Sunday, September 27, 2015

Fiscal year end upcoming...

As I step back and look at the weekly chart versus the daily I can't help but to keep looking lower. Bulls love their hammer candles like the ones printed the week of February 7th and October 17th in 2014. Have you paid attention to the one printed 2 weeks ago off the FOMC high?

Below is the weekly chart again and to me it looks as though the line in the sand for this week is around the 1885 level. The bulls are going to have to recapture last Monday's open for any kind of chance to get the push higher. This past week closed on the line off the Feb and Oct 2014 lows. This just doesn't scream buy to this guy. If the bulls can't save that 1885 level last October's low seems inevitable.

On the bullish side of things you do have the Fiscal year, Quarter, and month all coming to an end this week. Bears can keep this in mind for a little protection on the sanity scale. Keep it Simple (stupid).


Thursday Update: SPX seems to have tagged the 1939-40 area via ES overnight. On the day the bulls have to hope it can hold the close of yesterday to expect anything higher. I was stopped out of half my shorts yesterday (profitable from 2003) but my level to add may not get hit today cause it was last night. If the market would cooperate it would find the overnight high again and give me my fill at 1932.

Tuesday, September 22, 2015

September 22, 2015

As I look at the chart this morning the first thing I notice is that ES is trying to hold where it should. SPX needs to break down the 1940 level today to drive it into that 1900-1920 range. I fully believe it has to test the monthly low or at least the daily low close for September. I actually question how low the market would have gone back on August 24th if it were not for pre-market circuit breakers. The reaction off the FOMC high still only managed a back test 40 lower than that days high and was rejected at the channel line I have coming off the November 2012 low. This does not appear bullish and seems like the current bull / bear line. I am posting the daily chart I updated over the weekend. I have only gone back about 5 or 6 months on this one to make my lines a bit more clear.
Thursday update:
I think on the day (Thursday) it would be important for the market to try to catch the support at 1916-1918. If this is lost it most likely revisits at least the September low. There is probably a scalp upside coming into next week but personally I am not interested in that and will continue with the shorts

 Friday update: Satisfied what I was looking for with retest of monthly low and the low daily close for September. At this point it has to break and hold 1950 for the bulls. I stated last week I felt 1972 was a necessary target before 10/2. The market is going to need to hold here for that test. Anyway I would say a near perfect tag of the next line downward trend line was made yesterday. Lower uptrend lines subject to change when we bottom

Friday, September 18, 2015

Banana peels for Bears

Just a word of caution for bears, which I very much am, but this drop and correction of the last few weeks bears quite a resemblance to the drop in 2011, and if that continues, we should see some respectful bounces from the daily BB's before working our way thru them.  I saw some uber-bearish scenarios around, and that could be, but unless we simply crash past the daily lower lines, then we could be seeing a nice set of stair-step waves to a low in the 1700's rather than bear-maggedon.

                                                                                    2011:

Today:

Sunday, September 13, 2015

Short and Sweet with a hint of Downside

The biggest question in my mind is whether this is a 4th wave we're bouncing around in, or a wave 2, but I think the idea of wave 2 is a bit premature and much lower odds at this time (because it implies a meltdown of a size I don't think realistic yet).  All things considered, such as proportionality, shape, location within channels, etc, lead me to believe that we are either still in a 4th wave or have finished it and are starting down in wave 5.

The XABCD layout I'm showing is a crab pattern that targets 1789, and while the ideal endpoint for wave 5 would be on Sept 22, I suspect we get the lions share done more quickly with some bouncing around at the bottom to mop up the last few subwaves into that date.  Also keep in mind that there is a Bradley date on Sept 17 (Fed day), and another one on the 23rd, so we may see some pin action off from these markers.

There are potential ST bullish patterns, of course, and this interpretation will be nixed should we get back above 1993, so we'll know pretty quick whether this is right or not (first target 2018). The post I did back on August 27 (big C wave, a la 2011) is still on the table as well, and I expect to buy the dip somewhere around point D.

I'm sticking with this crab pattern for now, simply because we've made it to the right side of the channel, the move from Wednesday's high came down in 5 impulsive waves, and we've gone sideways in 3 overlapping waves since.


(Sidenote:  While set-up of the crab pattern is there, it will take braking the 1867 low to actually activate target D.)

Monday, September 7, 2015

Labor Day 2015

Staring at the charts nothing seems obvious other than oversold levels are on us. My personal opinion going into FOMC next week is that we won't see price above the 1980 level and fully expect to test 1900 minimum to the downside. The line (red dashed) for me on the week is pretty much the same as last week but slightly higher in the 1935-40 range. Above this area you are probably okay long but a break of this level is bearish in my view. To the upside I think you rely on taking profit when presented the opportunity. I am looking for a lower low before a more sustained bounce occurs.

Since the end of March there really hasn't been a sustained rally. So although we made a higher high in May it wasn't as strong as price may have indicated. Even at the low we only managed a rally for a few days then followed by a few more selling. I am not saying we aren't capable of getting a sustained rally but until this market finds a bottom I wouldn't expect it. A lower low just seems necessary based on charts and indicators and I would expect it ahead of FOMC. I have lower targets but for the time being I would settle for anything about 30 below that 1867 level and perhaps it will only be 15 to the 1850 level. I know my upper end target doesn't allow for Yikes 1993+ level on the week but perhaps that is what a change of trend does. Eventually we need a back test to 2040+ but I wouldn't bet on it until that 93 area above is broke.

1935 area needs to be saved today if the bulls have any chance. I fully believe a break of this level sends us to 1900 minimum (Thursday 9/10/2015)