Monday, January 6, 2014

New all time high ahead?

The bears made an small advance today by breaking the Triangle to the downside and we should know in the next session or two if this is a W4 correction with a new all time high coming or if the market has made a significant top. One thing I noticed on the micro count was the micro W1 had overlapping W4>W1 waves, which technically nullifies the impulse wave. One can't really see it on the 30 minute chart I posted but that wave out of the triangle is not an impulse. Therefore, unless we see a big sell off tomorrow or the day after my guess is there is a good chance we'll see a bullish wave develop to challenge 1850 again. I closed my VXX position for a small loss but I am buying it back on the next bullish wave as the VIX went down despite the market's bearish day (not a good sign for bears). The key levels to watch will be 1813-1816 on the downside, if these levels hold then the bull case is alive and well. If not then down the market will go. The short term bullish trend is being challenged and we'll see if the market can recapture the TA before turning red.

Short Term Trend = Bullish trend being challenged
Medium Term Trend = Bullish
Long Term Trend = Bullish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors. 

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