Uptrend's Account Talk

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The market stopped near the 61.8% fibonacci when computed off last Thursdays SPX 1066 low. This and all my indicators told me that it was just a gigantic bounce. I have noticed that when the candles have huge ranges, the bounces tend to be huge. Tonight the futures are red, and I expect the SPX to slip below resistance at 1153, probably by tomorrow. I am thinking the market just finished the 4th wave up of a 5 wave decline - we will know soon enough. Congradulations to the folks who cashed in today, but I am saving my may trade for a better entry point. The waves and indices must be in harmony for an upmove, and right now the trend and wave count is showing down.
 
Market open; and monitoring from the cave. Up, down whipsaw, buzzsaw, long, short sideways, bear flag, bull, flag, no flag, heavy commute, light commute, stall, crash; I am waiting for it all. Sipping another cup of mojo.

Now, if the market is completing a 5 wave down, as I think it is, then we come to the rule of wavelengths: if wave three extends (and the heck it did, with the SEC scratching their heads - but I call it a normal correction), then wave one and five should be equal. On the SPX wave one is 37 points from the top, wave three is 154 points, so by deduction wave five must be 117 points. Subtract 117 points from the swing high of 1164 yesterday and what do you get but a double bottom matching the February low at 1047 (February low is 1045. Lets see if this plays out.

On the other hand, if a bull flag is forming, then by bull flag rules the flag should take at least 5 days to form (but not more than 10-15) and should form on declining volume. If the volume picks up it's death. The upside breakout would add the height of the pole (42 points) from yesterday to the breakout point. Now, what would cause that?? - oil seeping into wildlife refuges, greece fire, fannie and freddie losing our $, europe in a no fly zone, US unemployment creep etc.
 
SPX hourly chart rolling over and pointing down. So far a doji formed on the daily chart contained by the 50 ema. I am impressed by the size of the last few daily candles; tells me the volatility has increased and we may see another huge move soon. Volume is less today, but still above average. VIX ticking up and hanging on to its 50 ema. Red by close?
 
SPX red doji just showed up. Slide into the close. The one day Monday crowd cleaned up; other bag holders may fear tomorrow. TNX ticking down and bonds up; harbinger of the next fall.
 
Sipping another cup of Mojo. Yiiip. Happy days are here for the herd while it's keg stands, power hour, body shots and Irish Car Bombs in celebration of it being safe to buy the dips.

I believe that what we are witnessing here is the transfer of shares from the institutions to the public. The media can't let go of this drop being the consequence of a market glitch which is purely false. The warning signs have been ominous for weeks, if not months.

Good observation on bonds.
 
Slowly but surely, the market sinks. My eye is on the SPX 1100 area with the 200 ema just under for support currently coming in at 1100.66. It is also the bottom of a developing trading channel with horizontal support. Might be a place to jump on the train. Aside from the panic fall, it has been tested once. Based on time considerations, I am thinking landing will be in 3-8 trading days (for sure by the end of options X).
 
Trend is still down. Advance is being capped by 50 ema (in blue). Stochastic and RSI still trending down. MACD trying to bottom, but below the 0 line. Gray rectangle is an area of resistance, that is now support, but can the market stay there?

View attachment 9391
 
SPX cash market must stay below 1181, or else we have a wave violation with a 12345 EWT down structure. So, on the upside if 1181 is taken out I will concede the uptrend is continuing. However, the trend is still down on the breadth indicators. Also of interest, if we ignore that 10 minture panic spike down last Thursday, and take the 1094 low on Friday, the market has retraced exactly the 0.618 fibonacci to 1071 yesterday. Funny how numbers work. I am still in the rollover camp, with a new leg down. New target if we ignore the spike; is 1084, else 1056
 
It appears wave 5 is underway to the depths. Still have my 2 trades in my pocket, just waiting, and I am sure an opportunity is coming soon when this wave is over. The market is flirting with the lower end of the nuetral zone of SPX which goes from about 1140 to 1180.

For bonds, TNX broke down through uptrending support since last October, but is backtesting the long term declining support line since the high in June 08. This line has power, so bond yields won't fall much further.

The breadth indicators are still negative. The USD has again tagged it's upper channel boundary, but is not a reversal candle; just needs time to work off, and can still advance. When the reversal comes; am looking at 84.29 and 83.17 for support. That may be the EFA trade, but no hint of let's dive in today.

Thinking this downtrend bottoms sometime next week.
 
Uptrend said:
Thinking this downtrend bottoms sometime next week.
Click to expand...

Thanks Uptrend !

The longer I'm in is all the more I'm like BULLISH to the Max.




So I'll ride it out.

My TSP was just over 8% - at the close of yesterday and I wondered if I'm getting anywhere near actually losing -- which is why I checked.

Anyway I'm staying 70/30 -- S/C with matching contributions

My Chief just stopped by and told me she put in a $500 bonus which apparently showed up on my check (today I guess??).

Anyway -- told her 'Wow thanks a lot ' -- then motioned her to take off so I could play on the computer. :rolleyes::nuts:
 
Where is the market to go in a week or two. Well, here are some possibilities:
1) A H&S may be in the making on SPX with the market possibly reversing off the neckline matching the February 09 lows, near 1045. Remember the market almost got there on May 6th, before mysteriously reversing at 1066. Some say the PPT started a massive buy program to avert a crash. It's a job you would assume that the PPT would do, as it is in the job title. If a H&S is indeed forming, the market will make another run to the 1150 area, and we will all want to board that train.

2) The market might stop at the 200 ema coming in near 1100. There has been two hits already and pins through, but no closes below. Usually the floor is weakened so the 3-4 hit does the job. On the other hand, this area would be in line with the lower edge of a quickly expanding bollinger band.

3) The futures could reverse by morning and market hold the 1135 Fridays close, and rally back up to around 1154, bufore a pullback. This is the continuing bull scenario. However, it does not smell like a bull; more like a dead cat that can't bounce.

The US dollar is hitting 87 and might pullback to around 83 soon for consolidation, before blasting off to the low 90's. There could be an I fund play when this happens, before the uptrend is resumed. On the EFA chart I note that the downdraft is very close to the key support at 49.2 again. Double bottom or floor to be broken is the question. If the dollar falls and the market rise can get in synch, then the I fund will really pop for a few days. This could start soon.

Watch and learn. I know I do. Cheers while we wait.
 
Update 1 today. Euro has turned lower so, the US markets are falling again. On the upside the bounce level to watch is SPX 1146 with 1164 at the high end, while the next targets down are 1129 and then 1112.

VIX meter has > 0.71 ticks to almost 32 so moderate fear has returned. Anything above 40 is real fear, moderate fear from 30-40 and and fear subsiding in the 20's.

SPX last 3 hourly candle shows a possible evening star in the making which spells down.

The US dollar as tracked by the dollar futures is trading down at the moment, after hitting a 87.21 high. Looks like support is near 86. The US dollar could reverse to 83 now, or tag 86 and head on up to the low 90's.

Bonds as tracked by TNX are up slightly, so prices slightly down.
 
On the positive side the NYSE McClellan Oscillator is showing a positive divergence, just like February. and EFA is again on the 49.3 area of support. The dollar may pull back to the 83 area. Thinking about a position. Decisions Decisions!
 
Took a 35% position in I. Betting on a bounce with the USD falling from 87 to 83 support. Restu of US market could turn as early as tomorrow.
 
Euro appears to be putting in a temp bottom. EFA holding support. Bonds prices ticking down. The McClellan Oscillator has a positive divergence with a higher low (like February 10 and Nov 09), and stochastic starting to line up as well. Tomorrow could be green. Since my bushwhacker sys works in the daily timeframe, it has not made any calls, other than the current F fund.
 
My bushwhacker system system has flipped to a buy today; C,S,I.

There are dragonfly doji candlesticks on all the major indices yesterday (bullish) and EFA and the Euro as well. There is a gravestone doji on the US dollar (bearish) and I expect a correction there to at least the 20 ema at around 84, and it could overshoot to 83ish. The McClellan Oscillator has a positive divergence and heading up, so breadth is picking up. Some longer term indicators I watch are turning positive. Believe it or not, this may be the bottom of the recent correction. At any rate it is wave 1 up, and what I believe could be a bullish 12345.

Key support on EFA held. SPX is near the 1146 pivot and this must be cleared for the advance to continue.
 
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