days weakness with support levels 1380 and 1390 than higher highs... we saw two and a half days weakness and move lower to 1385 than higher so nothing "shocking" here:)

Nothing has changed really since last week... I have just updated the charts. I think we saw the first wave higher or we will see the final high on Monday. Next week a pullback of a bigger degree for 3-5 days should begin. The support levels which I will watch are 1375-1380 and 1390. This should be another buying opportunity and another wave higher should follow.
The alternate scenario stays the same(shown with red on the charts) - the move higher is over the next big wave lower marking 4-year low will begin soon.

TECHNICAL PICTURE
Short term - it is difficult to say if we saw the high for this wave or there is one more push higher to resistance ~1425. We will know better on Monday. But I see resistance and divergence on the MACD so any move higher is take profits event. After that a pullback should begin.

Intermediate term - nothing has changed. The SP500 is struggling with the broken trend line, resistance and MA50, there is hammer on the weekly chart so I expect a pullback.

MARKET BREADTH INDICATORS
The Market Breadth Indicators issued buy signal confirming a new move, but we knew that already:)
McClellan Oscillator - shows strength hovering around 50.
McClellan Summation Index - issued buy signal.
Weekly Stochastic of the Summation Index - issued buy signal last week.
Bullish Percentage - issued buy signal. Should reach at least 70 before the move is over.
Percent of Stocks above MA50 - is moving higher which is bullish
Fear Indicator VXO - is moving higher which makes me think that the next move is lower.

HURST CYCLES
No change here too. The two counts are still intact.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Sell setup finished on Friday - some weakness is expected.

Short term update

Current thoughts - I think the first wave up is done or almost done. Next week we should see more significant pullback not breaking bellow support around ~1375-1380 and the third wave up.
If I am wrong the wave X is finishing an the next move lower into 4-year low will begin soon. But that is the backup scenario:)

Weekly review

Short term view - 2-3 days weakness before moving higher.
Intermediate term view - I think we saw the intermediate term bottom which I was expecting.

Last week I wrote that I expect a bounce for 3-4 days (based on an extreme of the McClellan Oscillator) - there we have it. After such bounce usually follows a lower low but this move looks like a wave from a bigger degree so I think we will see a higher low and the move up which I was expecting for several weeks has already begun.

Next week I expect a retracement for 2-3 days and the move up should continue.
If I am right we have finished double zigzag W (from September to 16 November) and we should see now a rally for several weeks - X and final Low Y (the green scenario daily chart).
If I am wrong wave X of lower degree has finished and we will see final wave Z of a triple zigzag (the alternate scenario in red - see the hourly chart).

TECHNICAL PICTURE
Short term - the indexes are short term overbought, divergence on the histogram, testing the broken trend line (see daily chart) so I expect a pull back. There is support between 1380 and 1390.
If the move up is over the indexes should start dropping hard next week. But taking the seasonality in account that does not look very probable. Nevertheless we should be careful so we do not get surprised.

Intermediate term - higher for several weeks into December.

MARKET BREADTH INDICATORS
The Market Breadth Indicators turned up confirming the move.
McClellan Oscillator - very strong move up which makes me think that this only the beginning of a bigger move.
McClellan Summation Index - turned up but still there is no buy signal. I think we will have one after a pullback next week.
Weekly Stochastic of the Summation Index - issued buy signal which again makes me think that this only the beginning of a bigger move.
Bullish Percentage - turned up but no buy signal for now...
Percent of Stocks above MA50 - in no mans land around 50... dipped bellow 25 and turned up that is bullish basically
Fear Indicator VXO - plunged lower as expected. The indicator has not reacted to the rally on Friday and moved outside the bollinger bands. That makes me think that we will see a pullback.

CYCLES (TD - trading days)
The cycle charts are not very clear too. We have two scenarios - the daily chart shows the first one that 20 week cycle has just begun and that means longer lasting rally and 4-year low early March. On the weekly chart the second one - nearing the end of the last 20 week cycle with 4-year low around the end of January.

We have finished 20 weekly cycle which was very stretched and lasted 24 weeks(average length is 18 weeks). The strength of this move suggests that the next cycle has begun.

The alternate scenario is that we are in the middle of the last 20 week cycle before 18 month and 4 year cycle low.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
From last week - "I do not expect SP500 to close 25 points higher on Monday so we will see a setup completed on Monday"... well the market can make some one look like an idiot very easy:)
So the buy setup was invalidated but nevertheless we have our bottom:)

We are at 7 of a setup of the weekly chart. I think we will have finished setup only if the alternate scenario plays out and the indexes start dropping hard next week.

Weekly review

Short term view - bounce for 3-4 days from oversold levels and another sell off.
Intermediate term view - waiting for the final sell off after a bounce.

So I was expecting some bounce to 1395-1400 and move lower as the next support level is 61,8% Fibo around 1345.... well SP500 made it only to 1390 and plunge to the support level - no surprise.

This whole correction lasts too long and is too deep so I think it is a part of a bigger move as we should see soon the end of the first wave down. I think we saw a four year peak in September and now we are moving towards 18 month and a four year low around the end of January (see cycles chart).
So what I expect - bottom in the next week or two, a rally in December 3-4 weeks and THE low for the correction around the end of January.

TECHNICAL PICTURE
Short term - bounce to relief the oversold conditions. Targets are 1370 and 1380.

Intermediate term - a lot of technical damages, broken trend lines etc. But the correction is running for 9 weeks already. The move is too stretched to the downside, look at where the MA50 is. So I think after some work on bottom we will see a snap back rally to MA50 and to test the broken trend line.
New high(red lines/count) is still on the radar but it does not look very promising....

MARKET BREADTH INDICATORS
The Market Breadth Indicators are negative no doubt but at levels at which we can see a bottom soon. Of course they can get more negative and oversold:) What I mean is if we see something like a bottom it will be credible.
McClellan Oscillator - hit extremes at 92. Usually when we see such levels a bounce follows - exactly that happened on Friday. I looked back the charts and after such extreme there is a bounce for 4-6 days and that is not the low. There is a lower low with divergence and that is THE low.
McClellan Summation Index - still on sell, that is to expect when the oscillator is bellow the zero line.
Weekly Stochastic of the Summation Index - reached oversold levels, now waiting for a bottoming signal. It can stay oversold for a few weeks.
Bullish Percentage - has fallen to 58. As i have said the pullback morphed to a correction and the indicator is confirming this. Pullbacks stay around the 65-70 levels and correction around 45-50.
Percent of Stocks above MA50 - has fallen bellow 25. At this levels correction usually find a bottom.
Fear Indicator VXO - touched 20 again and reversed. The chart is looking bearish which is in line with my expectation for a move higher in the next days.
Put to Call Ratio - nearing to zone for a bottom.

CYCLES (TD - trading days)
As I have said above the correction lasts too long and is too deep so I think we saw a four year peak in September and now we are moving towards 18 month and a four year low around the end of January. I have changed my cycle count because this one fits much better.
In August the Indexes were moving sideways for 3-4 weeks and that was probably the low of a 20 week cycle which was short and lasted only 13 weeks. now we are in the middle of the next one - week 11.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
At last something interesting after all this noise:)
I do not expect SP500 to close 25 points higher on Monday so we will see a setup completed on Monday that fits perfect with short term bottom and a bounce.

On the weekly chart we have 6 of a setup. I will not be surprised to see a buy setup finished as the indexes need some time to work on a bottom before a snap back rally in December.

Weekly review

Short term view - corrective bounce and final low.
Intermediate term view - expecting intermediate term bottom in the next week or two.

I was right for the direction that there is more to the downside and the herd must be scared before any move higher. I was wrong for the level, I thought the 38,2% Fibo around 1395 will hold... this week SP500 touched the 50% Fibo at 1370. I mentioned it last week that we can be surprised with a move to 1370-1375 where C=A but I thought it has low probability... well I was wrong. The more important is that I was not caught on the wrong side.

I know it looks ugly, divergences on the weekly charts, the expected pullback 3%-5% is now a correction with 7% drop lasting two months already...
Nevertheless I still think there is one more move up:
- on the weekly chart we have divergences but on the other side we have a cluster of support levels.(see the long term chart)
- Looking the European indexes the DAX for an example has a bull flag and does not look scary.
-major tops develop for months and not just start dropping. There is no divergences on the VIX, Bullish percentage or any other Market Breadth Indicator...
- and the most important the EUR looks like there will be a strong move on the upside(see the cycle charts of the EUR bellow). That means "risk on" trades and the commodities confirming this... the stocks should follow.

TECHNICAL PICTURE
Short term - I expect some kind of a bounce which will be corrective and another sell off. Resistance is around 1400.

Intermediate term - no signs of a bottom probably we will see a lower low. Next support level and 61,8% Fibo is ~1345

Long term - weekly chart which I have shown many times. Soon we will know if I am right. At this levels we have support, EMA50 and the trend line - pretty strong cluster of support. If not a new high at least a bounce should be in the cards.

MARKET BREADTH INDICATORS
The Market Breadth Indicators are confirming the move. There is no any signs of a bottom or divergence. They are saying there is more on the downside.
McClellan Oscillator - made lower low, the correction is not finished.
McClellan Summation Index - still in sell mode.
Weekly Stochastic of the Summation Index - reached oversold levels, now waiting for a bottoming signal. It can stay oversold for a few weeks.
Bullish Percentage - reached 65 which was my bottom level for this correction. Probably will move lower, still at elevated levels for a correction.
Percent of Stocks above MA50 - in my target zone 25-35 at 31. Lower low expected so 25 here we come:)
Fear Indicator VXO - touched my target of 20. Not finished on the upside. I expect to see another move to 20-22 before the end of the correction.

CYCLES (TD - trading days)
The current 20 week cycle is very stretched already - 23 weeks. This is the daily chart, I have changed the small cycles to reflect the stretched bigger cycle.

We had very strong rally of the 18 month cycle bottom and in the next weeks we should see the bottom of the first 20 week cycle and the beginning of the next one. The EUR is making a bull flag testing the broken trend line from the outside and when the next rally starts we should see at least 1,35. I think we have "risk on" game, the commodities are confirming it... and the stocks should follow.

The weekly chart of the EUR says that 18 month cycle has begun and there is plenty of room on the upside and time until the EUR start moving lower.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
The daily chart is a mess nothing interesting, the weekly shows 5 of a buy setup. Lets see what will happen in the next weeks.

Short term update

Update 08.11 - the trend line and support level broken. So the correction will last longer as I thought and SP500 will touch at least the 50% retracement 1370-1375.

Wow its developing so fast if you blink you will miss the action:))
Huge candles mark the beginning or the end of a move... after 7 weeks correction the logical conclusion is that todays huge bar should mark the end of the correction. I expect bottoming in the next day or two.

Current thoughts....

Weekly review

Short term view - the beginning of the week should be negative but after that I expect reversal.
Intermediate term view - final move lower has begun. I expect to see an intermediate term bottom next week.

Last week I wrote - "Target is the zone between 38,2% and 50% Fibo retrace 1428-1433 (MA50 on the daily chart is at 1434 so it looks like a logical target)". That is what happened this week - Thursday move up to 1428 and on Friday spike to MA50 on the daily chart 1434 followed by a reversal.

We are near to an intermediate term bottom. I think that next week the correction will finish and the next move up will start. The only question is from which level - something like double bottom around 1405 or SP500 will reach its target around 1395 which I am showing since the beginning of this correction

TECHNICAL PICTURE
Short term - I am expecting SP500 to move lower to the 1398-1392 area. Its my preferred target since the beginning of this correction - 38,2% Fibo retracement of the June-September rally(see the daily chart), support zone, the trend line connecting the October 2011 and the June 2012 lows and if you measure the waves it looks perfect C=0,618xA/Z=1,618xW(Y).
The alternative is something like a double bottom around 1405.

Intermediate term - nothing has really changed since last week... just up-to-date chart. MACD is turning up at its trend line as expected and the price is near to the support line and the trend line(DJ touched them already).
A surprise move could be the break of the trend line in that case next stop is the 50% Fibo retracement and the support zone 1370-1375 at this levels we have C=A too.

MARKET BREADTH INDICATORS
The Market Breadth Indicators are confirming that the direction is still down but this move is mature.
McClellan Oscillator - I expect to see a divergence after the move lower is finished.
McClellan Summation Index - still in sell mode.
Weekly Stochastic of the Summation Index - reached oversold levels, now waiting for a bottoming signal.
Bullish Percentage - not impressed at all - stays at the 70 level. I do not expect to see it bellow 65 which confirms that this is just a pullback.
Percent of Stocks above MA50 - shallow sell off and divergence or panic for a day or two and levels between 25 and 35 will mark the bottom.
Fear Indicator VXO - reached 19 my target for the correction is 20... its not too late:)
Put to Call Ratio - moving towards a bottom.

CYCLES (TD - trading days)
This cycle is already very late in the timing band so waiting for a bottom any moment...

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Nothing interesting to show... as expected the buy setup was invalidated.