Monday, September 22, 2014

Short Term Support Tested

I did a quick indicator study using recent McCellan Oscillator Data. It says may likely have some additional bit of downside on the DOW even under a ST bullish scenario.  

Here is the study:



Those lows have always come from just below the area of the 5 ema drawn of the lows on the 2 day Dow.  Currently, that sits at DOW 17057 and rising. We do not have to hit that area, but the market always has in recent indicator cirscumstances. 

So that would be the results of the study, i.e., that a bounce should be expected between here and a breach of the 5 ema (lows) on the DOW.

If this is a terminal wave the indicator study may not matter, but I am not assuming terminal wave absent a breakdown. The study is a rough study I put together this morning. I encourage you to do your own if you are interested in it. 


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Here is the support on SPY.  We had our five waves up. The question is whether that is terminal or not. ST bulls are safe buying this dip off the 88.6 Fibonacci Retrace so long as that pivot low holds. Chart:




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The market tested short term support this morning. As long as this area holds the short term bullish nature of the market still has a chance to run from here.  Below this and the bearish weekly scenarios come into play.

Chart:



There is always a bull path and a bear path. We cannot know which path the future will choose. As always, do your own due diligence, read the disclaimer, and make your own investment decisions.

Peace, Om,
SoulJester

Thursday, September 18, 2014

Standing down on the Bullish Scenario

Final addition to today's post. Here is the scenario I like the best here.

(1) We top out in this weekly time frame most likely between here and SPX 2024ish.

(2) We sell into a November 27 cycle low to the area of the 50 SMA on the Weekly S&P 500.

Here is the chart:



From there, assuming this happens, I will assess these bigger bearish data points that are flashing. I am going to look for a price action setup over the next week for this move to the November cycle low.

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There is a lot of bearish divergences in the short term internals on this high. This is the end of day Transports chart. There is a very long term channel sitting right here, which also jives with the Dow Fibonacci level mentioned below. Here is the Transports Chart:



Here is the long term chart, where I have moved the Bearish Wave 5 scenario up to Red. We are in the long term decision area for the two scenarios now. This 173900 area is the projected area (it will not be exact) and is hitting at the same time Transports hit the upper channel line. There has been no breakdown on the US indexes yet, so the Bullish Dow 35k scenario lives. 

Chart:





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Just an addition. The updated long term SPY chart:




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This is still bullish, and could be very bullish, but we are nearing that DOW Fibonacci level. Dow Fibonacci Level.



I am going to stand aside for now and see how this area plays out into the Equinox. I am uncertain here. But for that uncertainty, the market has broken out and is bullish. Given my uncertainty, however, I am stepping aside here and going to ponder this a bit.

There is always a bear path and a bull path. We cannot know which path our future will choose. As always, do your own due diligence, read the disclaimer, and make your own investment decisions.

Peace, Om,
SoulJester

Wednesday, September 17, 2014

The Fall Bearish Scenario

This is a follow up to my post today about the next level of interest. Level of Interest. Today, all the stops laid out in that post held easily and the bullish move off the cycle low continued.

The DOW held particularly well and locked in an end to the correction by putting in a higher low above all previous lows. This likely locks in the uptrend. Now, the question becomes is this a 5th and terminal wave off the recent August low?

This would be the count and today and the prior level of interest would both be likely top candidates for a 5th wave (5=1) depending upon how one counted the first wave up off the low. Here is the DOW chart:




Today we put in a new closing high on the DOW and also hit the first 5=1 potential top. I am continuing to use price action and track this as bullish until the market tells me it is not bullish. The Bearish setup would occur if we had no follow through and closed below today's candle low. Until that happens, the market has not reversed and I continue to assume that the wave 5 (if that is what it is) is continuing to unfold. 

IF the market does close below today's low, I believe that will mark both the end of the wave up off the August low, and also the longer term wave up as described in today's earlier post. Level of Interest. I need to see price action reverse, or a hit on the fib confluence. I am not going to guess that this is a wave 5 completion today. I will wait for the market to say.

The reason price action has to be respected is these wave patterns can fail, no US index has broken down (Belgium and the DAX have), so this could still be very bullish and continue to run absent a break of support. 

When this completes, I have the next significant cycle low on November 25-27, 2014. Under the bearish scenario the market would conservatively be trading at least as low as 1900 by that cycle low date. Conservatively.  Until the market reverses, there is no need to think the market has been reversed. However, I wanted to lay out this scenario ahead of time in the event the market breaks bearish at these levels in the next few trading days.

If we do top here, it would be bearish from my cycle analysis standpoint, which significantly increases the likelihood of the 125 SMA on the daily SPX chart breaking. If that breaks, as I have mentioned, then we can likely call an end to the entire move up off the 2012 lows. 

There is always a bear path and a bull path. We cannot know which path our future will choose. As always, do your own due diligence, read the disclaimer, and make your own investment decisions.

Peace, Om,
SoulJester

If the rally holds, the next area of interest.

It certainly is not a given that this rally will hold, but the price action is bullish, so I continue to track the B wave low bullish scenario as I have posted.  Recent Bullish B Wave Update.

Something has bothered me a bit about this analog move off the August low.  It has been spot on with respect to timing having delivered both the September 4 high and the recent bounce low. What has bothered me is that it has been weaker in price movement than the prior analogs. Now, the bearish scenario in the intermediate chart has this as a terminal wave. Bearish Intermediate Scenario. 

I did some looking at this issue.  In the long term bearish scenario (the Wave 5 scenario), we have had a long term fib level at DOW 17391. Long Term Bear Scenario. In looking at the recent waves on far smaller time frames, we have Fibonacci confluence at that level:



It stands to reason, therefore, that if this move up off the cycle low holds, that the level of serious interest from a short perspective would be that DOW 17390 area. That area has the potential to finally put a top to this terminal wave.

From a short term perspective, this could break down with the FED today, but until it does the market is bullish off the cycle low and has not reversed. Here is just the chart updates with the stop areas I am watching. They may or may not get spiked today, so I am watching for closes on the charts:






That DOW 17390 hit could come right at the September Equinox (Sept. 22/23). The next cycle low I have is November 25-27, 2014, so that would be the anticipated first low off that Equinox high.



There is always a bear path and a bull path. We cannot know which path our future will choose. As always, do your own due diligence, read the disclaimer, and make your own investment decisions.

Peace, Om,
SoulJester

Tuesday, September 16, 2014

Bullish B Wave Low is Likely In

2:30 ET UPDATE

I spent some time with the bullish small cap analog. If you remember, we have 9 month cycle support under us in small caps. Small caps have been lagging. This would be a time for catch up. Here is the scenario that also accounts for the smaller October 17 cycle low:


Of course the FED could screw this up this week, but that is the price action play off this cycle low. Until the market is reversed, the market is bullish and not reversed.


SMALL CAP UPDATE (1:40 ET)


Just a quick update on small caps. Here is the bullish scenario laid out on small caps off this low:


As indicated in the orignal post below, we have a strong move coming off a cycle low. One does not want to be guessing that the market will reverse that move any time soon. Unless today's low is taken out, that September 17 cycle date should be honored, this is it, and we should be looking bullish. Until the market is reversed, the market is not reversed. IMHO.


EQUITIES

The cycle date projected a September 17 low. Today's action suggests the anticipated low is in a smidgen early for that bullish B wave. The scenario calls for a significant move higher into October. Scenario.  This move is likely part of a larger correction that will produce another low around October 17 near the 125 SMA support line. 

On the other hand, no analysis is perfect and there is a chance that October low will not happen and this will just run to SPX 2080 from here. For now the market has reversed and is trending up and we can adjust later for the October low scenario when that move indicates the market trend is reversed again.

Here is the chart of the NYSE (the breakout is clearer on the NYSE chart right now). The stop on that move is recent lows:


Because of the divergences in the indexes I have been carrying two cycles this year. The first cycle low was August 5, which produced a significant cycle low a couple days later. The second cycle low is September 17, which may have just produced a very significant cycle low.



That is why as bearish as that weekly candle looked last week, I am not changing from the bullish B wave scenario until the market takes it away. Right now the market is acting very bullish and this could run to SPX 2080 very quickly from here.


CURRENCY

AUDUSD has also performed as expected. AUDUSD Post. I am not ready to move the stop yet, but it looks like we nailed it. Here is the daily chart:




CLOSING

There is always a bear path and a bull path. We cannot know which path our future will choose. As always, do your own due diligence, read the disclaimer, and make your own investment decisions.

Peace, Om,
SoulJester