P&F Chart School

[James48843]

Well, that one came out of nowhere!

Now showing a double-top breakout. No idea where it's going next.

If you look at the chart on pure data only, we SHOULD drop back down a bit now. There is new support below us, however.

But then again, this was driven by outside news, so I have NO IDEA where that will take us next.

View attachment 6080


Good luck.
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[JTH]

James

Thanks for the updates. I don't always get to keep track of P&F charts on a daily basis, so it's nice when someone reminds us there has been an important change.

 

[James48843]

Just an FYI-

We just got a "High Pole Warning" signal.

We hit the first support level- 792, and bounced off it. There are two other support levels close by- 780, and again at 770. Each of those could act as resistance. We'll just have to wait and see what happens.

Here is the chart.

View attachment 6117​

Whether those levels- 792, 780, or 770 hold, we'll just have to wait and see.​

Good luck.​

 

[James48843]

The 780 level held quite well yesterday afternoon.

We'll have to see what happens from here, but there is a good possibility that was it for a while. Next stop- back higher?

Good luck.

 

[James48843]

A quick read on two charts to look at.

First is the daily P&F chart- which we have been following here for some time.

View attachment 6132

Three points of interest here to take a look at.

First, point #1- we started to get a reversal on Friday. Not unexpected at all, considering we've had a huge move positive again this week. the market really wanted to take a breather. But what is just as interesting is that even though we had some softness early in the day on friday, Friday afternoon activity picked up, and we ended on a positive. That shows me there still is some kick left in this thing.

Point #2- and this IS significant. We still have that bad old Bearish Resistance Line right above us. In fact, until that is clearly broken, there is no doubt this is still considered a bear market, and all bear market rules continue to apply-

Those rules include being prepared to see downsides unexpectedly- and be prepare that when we hit up near the bearish resistance line, we're likely to get bad pushback, and lower numbers ahead. It's been this way since we went BEAR first back in October of 07 time frame- and ti continues to this day- the big red line is a ceiling over top of us.

Which means- continue to beware.

Now- to point #3. And this one is what is most interesting to me today.

Point #3 shows me that for the first time, in a LONG time, we've got a floor (at around 795) which is on an upslope from the previous floors. Before, the bottoms would be roughly even, or even lower, than the last couple of floors below. And we regularly hit the floor, and then continued downward.

This time, we've got a sloping floor. Which means that even if we do drop back down into the 790-795 range, there are several other points right there close by that can act as additional resistance. So the likelihood of going much below that 790 mark is slimmer than it would be otherwise. 790, 780, 765 all seem to be resistance points that will be ready to kick in, should some outside factor suddenly hit, and the S&P head southward. That SHOULD give me time to bail out at 765, should that one not fall. Below that, is a long way down again before we hit resistance, but I am gambling that we've got some buffer built in right there.

Anyway- we'll just have to wait until next week to see what is going to happen. My gut tells me a little lower, but not a lot lower. I tend to think the 666 we saw IS going to be the bottom. So we'll just have to wait and see.

Now- to the other chart I saw- which gives me more hope.

By the way- both these charts are from my favorite charting place- http://stockcharts.com . You can get lots of good information from them- please visit them and see for yourself.









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[James48843]

Now- the second chart I am seeing- which backs up the one above.

Here is the daily chart off http://stockcharts.com for the S&P 500:

View attachment 6133

What I like about this:

Point #1- Monday this past week, we fell back to the 50 day moving average. For the last few months, that has been a top, and every time we crossed above that line, within days we would fall back below it. So I was watching Monday as it drifted back down and under the 50day moving average.

Point #2- UNLIKE what happened the last time we crossed above the 50 day moving average (Christmas, New Years,. and then shortly after wards during the santa rally), this time the 50 day ACTED AS A FLOOR this week, and we bounced back upwards for the next four days straight. this is significant because it is the first time in a LONG time we've held above that 50 day moving average.

Point # 3- The Chaikin Money Flow (CFM) indicator continued to move in a positive direction- showing that money is starting to come back into the market. It was negative- most negative right down to the 666 low in early March- and has been in positive territory for only a short while. this chart says the CFM is still gaining in strength as more money is pouring back in- no sign of a letup yet. Which leads me to believe that as long as we keep more money coming in (watch CFM for signs of a falter), then we'll continue to have good results.

Read more about the Chaikin Money Flow indicator here:
http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:chaikin_money_flow_c

that's all for today-

I am expecting a little softness on Monday, but then we MAY have another good week ahead of us. I don't know, but that is my hope today.

Good luck.

Cross fingers- hope we climb up past that big, bad red Bearish Resistance Line on the P&F chart, and hope that money flow continues to rise going into the market. That's what we need to truly break this big, bad bear that has been eating us alive since October 2007. I think we're close- we'll just have to wait and see.

Like my son says in the car- "Are we there yet, Dad? "

Almost, is my reply.

(And my hope).




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[XL-entLady]

Excellent analysis, my friend! Tried to give you rep points again, but I can't yet. And I agree with your recommendation of stockcharts.com, too. I couldn't anything I do in the financial markets without it.

lady

 

[Guest2]

Excellent analysis, my friend! Tried to give you rep points again, but I can't yet. And I agree with your recommendation of stockcharts.com, too. I couldn't anything I do in the financial markets without it.

lady

Thanks James, I added a Rep Contribution for Lady Too !

 

[James48843]

... Tried to give you rep points again, but I can't yet.
lady

Hint: Spread your rep points around- you have to give good rep to others before you can give it to the same person twice. Giving rep to others allows you to free up the ability to go back and give it to someone again a second time.

 

[turbo23dog]

Where do you give rep points?

 

[XL-entLady]

Where do you give rep points?

On the upper right hand side of each post is a scales symbol. Click on that.

Lady

 

[James48843]

WHY TODAY WAS SIGNIFICANT:

Today was the first day since MAY of 2008, that the Bearish Resistance line overhead has been punctured.

We got a nice move up - last weekend I said soft on Monday and Tuesday, and then I expected a solid move, and sure enough, we got exactly that.

take a look at today's move- punching upward through that nasty red Bearish Resistance Line which has haunted us for almost a year. We last poped a blue line in March of 2008, and by May, it turned ugly red ever since. Now, for the first time since then, we've broken the jinx:

View attachment 6164

We moved solidly above the red line today, and formed a new, blue bullish support line for the first time in a long time.


Is the bear market over with? Probably not.

But it DOES feel good to FINALLY break something that has been killing us for a year.


My prediction: Celebration tomorrow too. Maybe even into the weekend. No pause tomorrow- just more upward force for at least another day.

We got an ( Link: ascending triple top breakout ) today.

Here is what Stockcharts.com says about a triple top breakout:

"This implies that the price level is a more significant area of resistance (area where sellers are willing to sell the stock and create supply that outstrips demand) than what is seen on a double top. The breakout above this level implies that the buyers are now creating more demand than there is supply and therefore the prices are breaking out. A double top followed by another double top, or three tops, each higher than the previous is recognized as an ascending triple top breakout. The idea is that demand is continuing to outstrip supply on an ongoing basis.. "


I'm going to finally take a breath tonight, perhaps there is life after all.


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[James48843]

P.S.-

I see 825 on a downside as very, very likely in the next few days.

Not sure if that will be all, but I think we'll see it very quickly, and very soon.

 

[James48843]

Very interesting stuff happening right now. I enjoyed the rush into the market in the last hour today. That was nice to see.

The chart today gave us a "High Pole Warning". This is the second high pole warning in the last couple days. The first one petered out, and we moved upward again. This one? Well, I kind of have a feeling it may drift upward some more tomorrow anyway, despite the high pole warning. In any case, the are just below us, in the 825 range, is looking like it will act pretty solidly as resistance, at least initially on any pull back.

Here is the chart:

View attachment 6179

First, I have marked the "High Pole Warning" up in the top. In regular action, that would signal a sharp drop about to happen. Not sure if it will do it now, but it very well could.

Next: I've marked as "#1"- a line to show that we've retraced back to the top of the LAST little pullback we had. That little string of six "O"s from last week, is now acting as a sort of a resistance point today. Pushing back when we were down, then allowing it to recover nicely in late afternoon trade. Nice.

Next: I've marked as "#2"- what happened today. We got some pullback until we were equal with the last time we were here. When we hit it, we bounced right back north again. Nice. That tells me there is still money on the sidelines looking for opportunity to jump in, which bodes very well for us here.

Finally, I've marked as "#3", that 815 to 820 range, which appears to me, at least today, to be the lowest point to expect to fall back to, should we get some bad news in the market somewhere over the next day or two. A drop to the 815 to 825 range is to be expected here- after that, I haven't a clue.

Anyway, it sure is nice seeing that blue line of support underneath, at least as a temporary change, from the bloodletting of the last year or so. I'll take what I can get for postive vibes there days.

Tomorrow's forecast? I haven't a clue. I'd say perhaps a carryover from the late trading today- solidly higher one more time, before we get another push down for a breather. I am personally looking for a good exit point - hoping to catch a rest, and then back in once we drift lower. For the time being, anyway, I'm in, and we'll ride it out.

Best of luck.


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[mick504]

Thanks James....I like your charts you present. I've never learned that much about charting...but I think it's the way to go. Kind of like a road map...already travelled and where to go next. Anyway it's interesting and appreciate the time you put into it. Thanks!

 

[Medic72]

I agree, very nice of you to post these, with all the little notes you are teaching people like me who have no formal chart training. ( i look at everyone i can find, but don't understand most of them)

Thanks again!

 

[James48843]

Pretty interesting day. Still lots of money flowing into stocks- and that showed up today as we wiped away yesterday's "High Pole Warning", and replaced it today with another "Ascending Triple Top Breakout".

Here is the chart: #1 represents the Ascending Triple Top Breakout:

View attachment 6197

#2, however, shows that it isn't really a triple top, but a QUAD top breakout forming here. Four times now we've buckled the seat-belt and gotten a nice ride.

Now, the last two times, we went down next, exactly half as far as we went upwards the time before. So I am thinking to myself- this isn't a pattern that can be sustained for a long time.

I think we need a little pull-back, and soon. Maybe by tomorrow afternoon, but then again, maybe not. Sooner or later we'll get a rest, but the moneyflow continues to pour in from the sidelines, and each time it does, that bolsters the chance that the next move down will be higher, and not lower, than expected.

WE have to keep this in mind- we've had a nice run north already this month. The Economy, when you look at the real numbers, is still having lots of pain. So it figures that some kind of outside news- I'm not sure what it is going to be....anyway some kind of outside news is GOING to knock this one down pretty soon.

The good news is that weve now solidly broken the jinx red bearish resistance line which has hounded us for more than a year.

The bad news is that I still see, in these charts- lots of things that say we'll see sea-saw action ahead.

That's it for today.

My prediction- MAYBE one more day of postive stuff. But sooner or later, we need to take a pause.

Good luck,
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[Guest2]

Nice ! Bullish price obj.

 

[James48843]

Nice ! Bullish price obj.

Yes-


However, you will note that that Bullish Price Objective of 1065 first appeared as a revision on March 19th- almost a month ago. Here is the chart from that day:

http://www.tsptalk.com/mb/showpost.php?p=213910&postcount=561

Whether we reach that 1065 in this cycle up, I am kind of doubtful. But since it's there in black and white, and has been since March 19th, I am going with the flow and staying invested- at least for now.

P&F charts are always interesting. They are very, very old- pre-computer technology. But they tend to show things that you might not otherwise see if you are looking at other kinds of charts.

Any little tidbit of information is nice stuff to have.

Good luck!

 

[Guest2]

Any little tidbit of information is nice stuff to have. Good luck!

Thanks James, always a pleasure and informative !