From a e-wave perspective, wave A of the rally has topped and wave B is in progress now, which should ideally take us to the 1160-80 area.
Good luck !
Wednesday, January 19, 2011
Turn - Jan 19, 2011
In my Jan 5 post, i had mentioned that wave 5 top was still pending and i will update once a turn occurs. There were a couple of hourly sell signals since then, but no damage was done to the daily structure. Today finally i have a sell on the daily charts and a completed wave structure. So the back of the uptrend from the Sep 2010 can now be considered broken. A multi-week intermediate term decline should now be the expectation.
From a e-wave perspective, wave A of the rally has topped and wave B is in progress now, which should ideally take us to the 1160-80 area.
Good luck !
From a e-wave perspective, wave A of the rally has topped and wave B is in progress now, which should ideally take us to the 1160-80 area.
Good luck !
Tuesday, January 04, 2011
SPX e-wave - Jan 5, 2011
The wave count that i posted in my last update remains in force. Wave 5 is close to completion, but a turn is unconfirmed yet. SPX 1251 is the key pivot to hold at this point. We may have another day or two or sideways consolidation and one more upthrust after the payrolls report, before heading down in earnest. So the trade is still "buy-the-dips" above the 1251 pivot. Whenever the turn occurs, i will post an update at the EOD.
Tuesday, December 28, 2010
E-wave count for SPX - Dec 28, 2010
Sorry, i have not been actively blogging the last few months. I will try to post the e-wave count for SPX going forward, both on a weekly and daily basis.
On the weekly charts we are close to completing the wave a (currently in progress). After this a multi-week correction should be the expectation. But this is not going to be the end of the bull market. There will another leg up after this correction into the spring of 2011 before the fat lady sings.
On the daily charts, we are approaching the end of wave 5, which should kick start a multi-week correction. Use extreme caution here, if you are long. Tighten the stops to the SPX 1232 pivot. I will update here when the turn is confirmed.
On the weekly charts we are close to completing the wave a (currently in progress). After this a multi-week correction should be the expectation. But this is not going to be the end of the bull market. There will another leg up after this correction into the spring of 2011 before the fat lady sings.
On the daily charts, we are approaching the end of wave 5, which should kick start a multi-week correction. Use extreme caution here, if you are long. Tighten the stops to the SPX 1232 pivot. I will update here when the turn is confirmed.
Sunday, September 05, 2010
SPX LT Oscillator - Close but no cigar !
Here's a long term Oscillator, which i have been showing on this blog for many years to track the LT turns. Well, since my system on SPX is proprietary, i cannot display any of my trading charts. So I decided to at least post this long term Oscillator for the benefit of those who are into LT investing. This Oscillator is not of much use to a trader as much as for an investor. But it certainly can be indicator to demarcate bull and bear markets.
The rules are pretty simple.
1) For a bear market, we need to have a lower high and lower low on the weekly price charts and the Oscillator has to cross below zero.
2) For a bull market, we need to have a higher low and higher high on the weekly price charts and an oscillator crossover above zero
This week, the market was on the brink of a LT breakdown, but escaped marginally. What the LT bears would not like to see here is a curl up of this MACD above the signal line, which would give back control to the bulls.
In my last post, i had said that the strong rejection from 1130 pretty much nailed the 9 month cycle top. Now the failure to break the SPX 1010 lows and a strong rejection from there pretty much neutralizes the situation. In other words, we are back to square one. My guess is we will double top around the SPX 1130 area and start the next leg down into the 9 month bottom lows due late Oct. But that's just a guess at this point. In a week or two, the market should start giving additional clues.
Good luck trading !
The rules are pretty simple.
1) For a bear market, we need to have a lower high and lower low on the weekly price charts and the Oscillator has to cross below zero.
2) For a bull market, we need to have a higher low and higher high on the weekly price charts and an oscillator crossover above zero
This week, the market was on the brink of a LT breakdown, but escaped marginally. What the LT bears would not like to see here is a curl up of this MACD above the signal line, which would give back control to the bulls.
In my last post, i had said that the strong rejection from 1130 pretty much nailed the 9 month cycle top. Now the failure to break the SPX 1010 lows and a strong rejection from there pretty much neutralizes the situation. In other words, we are back to square one. My guess is we will double top around the SPX 1130 area and start the next leg down into the 9 month bottom lows due late Oct. But that's just a guess at this point. In a week or two, the market should start giving additional clues.
Good luck trading !
Thursday, August 12, 2010
9 month cycle top confirmed
There was some ambiguity as to whether the May top at SPX 1173 or the the June top at 1131 was the 9 month cycle top. The strong rejection from 1131 pretty much confirms the 9 month cycle top. We should head into the 9 month cycle bottom from here, due in late Oct-Nov
My trendicator also moved to a sell yesterday without a CIT. It's going to be very hard trading this coming volatility with the daily charts(or daily trendicator). By the EOD, a lot of damage can happen. I will start posting the hourly buy/sell signals on traders-talk.com, for those interested.
I will post occasional updates on the daily trendicator here and some big picture thoughts.
My trendicator also moved to a sell yesterday without a CIT. It's going to be very hard trading this coming volatility with the daily charts(or daily trendicator). By the EOD, a lot of damage can happen. I will start posting the hourly buy/sell signals on traders-talk.com, for those interested.
I will post occasional updates on the daily trendicator here and some big picture thoughts.
Tuesday, August 10, 2010
Quick update
The trendicator remains on green status.
Given that S&P is trading below 1131 June highs, it still remains ambiguous as to whether the May 1173 or June 1131 highs constitute the 9 month cycle top. S&P has been forming a triangle over the last few days on the hourly charts. Triangles precede terminal spikes. So we could see most likely see a celebratory spike over the next few days above 1131, before we say adios to this rally.
In the event i get a CIT warning, i will post an update here.
Given that S&P is trading below 1131 June highs, it still remains ambiguous as to whether the May 1173 or June 1131 highs constitute the 9 month cycle top. S&P has been forming a triangle over the last few days on the hourly charts. Triangles precede terminal spikes. So we could see most likely see a celebratory spike over the next few days above 1131, before we say adios to this rally.
In the event i get a CIT warning, i will post an update here.
Monday, August 02, 2010
9 month cycle thoughts
On July 28, i wrote
We acheived that projection. But the trendicator moved from a sell to a outright buy today, without a CIT warning, in a shock and awe style upmove.
We have a 9 month cycle bottom which is due in late Oct - early Nov 2010. Every 9 month cycle bottom after the Oct 08 bottom have made higher lows signifying a cyclical uptrend in prices. In May 2010, we broke the 9 month lows of Feb 2010, and consequently the cyclical uptrend, which indicates that the next 9 month cycle low will potentially be a lower low.
The 9 month cycle crest is amibigous here. It's either the May 2010 top at 1173 (if the cycle was left translated) or the June 2010 top (ideal top) at 1131. Now we are 4 points away from the June 2010 top. Will it hold ? If it was a 9 month crest, it should reject prices strongly here. If not, it would confirm that May 2010 was indeed the 9 month crest and prices should move towards there for a retest and then fail there for a downmove into the 9 mont bottom due late Oct.
If SPX 1173 gets taken out, then the bearish case is over. That would mean a extremely right translated 9 month cycle and the implications are ultra-bullish.
The trendicator is on a buy. So we are back to buy-the-dips mode. But keep an eye on the 1131 and 1173 resistances and watch how the price reacts there. If we see volatile back and forth action below the resistances, then it's a clue that a potential top is getting built.
Good luck !
If today's lows gets taken out, then it would generate a sell with a projection to about SPX 1080-85. I don't see any projections beyond that, at this point.
We acheived that projection. But the trendicator moved from a sell to a outright buy today, without a CIT warning, in a shock and awe style upmove.
We have a 9 month cycle bottom which is due in late Oct - early Nov 2010. Every 9 month cycle bottom after the Oct 08 bottom have made higher lows signifying a cyclical uptrend in prices. In May 2010, we broke the 9 month lows of Feb 2010, and consequently the cyclical uptrend, which indicates that the next 9 month cycle low will potentially be a lower low.
The 9 month cycle crest is amibigous here. It's either the May 2010 top at 1173 (if the cycle was left translated) or the June 2010 top (ideal top) at 1131. Now we are 4 points away from the June 2010 top. Will it hold ? If it was a 9 month crest, it should reject prices strongly here. If not, it would confirm that May 2010 was indeed the 9 month crest and prices should move towards there for a retest and then fail there for a downmove into the 9 mont bottom due late Oct.
If SPX 1173 gets taken out, then the bearish case is over. That would mean a extremely right translated 9 month cycle and the implications are ultra-bullish.
The trendicator is on a buy. So we are back to buy-the-dips mode. But keep an eye on the 1131 and 1173 resistances and watch how the price reacts there. If we see volatile back and forth action below the resistances, then it's a clue that a potential top is getting built.
Good luck !
Thursday, July 29, 2010
Wednesday, July 28, 2010
CIT warning
My trendicator has given a CIT warning. CIT warning is not a definitive sell signal. But usually a CIT warning translates into a sell signal the next day, if the low of the daily candle that triggered the CIT, gets taken out. So if today's lows don't get taken out tommorow, then it was much ado about nothing. If today's lows gets taken out, then it would generate a sell with a projection to about SPX 1080-85. I don't see any projections beyond that, at this point.
Well, the upcoming 9 month cycle bottom due in Oct-Nov timeframe is in the back of my mind. But it's too early to say that this is the start of that big decline. Weekly has to turn down before such forecasts are made. At this point the weekly is pointed up. So i will treat this as a correction in an uptrend.
Well, the upcoming 9 month cycle bottom due in Oct-Nov timeframe is in the back of my mind. But it's too early to say that this is the start of that big decline. Weekly has to turn down before such forecasts are made. At this point the weekly is pointed up. So i will treat this as a correction in an uptrend.
Tuesday, July 27, 2010
Thursday, July 22, 2010
Power trend
Just a quick update. We had a big up day as i posted yesterday. My trendicator has entered a power trending mode now.
Here' some quick details on what a power trending mode means. Power or strongly trending markets are those, where the odds of sucessfully executing a countertrend swing trade becomes extremely low. It does not preclude one from intraday countertrend trades or quick scalps, but is unforgiving when it comes to trying to swing against the trend. Power trend does not measure the size or duration of the move. The move could run for months or end even after a day. It just attempts to charaterize a trend which is in a high momentum zone. So it pays to wait for a potential CIT or actual CIT before any countertrend swing is attempted from this mode.
Wednesday, July 21, 2010
No change
The action on the hourly charts today was ugly, but my trendicator failed to produce either a sell signal or a CIT warning. I would have at least expected a CIT with this kind of action. But surprisingly, i did not get one. So the trendicator remains on Green. If the trendicator is right, we should get a huge up day tommorow. If not.... :-)
Tuesday, July 20, 2010
Daily buy signal
The signal changed today from strongly downtrending to uptrending, without a CIT warning. Not surprising, given that we had a key reversal day on the daily charts. The next upleg has begun....
NAV trendicator
Here's a visual look at my system. My system uses no cycles, e-wave, astro, magic numbers, support, resistanace, Fibonacci or for that matter even interanls (breadth, vol, high/lows), Put/Call, VIX, fundamentals, news, earnings, bull market, bear market, cyclical/secular trends et al. It is based on purely price action, price trending rules and price based momentum. Price trending rules and momentum rules are used to charaterize the trend into different phases as
1) Trending
2) Strongly trending (power phase - no countertrend trading should done in this phase)
3) Downtrending
4) Strongly downtrending (power phase - no countertrend trading should be done in this
phase)
5) Potential CIT (Change in trend) => At this point, trend traders should take profits or tighten their stops and swing traders start probing positions against the trend.
Last but not least, this is not a curve fitted system (which are dime a dozen in this industry), with optimized parameters to make the past look good. The system only attempts to characterize the trend and not optimize the buy/sell points. No it won't pick the exact bottom and top tick, if that's your obsession. You would miss one or two candles at the top/bottom. The system also does not have a vision for the future . Consequently, it does not attempt to guess the amplitude of the move or the duration of the move.
Monday, July 05, 2010
Monday, June 21, 2010
IT and ST thoughts
We are in a ST rally in a IT downtrend. The IT trend turned down after we broke the Feb 2010 weekly pivot at 1044 on 5/25/10. The action is reverse of what happened when we broke the 943 pivot in June 09. Once a weekly pivot is broken, the market cannot repair itself in days and rally to new highs. When the weekly pivots were intact, there were bold statements calling for the TOP of the bull market on the message boards. Now that the weekly pivot is gone, there are bold statements about possible new highs on SPX in the coming weeks. Broken trends don't turn on a dime. If it did, there would be no trend traders around. I hear comparisons of this decline to that of July 07 decline and subsequent rally to another high in Oct 07. Well, the July 07 decline did not break the prior weekly pivot at 1363. So the weekly uptrend was intact then. What we have now is a broken weekly trend which needs to be fixed.
I see two ways this can be done:
1) Complex bottom on the NYSE MCO.
or
2) We establish a weekly pivot in the SPX 1130-1150 area, go down and make new lows and then rally back up and break that pivot.
Until one of these happens, all ST rallies are bound to fail and the IT downtrend will continue. We are in the sweet spot of SPX 1130-1150 where this rally could fail. Currently the ST is on a buy, but keep an eye for a rally failure from this area.
Sunday, June 06, 2010
Complex bottoming action required
Needless to sat that the buy signal from 1085 failed on friday and we are back to sell mode. The NYSE breadth MCO will have to put in a complex bottom, with positive divergence with price, before we see any sustained IT rallies. Until then, all these ST buy signals will produce minor pops and fail. Will update if anything of significance happens.
Wednesday, June 02, 2010
Hourly buy signal - June 2, 2010
For the first time, since this decline started in April, SPX has generated a Short term buy signal on my system. The short term buy got triggered at SPX 1085 today. Technical objective for this buy is about SPX 1140. Will reassess the technical picture if and when we get there.
Thursday, May 06, 2010
Reading the price
Last week i posted that we are in a sell the rallies mode and the status quo remains. However, i personally have not sold any rallies so far, given the way the decline started - with a huge gap-down and no decent rallies to position short.
Although the exchange has busted all the trades below a certain treshold, what remains on the chart is a big wide range bar (100 points wide) on the daily charts. We should continue to see many inside bars within this wide bar range, for the next few days or perhaps weeks. The resolution out of this wide range bar will determine the price direction and targets for weeks to come. If we get a daily close above 1167, then we have seen a bottom today and we should head up to SPX 1270. If we get a daily close below 1065, then SPX 950 becomes the downside target. It is very easy to say the trend is down here, as easy as it was to say the trend is up, just 3 days back. The reality is we are in a highly unstable trading zone. I guess it will be lot's of fun as we whip around in this 1065-1167 area the next few days, before the market makes up it's mind. Trade safe !
Although the exchange has busted all the trades below a certain treshold, what remains on the chart is a big wide range bar (100 points wide) on the daily charts. We should continue to see many inside bars within this wide bar range, for the next few days or perhaps weeks. The resolution out of this wide range bar will determine the price direction and targets for weeks to come. If we get a daily close above 1167, then we have seen a bottom today and we should head up to SPX 1270. If we get a daily close below 1065, then SPX 950 becomes the downside target. It is very easy to say the trend is down here, as easy as it was to say the trend is up, just 3 days back. The reality is we are in a highly unstable trading zone. I guess it will be lot's of fun as we whip around in this 1065-1167 area the next few days, before the market makes up it's mind. Trade safe !
Wednesday, April 28, 2010
Sell the rallies mode
Lots of yo-yo action in the last two weeks. With the break of the 1190 pivot, we are back to sell the rallies mode on the hourly charts. So far there is no evidence of any bottom to go long. If there's any, i will update here.
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