S&P Possibly in Short Term Bullish Triangle

The ES appears to be forming a short term bullish triangle that should result in a narrowing range of price activity probably the rest of the day before shooting higher in a terminal thrust towards the 1945 level.  Thrusts are terminal moves, so once complete, it should immediately retrace to at least the 1939 area.  To support the triangle outlook, you can also see volume waning as the triangle progresses.  My best guess is that overnight, or early in the morning for the US session, a news event will trigger the triangle's wave E and then a sharp move upward for the thrust will occur.  There is not much heavy news to cause this action, but that doesn't mean it won't occur, as many unforeseen events end up moving the markets sharply anyway.

For the longer term, I am still bearish as you can see from my previous post.


PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&Ps Finishing up Minor Wave C Down

My call for lower levels has certainly been fulfilled and the wave count down does not appear fully developed, suggesting at least one more attempt to the downside.  There are been two attempts to take out the 1800 support levels that have failed and resulted in over 100 point bounces.  However, one more downward move suggests that 1800 will be targeted again, and this time it will be taken out.  Once that floor is removed, I'll be looking at the 1700 level to provide support and perhaps put an end to the selling.  A rally about the 1970 area might negate the bearish outlook.  Until then, I'm looking for short term shorting opportunities, and right now looks like a good time to do it.

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&P in Wave C Down

Looks like wave C is finally getting underway and has plenty of room to the downside.  Many of my momentum indicators on the 4hr and Daily charts are firmly down.  However, on a short term basis, 30min charts, the market is oversold.  The structure of the decline suggests further levels will be achieved before any meaningful bounce occurs so my bias remains bearish.

I drew some fibonnacci retracement levels for the move up from ((x)) to B to get an idea of where the market may pause and bounce.  I'm looking for around the 78% level at 1914 to conclude wave ((iii)), but 3rd waves can extend well beyond what's expected so by no means am I trying to get long there.  It's just an area I'll look to take some profits and perhaps lighten up some risk.

The trend remains firmly down as long 2090 is not broken, but preferably I'd like to see 2055 remain intact to keep the series of lower highs in place.


PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

GBPAUD Long (Forex)

If you look at the daily GBPAUD chart it is clear that the pair is in a solid uptrend.  The grind off the high at the 2.24 area is clearly corrective.  Price has formed a nice double bottom and is moving strongly and impulsively higher.  I see a clear continued move higher in this pair and like going long since the long term trend is up still.  If I'm wrong, look for a top near the confluence of Fibo retracement levels in the 2.1126-2.1518 range.  But I feel this pair could still move significantly higher.

When trading this pair, keep in mind it can get very wild so protective stops should be wide and therefore proper position sizing is key to proper risk control.  In addition, this cross can get really wide spreads up to 15 pips, so be aware of the time you trade it as the Aussie and London sessions tend have the widest spreads for this pair.


PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&P Rally Getting Tired?

It's tough to make a strong case against the S&P rally since it keeps defying all odds and floating higher and higher.  But from a technical analysis standpoint, I am skeptical of higher levels at this juncture.  The wave count is still consistent with a continued decline towards 1800 before resuming another strong uptrend.  This is contrary to seasonal positioning as the "Santa Claus" rally would be getting underway next week and would not support this wave count.  So I'm cautious on both sides ending the year and prefer to day trade this market and not swing trade at the moment.

One thing I have been watching is the action of the small caps (Russell 2k) relative to the overall stock market (S&P).  Up until a few weeks ago, the small caps were lagging the overall market quite a bit.  But recently, the small caps have shot higher and are attempting to close the gap.  I think that small caps still lead the way for the overall market as they are a good risk barometer, but still nothing tradeable here, it's just another thing to watch to keep you honest when trading the market.

Also, although the Nasdaq as a whole is keep pace with the S&P, major tech stocks like Amazon, Microsoft and Baidu are showing signs of exhaustion, which could be the early signs of a pullback as well.

Conclusion: I don't like this fractured market behavior and the apparent exhaustion of some major stocks that also can be seen as risk-appetite indicators.  In addition, the wave count off the wave A low is very corrective looking with its overlapping waves.  However, the market appears that it just wants to move higher regardless and it's tough to try and fight that trend. So I remain cautiously bearish, but am looking for only day trades on market indexes, and also for shorts in individual stocks such as Microsoft, LinkedIn, and Baidu.


PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&Ps Ready to Decline

Needless to say, I've been caught off guard by the extent of this rally and I keep trying to call tops and am getting hammered.  I don't see much gas left in the rally tank so I'm here again projecting a top, at least short term.  The rally counts nice as two 5 wave moves for rally waves (a) and (c) within ((z)), that should complete a very deep wave B.

I have propriety indicators that are very good at indicating overbought and oversold markets, and when price closes back within the overbought or oversold level, it usually marks at least a short term extreme.  Then a reversion to the mean occurs.  Friday's bearish close closed back underneath the overbought extreme, so a reversion to the mean of about 70 S&P points is likely to occur.  When you add that the decline also confirms severe bearish divergence on various momentum indicators you can make a strong case for a decline of significance starting soon.

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&P Futures 1hr

This correction higher is going on way too long to keep calling it a wave ((iv)).  I simply analyzed and labeled the chart according to a price closing basis, where waves ((iv)) and ((v)) completed several weeks ago, completing Primary wave A.  This long choppy slop sideways to up since then is Primary wave B.  Which, by the way, should be concluding soon as it is possible to count the final rally higher as an impulse wave from numerous different perspectives.

Primary wave C down should get underway quite soon, perhaps as early as this upcoming week.  C waves are 3rd waves, and impulsive, so it should be quite a strong affair downward.  I'm looking to add to my short positions on a topping formation and/or strong move down on solid volume.

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&P Futures

Not much to write about as the S&P's have been consolidating sideways for several weeks, waiting for the decline to a new low for wave ((v)) or 5.  It's certainly not pretty, but the count remains valid and the sideways chop can break down into a WXY combination correction, with the X wave being a triangle.

I still like the overall bias being down and for the wave ((iii)) low to be broken before any meaningful rally will occur.  So I continue looking for shorting opportunities for day trades, and holding short for swing trades.

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&P Futures Triangle Continues

The S&Ps continue to consolidate and wrap up a triangle.  Although not ideal, and enough to make an EWP purist pull their hair out, the above triangle patterns are valid.  Don't get too caught up in technical rules and guidelines at this point, the important element here is that the market is not rallying impulsively off the lows on the year and it is moving sideways after a large move down.  Triangle, or consolidations, are simply pauses in the preceding trend.  In this case, the preceding trend was down, and hard.  So the market will thrust lower to new lows on the year once this consolidation is over.

Wave E finishes triangles and they are usually the result of a news event.  Next week we have CPI, Retail Sales, and some FOMC stuff later in the week.  Since it's Friday today, and we're ending the triangle pattern, it's quite possible we'll just chop sideways all day today, and possibly Monday until we get that news event for a sharp pop and then massive reversal lower.  But keep in mind, the news event doesn't have to be a scheduled event, it could be anything...something can happen in China, Europe, or also in the US that's unexpected.

The bottom line is that I'm positioning myself for a sharp thrust to new lows on the year, which should occur within a week or two.

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&P in Bearish 4th Wave Triangle

Boy was I wrong in calling for immediate selling this morning.  It appears there is a 4th wave triangle forming, and should be at an end.  The "right looks" fits well with the above count if you compare wave ((ii)) to wave ((iv)) now as they both took up a lot of time.  If the count is correct, waves (c) and especially (a) of the triangle cannot be breached (with the exception of overnight trading in futures as there is light volume and I would not use that to negate a triangle.

If the 4th wave triangle is correct, massive selling should get underway tomorrow almost immediately.


PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&P Futures Should Continue Decline this Week

The chart on the left has OHLC bars and the chart on the right just using closing levels.  From an EWP standpoint, the sub-components of Minor wave 1 make more sense when analyzed on a closing bases (right chart).  But normally, I want to use OHLC bars to analyze wave counts so I'm tracking the short term action on OHLC bars (left).

The market declined as expected on Friday after the jobs numbers came out.  The sharp rally in the last few minutes of trading Friday was most likely short covering from folks who did not want to stay short over a long weekend.  But I highly doubt it was any meaningful buying .  As a result, selling should resume, and do so heavily, on Monday.  Because of that, I used the late rally Friday afternoon to get more short.  The wave count shows the S&P futures in a wave (iii) of 3 right now which means heavy relentless selling should rule the day in the foreseeable future.

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&P Futures

The persistence of this rally caught me off guard a bit but fits well as a wave (ii) counter trend move. Several of my intraday indicators show the market overbought here. I'm not sure we'll get a breakdown this morning, but ideally the rally should stall here and perhaps break down 30 minutes prior to the close. The jobs report should then trigger wave (iii) down tomorrow morning. This count remains valid as long as 1992.75 is not broken. Although even if it is, we could still work the 3 wave rally off the wave 1 low as a wave 2 correction. More after the jobs report Friday...


PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&P Futures

This wave count using closing points on the 1hr time frame is tracking well.  Friday's fractured market, as I pointed out, was a good indication that a top was in place as Monday and Tuesday this week has shown significant weakness.  And after two days of heavy selling, the bulls managed only a modest float rally higher.  Not good for the bulls.  Friday is the big jobs report in the morning, then on to the 3 day Labor Day weekend, so I expect the market to probably float around sideways to slightly up Thursday, then huge moves Friday morning after the jobs report, then volume and volatility should taper off significantly after a few hours of trading as traders take off to enjoy the long weekend.

The wave count suggests a major declining phase is underway and that I should favor the downside for my trades in stocks and their derivatives.


PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&P Futures Setting up for Major Decline

The triangle count I posted earlier got crushed almost immediately after I posted it, lol.  But that does not change the bearish count overall.  This count makes sense from a practical EWP perspective, but does not from a purist fundamental EWP perspective.  The reason is that 2nd waves are usually sharp and deep rallies while 4th waves are usually flat and shallow affairs. This count above is opposite of that as wave (ii) is flat and shallow and wave (iv) is sharp and deep.  Although the count does not violated any EWP rules, it does contradict EWP guidelines for wave characteristics. But if I tweak the bars a little, we get a cleaner count in my view...

When using closing lines instead of intra-bars we get a much more ideal wave count.  Note that waves ((ii)) and ((iv)) are much more proportionate, and that the sharp rally late last week aligns nicely with 2nd wave characteristics (wave 2).  An alternate view of this count would be to replace wave 1 with A, and wave 2 with B.  Either way, wave 3 or C down will be impulsive, strong and probably quite deep.

The market action Friday was pretty bad for the bulls.  The market was very fractured with varying markets and sectors up with others down most of the day.  This type of "fractured" behavior often occurs at tops.  That type of behavior doesn't always result in in tops, but most tops do exhibit this type of behavior.  If the bulls don't come out strong on Monday and hold the gains throughout the day, I expect this market to resume its decline in wave 3 or C quite soon.

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&P Futures

The bears were in full control the last 3 trading days and shaved a huge chunk of capital from the markets. The bears have run out and short covering and "discount" buyers are in control. But make no mistake, the selling craze is not over.  There is at least one 5th wave to male new lows before we can even consider if the selloff is over or not. I'm waiting for the bears to regroup and getting ready to go short again since the larger trend is still down.

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.