200 day ma again?

The market bounced today as I was expecting but it was stronger than I had imagined. Should the C wave come Monday or Tuesday, it would have to be an equally strong bearish wave that should take us to the Fib retracement area. And like I said yesterday, the ideal level to start the new rally (the Santa Rally) would be the 50 day ma so we'll see if it happens early next week. I ended up shorting to hedge my longs at 1256 and I will be setting my stop to break even as soon as it moves to the 1250 area in case the market plans to start the rally without the retracement.

Have a good weekend!

More Downside

So finally we get a clearer picture of where the market is going. And now I can put some labels on the waves and predict the next move with more certainty. So far I was right on a lower low in the upper 1100's, on where the market would bottom and where the top would be likely so let's see if I can keep the streak going. The odds of me guessing all these moves are minuscule (1/1000's) so I might be very wrong on my next guess but we shall see :) I think the market is doing a double ziz zag from the top of Wave 1 or A and we should see some sort of bounce or sideways trading before going into a proper Fib retracement area. The level I think will provide the bottom will be the 50 day ma which will probably be around 1220 and this level holding is a must for the rest of the rally to continue. Today the TA is at 1237 so the market closed below it and another close tomorrow signals a change of trend. So the plan is to stay put and load up on margin long at the 50 day ma.. once we test that level, I think we will see a rally to 1300+, perhaps even 1400.

Sideways Correction Continued

The longer the market keeps trading sideways the higher the chance we're going to see a rally to break out of this range. But anything is possible at this moment since the market is waiting for the outcome from the EU meeting. By looking at the market I'd say there is money on the sidelines ready to jump in as soon as good news come out of the summit while those with positions are in a wait and see mode. So we'll just have to wait for couple of more sessions to see what happens next. So far the 200 day ma has served as an area of resistance and should the market break convincingly above this level, we might see 1300 next.

I am staying put with my longs until I see a good selling spot or until the market breaks the TA which is currently at 1229 and rising.

Sideways Correction?

The market challenged yesterday's high again today and unless it drops hard from here, this is starting to look more like a sideways correction/consolidation before another hard push up. That would change the labeling of the wave structure and the estimated downside on the correction so I am watching how the next wave unfolds. I said couple of days ago that if the market made another push up I would probably sell all my longs so we'll see how far up it goes IF it happens. As a general rule, if the market were to go up 90 points above the TA I will sell everything automatically and wait for the TA test to re-enter.

200 Day MA Reached

So the market finally did make it to the 200 day MA as I had been predicting last Wednesday and I am again assuming the waves are now complete or near completion and we will see the TA tested along with a proper Fib retracement. Obviously the market could put in one or two more bullish legs but odds favor a break imo. I took more profit today at 1265 and should the market put in another bullish leg I will sell all my longs, two more bullish legs and I am going short as it will be a no brainer. We just need an excuse to start selling and it will happen tomorrow or the next few days.

Correction

The market attempted to make a run towards the 200 day ma at 1265 and it almost got there in the W5 I was posted about yesterday. So I see now a 5 wave structure complete and the correction has started. Ideally, the corrective wave would take the market down to the 1197-1221 area before launching another rally to 1300+. Alternatively, the market could trade sideways to consolidate and then go to the 1300's. Whatever the case, December should a good month for stocks. I used the early morning rally to take profit on all margin positions and will be buying everything back at the test of the TA hopefully next week? I am hoping to see a big rally, sell all positions and end the year in cash. We shall see..

Also, today I updated the TA signal which should have been updated couple of days ago. The return of this signal since July is 31% without leverage, an amazing return if you think about it..

Have a great weekend!

More Upside

The market has been consolidating and it seems like we will see a bullish wave starting tomorrow or Monday to challenge the 200 day ma at 1265. That's assuming this is a normal W5 and not an extended one. However, bulls are free to take this all the way up to 1275 or even 1292 before going into a real correction down to the 1220-1230 area? so I'm looking to take profit on the next bullish wave and reload at the test of the TA on the correction. The TA is currently at 1200, so once the correction starts it should take a while to get there.