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.