P&F Chart School

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Happy 2009 for all!

James,

No doubt the pure technical indicator is a good sounding board to be considered. The SPX has risen above the the 20 and 50 DMA, which were previous resistance to the upside. We have broken above them and held so far. Hopefully the 20 and 50 DMA will become strong support to avoid going down much. There will be corrections but I believe these are pretty good support areas. (No guarantees of course!). If we go down next week, I plan to buy in a bit more from my current 80G/20C. Best of wishes!

P.S.

I am not sure exactly what it means, but perhaps someone can pitch in to contibute a bit of clarity to the following. Somewhere I learned that a W pattern that is broken to the upside is quite bullish. Isn't this the case of the SPX breaking out to the upside in a W formation? Of course, all of these are technical analysis concepts that can drown in a Sea of fundamental analysis and/or any surprises in global political problems, etc.
 
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Nice sell off today, as I expected. We ran up too high too quick.

Now we're cooling off a little, although I kind of expect it to drop back down into the 880 range shortly.

Here is the P&F chart for today.

View attachment 5382

Techincally, it's still showing a postive bullish price objective, now at 1105. However, as mentioned in the post a week ago- that hardly seems likely based on that big ugly red heavy line above us. That is going to act as a stopper right up until the point there is a breakthrough.

My gut tells me a slight drop to 880 ahead- perhaps 80% likely. A little less likely (maybe 50%) is a fall to 860 or below. I MAY take that as an opportunity to bite back in, but so far, nothing shows me any reason why I should be invested in the market at the moment. It ehter reverse again between 880 and 860, OR we take another sloping downward hit, and continue with the bear. Not sure yet where will a month or two from now.

Remember, true changes in the direction of the P&F chart are driven from outside influences. The happiness of getting rid of 2008, and the Santa rally of the New Year, seem to be coming face-to-face with the reality of higher unemployment, missed earnings, and generally nothing-but-bad-news coming out of our economy.

Maybe a bright swing around the time we get a new President- but other than that, Janaury is looking pretty tired already.

Happy investing.


​
 
James,
I am not a maverick; and, if need be, I will backtrack on my previous statement that I would buy more if we dropped this week. We had a big drop yesterday and unemployment numbers appear to be foretelling a bigger drop yet. However, support seems fairly strong at the 50 day simple moving average of 888.54 in the SPX yesterday. This area coincides with your gut feelings that "a slight drop to 880 ahead- perhaps 80% likely". Uptrend posted the weekly SPX chart this morning, which shows a short term trading channel that seems to depict pretty strong support near 880. This might be a good entry point (or not). We'll see if the bully pulpit is able to meet expectations and to keep the balls in the air! Best wishes!
 
James,
Just now, unemployment claims came in lower than expected at 467K (consensus 545). We have yet to see the numbers tomorrow. Your opinion is highly valued. The day IFT tracker is still out of order. I am sure many will appreciate your posting today before IFT deadline at 12 Eastern time.
 
I see they added a HIGH POLE WARNING today. That sounds like such a dirty term, like we're fixing to get the shaft... :suspicious:
 
JTH said:
I see they added a HIGH POLE WARNING today. That sounds like such a dirty term, like we're fixing to get the shaft... :suspicious:
Click to expand...

From Chart School:

"The high pole warning is given when a chart rises above a previous high by at least 3 boxes but then reverses to give back at least 50 percent of the rise. The reversal implies that the demand that was making the prices rise has given way to supply pressure. The pattern is a warning that lower prices could be seen in the future. "

High Pole warning is consistent with what I have been seeing. I'm still on for 80% or greater chance 880, and more than even odds we'll see 860 shortly.

We'll see.



 
Sorry I could't post earlier today- something prevented me at around 11:35 when I tried.

What i tried to say then was : Gut tells me 80% + chance of 870, 75% chance of 865. Then we settle in to see what happens next.

if 860 breaks down below, we're in trouble- with the next resistance point being somewhere around 800.

If the 860 holds, and it starts back north, then we're in a good place, as it should then run up nicely.

When the 870 breaks (we're at 870.51 as I write this) then a new red "O" should appear, and that should fill in the chart nicely.

if 860 breaks, then it SHOULD chance from showing a 1100+ bullish price objective, to a red, negative price objective. Don't know how red just yet.

Also noted that unemployment is looing very similar numbers and pace to the 82-83 downturn. If that is in fact true, we're in big trouble over the next six months.

Thats all for today. Good luck.
 
Alright- here is what I am seeing now.

We had a couple good bounces at the 870 level over the last day or so. We've filled in the downward leg. Now, we're still showing technically that "High Pole Warning" from a couple days ago, and, sure enough, it dropped right after that appeared. But it only dropped to around that 870 support level, and bounced off several times.

Which puts us here- right at the 870- level.

Now, two things can happen from here. If the chart is consistent, we'll EITHER have a nice move upward shortly, this time only to the 910 level or so, maybe 920,

OR

We'll continue with the downward momentum and the next stop downward will be in the 820-810 range. Here- I've marked up today's chart with those data points:
View attachment 5433

Since we've had a nice move downward over the last few days, yet the bullish price objective mark hasn't changed (And won't, unless we fall below the 860 mark), then I'm going out on a limb today, and calling it a more likely upward than downward from here. I'm seeing it as 60% chance of 900 in the next few days, while 35% chance of the plunge downward to 810. The balance - 15%- is the odds it will stay right where we're at, and float around the 860-870 level quietly.

I know, I know, 60% isn't much. But hey, that's about the best I can do in this soft economy. I gave it a little more than even odds because we're coming up to the inauguration, and there is bound to be some grabbing at straws out there for positive news. We haven't got anything but negative news for a while.

Plus, by the way, a friend sent me a Citibank-Smith Barney flyer yesterday, that was calling a bottom soon. A nice three-page brochure that basically said the worst seems to be behind us, and now is the time to buy in at Citi-Smith Barney.

Of course, I don't know how much creedance to give to a company that had $25 billion disappear, and then had to ask fro $45 billion in bailout money. But hey, they're the experts, right?

Anyway, I am taking the gamble based on the numbers and moved myself into stocks at the close last night.

If the breakdown occurs, and we get a formal technical reversal, then I'll move the P&F chart autotracker account into a sell signal. But as for now- it's still in the "hold mode" for at least one more day.

Good luck- and happy investing.


​
 
P&F chart shows a breakdown and a "Long Tail Down" appearing today. And the new Bearish Price Objective of 745.

So I'm moving the P&F Chart autotracker to a "sell" signal, and moving to "G".
 
James48843 said:
P&F chart shows a breakdown and a "Long Tail Down" appearing today. And the new Bearish Price Objective of 745.

So I'm moving the P&F Chart autotracker to a "sell" signal, and moving to "G".
Click to expand...
Thanks for all of your work James. Your charts and opinions are a big factor in my IFT decisions. Using your charts, Tom's market commentaries, and my own dart throwing methods, I managed to increase my TSP account nearly $2,000 last year. Not bad, considering I have coworkers that have accounts that are down $50,000 from the previous year!

My plan is to put another 10% into the market if we get down to 800-820, then another 10% if we get down to the price objective of 745. I might even move all in at that point, because the bounce we got the last time it hit that mark would have been hugely profitable had I taken advantage of it! I let my emotions hold me back and missed out on some profits. I don't plan on doing that again!

Good luck to all!
 
WOW! What a drop! I didn't expect the market to drop this fast, especially not today! I figured we'd get an Obama bounce with the inauguration, but that didn't work. Anyone think the market will bounce tomorrow? Missed the deadline today, so I'll try to sneak a little in tomorrow.
 
On Monday, we got a "Double Top Breakout" signal. I moved the autotracker back into stocks as a result. The new upward "bullish price objective" is 935.

I'm still seeing pretty much weakness. If we do make it back to 935, I'll be surprised. I think we'll hit back up to 860 + pretty easily, however, above that it will be a little harder plowing.

Here is the chart:
View attachment 5545

I have highlighted about where we are now, and the 935 target that the chart is showing now. That "brown X" I drew is to show that we're level with the last couple of reversal points to the left of us. Of course, those were bottoms before. Now they COULD act as upward resistance here, which is perhaps 40% possible. I think it's pretty weak overall. But technically, it is showing we'll move higher, so I'll give it the benefit of the doubt- and I have moved into stocks accordingly.

I also painted in a few blue lines underneath. I did that to incorporate the power of positive thinking- I don't know if we hit bottom yet, or if we still have more downward to go, but it's always nice to look for positives at a time like this.

the good news- the P&F chart is beating the C fund, the S fund, and the I fund so far this year.

the bad news- it hasn't taken a lot to do that- as all three are bloody red less then a month into the new year. 77,000 lost jobs on monday isn't helping our stock market turnaround, neither will the other jobs lost over the next month or two.

In other news- the ETAC is meeting again very soon- I saw a meeting notice in the federal register a few days ago, although I didn't bookmark the date. I am still trying to contact some of the ETAC members to share with them that the costs have gone up, not down since the Board cut off more than 2 moves a month- perhaps we can convince the ETAC to ask the Board to loosen up- in order to cut costs. It's a slow slog.

Have a great day- and good luck.


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I moved a little in last Thursday, but I'm jumping out today. I think the market is running up on hopes of a new stimulus bill being passed, but then the profit takers are going to sell the news and run the market down again. I'm hoping I'm one of the ones making a little profit today!
 
JTH said:
FYI

This week, 2 P&F patterns have gone from Bearish to Bullish.

Both $SPX & $EMW

Today, $EMW is currently stuck above the 50MA and under the 20MA and has a Double Top Breakout.
Click to expand...

$EMW went bullish today ;)
 
Viva La Migra said:
I moved a little in last Thursday, but I'm jumping out today. I think the market is running up on hopes of a new stimulus bill being passed, but then the profit takers are going to sell the news and run the market down again. I'm hoping I'm one of the ones making a little profit today!
Click to expand...

Great Call Viva!
 
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