P&F Chart School

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OK_ I'm going to go Waayyyy out on a limb here with tonight's theroy-

and remember, it's just a theroy, nothing more.

Today the S&P tried to break higher- but it ran out of steam in the last hour. It DID make it up enough to generate that expected new single "X" higher, as I said last Friday. I expected today would be just a tad higher, but then I said I thought the steam would run out, and we'd start to retrace a bit.

That's about what happened today. Morning started out pretty good, all day it struggled to tack on a few more points, and then, in the last hour, it petered out and couldn't hold the gain. (I bailed out friday into "G").

Here is how the chart actually looks right now:


I've marked in two orange lines. The first shows the new green "X" that formed today, when we crossed that magical 1400 line earlier today.​

Then I also penciled in where I expect it to go next--back down to fill in that missing 1364 number. I think we're out of steam on the upside. In fact, by all accounts, the down side could be back down around 1350. I know there is a lot of money on the sidelines, so I don't know if it will make it back down to 1350, but I am more convinced that we will see 1364 pretty soon.​

I am not sure if we'll start downward tomorrow, or if things will perk higher for one more day. I am hoping for a nice dive tomorrow- so that I can buy back in at lower tomorrow, and be setting pretty invested for the start of the new month. Don't know for sure when the drop will come, but we should expect a nice wave down over the next couple of days.​

Now, this is only perhaps a 60%-70% odds- at least that's what my gut it telling me today. I COULD be all wrong. I've been wrong before.​

What is going to make the difference are two things-
1. What happens in the rest of the world overnight tonight- (remember, Japan is closed, I think for some kind of holiday), and
2. What the FED decides to do later this week.​

The last time they met, we had a rate cut. And the markets loved it for an afternoon, and then pounded down lower the next day. I'm thinking the same things COULD happen here- we could get one day up with the fed, and then reality will set in, when people realize that the fed is only dropping rates because they are worried that the economy is softening.​

And now we're worried about inflation. Gas prices zooming up. Food costing more. Inflation is working it's way through the economy, and soon the FED will be much more worried about inflation than in jump starting the econmy. So, if the FED annouces that they are done moving interest rates, then the whole shebang could go out of whack again, and we could have a tumble in the markets. We'll know more by the end of the week.​

Anyway- this is where I stand tonight. I'm out, I'm waiting to see what will happen tomorrow, and hoping to be able to buy lower later this week.​

We'll see if it works out that way.​

Be careful out there. As always, this is not advice. YOU do what is best for YOU, making your own decisions- don't listen to me- I work for a living.​

Some people are saying that it's coiled up ready to break much higher. Personally, I don't think so. At least not yet. I think we'll have another down wave before we break higher once again. This wave action- up and down, has been pretty consistant lately. My account it going to risk that we'll do it again.​

Again, I could be wrong. You decide what you want to do. This is what I am going to do- I'm out, and going to patiently wait for an opportunity to jump back in lower that here.

Money COULD be better soon- what with the "stimulus" checks all floating out there soon. And I got my tax return back this past weekend. Maybe some others did too, and maybe that is what we saw earlier today. Who knows for sure?


IF it goes down tomorrow- watch for the 1370 mark for the "O"S to appear, and then perhaps the 1360 mark could get broken this week as well. We'll just have to wait and find out. I think we've seen the highs aobve 1400 for this wave- I don't think we'll cross 1410. It's possible, but highly unlikely in my book. I'd say perhaps a guess of 30% chance of crossing 1410, but a 60% chance or higher of moving down to below 1370 in the next couple -or three- days. We'll see.

Anyway-
Good luck- and be careful out there.

THIS IS NOT INVESTMENT ADVICE. YOU ARE RESPONSIBLE FOR YOUR OWN DECISIONS.​
 
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Thanks James I enjoyed your analysis. I too have been patiently sitting back looking for a good opportunity to jump back in before the end of the month. I just hope I jump in low enough at the right time before everyone else does. :D
 
I still think your right about the retrace. How does 1330 strike you
as being a reasonable level of resistance based on the P&F Chart?
:worried:
 
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Amazing.

That held up today much better than I expected. Yes, we're off slightly from where we were a couple days ago, but I can honestly say I was expected it to be weaker than it has been.

We don't know where the Fed will come down tomorrow- The market is expecting another cut, and that seems to be priced in. If recent history is any example, that would mean a runup after the annoucement. But it's also worked out that those runnups lately have been followed within a few days with lower numbers.

AND- the big question of course is "Is that all there is..? "

If the fed decides that one more is enough, and says they are then neutral while waiting to see the results of their actions so far, then al bets are off, and we could take a tumble tomorrow.

We'll just have to wait and see.

I am still feeling we'll get 1350 to 1360 in the next few days. we'll have to wait and see.

As far as 1330?

I guess that's possible, but I am much more comfortable calling a 1360 ahead than a 1330 ahead. 1330 may be too much to ask for, especially after seeing how strong the last two days have been.

Sitting tight. Holding- and waiting for the right opportunity.
 
James48843 said:
Amazing.

That held up today much better than I expected. Yes, we're off slightly from where we were a couple days ago, but I can honestly say I was expected it to be weaker than it has been.

We don't know where the Fed will come down tomorrow- The market is expecting another cut, and that seems to be priced in. If recent history is any example, that would mean a runup after the annoucement. But it's also worked out that those runnups lately have been followed within a few days with lower numbers.

AND- the big question of course is "Is that all there is..? "

If the fed decides that one more is enough, and says they are then neutral while waiting to see the results of their actions so far, then al bets are off, and we could take a tumble tomorrow.

We'll just have to wait and see.

I am still feeling we'll get 1350 to 1360 in the next few days. we'll have to wait and see.

As far as 1330?

I guess that's possible, but I am much more comfortable calling a 1360 ahead than a 1330 ahead. 1330 may be too much to ask for, especially after seeing how strong the last two days have been.

Sitting tight. Holding- and waiting for the right opportunity.
Click to expand...

Thanks James, your indispensable ! :)
 
On April 25, 2008, last Friday, the SPX 20 DMA was at around 1361 and today it's at around 1370-1371. I am trying to make sense out of this rising 20 DMA. Some TA analysts subscribe to the idea that rising moving averages serve as very good support areas. In particular, many traders, including some of us who are not traders, tend to wait an entry point at significant lows such as the 20 and 50 DMA. It is my understanding that many trading programs use these support levels, and thus it helps to become a self-fulfilling prophecy of sorts to see the SPX for example make a bounce at these junctures. There are no guarantees of this happening again, but this is something to keep an eye on.
 
Well, today really through me for a loop.

I was expecting a fall-off after yesterday's annoucement, and the pre-market news this morning that unemployment was up, a gallon of gas nationally was at an all-time high (at $3.72), and some soft earnings reports that came out this morning.

But the market completely blew that bad news off, and ran.

The only thing I can figure out is that people on the sidelines (remember, I mentioned the last few days that there seemed to be a lot of money ready to jump in, keeping it from dropping back down), decided to move in today.

I think the fed saying "that's all there will be for a while", and having two members of the fed vote against the rate cut, (last time there was just one), means that people are interpreting it to mean that the economy is not in such bad shape after all.

So they dove in today. By 11:00 a.m. this morning I decided with my own funds to jump back in, and placed my IFT for today- and went C/S/I split three ways.

We begin the month on a strong note. Of course, it could be that all of you who have been sidelined for the last month decided to buy back in, and those millions of dollars flowing in on the first of the month was just the 500 or so TSPTALKERS who were locked out. Could be YOU drove the rally today!​

Anyway, here is the chart for today. A new high- showing with the number "5" rather than an "X" today, because today is the first day of the fifth month.

I've penciled in the new "5", and then also penciled in the possible downside risk area of the 1360 level.

But my gut is telling me enough has changed that people want to get back in, and we'll have a nice run over the next month up to the 1500 area (1510 is showing as the price objective".) The heard is suddenly bullish with the Fed's annoucement that they don't think they need to cut any more. We'll see how that pans out.

So there you have it. You never know which way things will go.

I'm now "in to win." IFT'd in today.

Cross your fingers.​
 
I have been reading your posts for months. The security software at work won't let me post. You IFT'd in and I IFT'd out today.
I like your idea of the market heading back down to the 1360 range. According to your P&F chart we have a nice trading channel going and I can't believe that we are ready to break out to far because there is still a lot of negative news out there. The job lay-offs are going to start showing up here soon.
BTW thanks for your posts and the P&F charts school I have learned a lot from you and the other members of this board.
 
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Sorry LUV2READ- I've been off TDY this week, and didn't have a chance to post.

Anyway- here is today's chart.

I think we're in pretty good shape- I am thinking we should fill in that gap at 1364 early next week. But not much below that, UNLESS the price of gas really hits the economy hard in the next week or so. Those price shocks have been pretty tough on the markets-

Here is the chart-


What the chart is telling me is at least two more, and likely three more, "O"s on the downside shortly.
So I have penciled in up to three more "O"s before a reversal again. Those are in orange above.

if we get the 1364 gap, that' two orange marks. Below 1360 would get us a third, and I think that's probably 50/50 we'll get there.​

We COULD even get a fourth additional "O" on the downside here-- that would be below 1340, ---I made that one purple-- and even then we'd still keep our bullish spring back going. I think that's only a 30 to 40% possibility, but it COULD happen. We'd still be above that blue bullish support line. But I don't think we'll go taht low- although the price of gas could hammer us some more and we could get there.​

We don't want to break below the bullish support line below us. If we break that, then all bets are off, and we're headed lower in a bear market again.​

But if the 1364 gap DOES get filled in, then the chart will show a classic formation, ready to rebound higher again for another up cycle.​

This last cycle stretched up higher than normal- so it goes to figure we'll retreat now at least half of that gain, and more likely 3/4s of it. But we still seem to be in a pretty good place overall for the future.​

I'm saving a move this month, because I think we'll have another opportunity later to sell high again. We'll just have to wait and see what happens.​


too bad we don't have unlimited moves- because this would be a fairly good set to do it in. Unfortunately, we just have go with the flow, and find a good point to use up the move when we have a very high probability of success.​
 
Thanks James!

I went to the P&F chart site and saw what was up, tried to post the new chart here but for some reason couldn't. I still have trouble posting pictures and graphs.

Thanks for the analysis. I took my F fund profit today, I'm happy! Now just waiting to put more into C/S/I.:)
 
No change in the chart. I'm still thinking we'll get to the 1360-1365 range to fill in that gap, before heading north again for another wave.
I'm TDY all week, so I might not be able to check the charts for a while.
Good luck.
 
I just looked at a P&F Chart for DJW 4500 Complet, which is what our S Fund tracks. It just needs one more X to look like the $SPX P&F Chart. If I remember correctly, the C fund usually leads the way on upswings, the S & I follow. Once the S catches up, they all head back down. Looks like this is happening this week. C fund started back down Friday, is moving lateral now while S fund catches up. C fund not doing much today while S fund is taking off big time. We'll see if C heads down into that 1360 range this week after S gets that next X box.:rolleyes:

James or anyone, any thoughts on this?
 
A powerful amount of money flowing in still, and pushing stock prices higher. Don't know where it's all coming from, but today we got an uptick reversal and new set of green "X's. I wasn't expecting that, and I am still amazed sometimes how much support there is in this market, even with all the gloom and doom about mortgage foreclosures, falling earnings, higher oil prices, etc.
It just amazes me sometimes.

So what is going on? Is everybody putting stock purchases on their credit cards?
 
No change in the chart today- we're showing those three postive "X"s, and a lot of white space surrounding it. Tht white space below and to the right of our current three "X" move here looks bare to me. Bare, or "BEAR". I don't really understand why this segment has appeared the way that it is, and it makes me a bit nervous:


We've had a nice run up already this month, and we've recouped much of this year's earlier losses. But now we're banging right up against that 200 day moving average, the price of oil is seriously goingn to affect all segments of our economy, (gasoline up 30% in 90 days!) and I don't understand what the driver is that brought us here in stocks so quickly. Those are all signs that we have to be REALLY ready to bail at a moment's notice.​

Unfortunately, with limits now, we have to save those moves for when they are really important. I have moved once this month, and have a second ready to go should it be needed. But I really had hoped to stay in stocks for the rest of the month, so I could try and catch some safety of "G" next month, and then be ready to jump back in at a lower level. So far, we've not seen a real downturn yet this month. I can't imagine it going on for much longer.​

But I am in, and hanging on.​

Anyway- let's see what today brings.

I am STILL thinking we head back down to fill that gap at 1364 before the month is over. Only time will tell if that in fact does take place.​

Be careful out there.​
 
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