Beginning of a Big Rally?

So we got the rally I was talking about yesterday and now I really wonder how is this stuff even possible. Technically speaking no one knows the future and I still can't accept the idea of waves being able tell the future either. So that leaves the media picking up on stories to create rallies or corrections.. still, this stuff borders on the weird. But I think the market is indeed somewhat predictable and anyone who has been a reader of this blog would know.

Anyhow, I see the bullish impulsive wave today was a W1 of either a C or W3. We'll probably see a retrace to the TA or 50 day MA and then we should see another big rally that will challenge and most likely break the 200 day MA. So it seems like Santa has indeed arrived :)

Ready to Rally

The market put in another bearish leg almost following the red line I drew on Friday and now I think the market will start to rally. Perhaps we'll see 1199-1200 tested first but I am going with the Santa Rally. Obviously, this is completely against the TA system which call to stay in cash or short at 1249 and the fact that we are trading under the 50 day MA. However, it's been an 11 days of corrective waves and we have yet to retrace 61.8% of the rally from 1158. So any hint of positive news can spark a violent rally. I will go margin long again once the TA gives the signal, as of today the TA has fallen to 1229.

Rally is coming

The market continued its correction today and I think it is over or should be over early next week. The TA is at 1235 so we would need to see trades above that level to change the short term trend to bullish. If there is a Santa Rally, it will start next week so nothing else to do but wait..

Have a good weekend!

Correction Continued

The correction continues and I am inclined to think there will be one more leg down until the correction ends. Whatever the market decides to do, so far all these waves from 1267 look like corrective waves so we should see a chance of mood to the positive side sooner rather than later. In a way, this type of market is great for swing traders as the European issue will be used over and over for sell offs and for rallies. It really depends on the current social mood. Hope we'll get more clarity tomorrow or Monday.

1200 to be tested?

The 50 day support broke today and went to the 50% retracement level of the rally from 1158. The next level of support is 1200 and we might just test that before seeing if we have a rally from there or just a bounce. The way I see it the next bullish wave has to start with a strong impulsive wave, weak waves would imply lack of conviction, especially if there are no closes over the 200 day MA. With this said, I still see this as a correction and a rally should start sooner than later so the market needs to re-capture the 50 day MA asap or risk a sell off.

50 Day MA

I talked about the market targeting the 50 day MA last week and today the market finally tested it (1224). I was almost sure the wave from this morning was going to be the beginning of an impulse wave but all it did was test the TA and now there is a possibility the market will test the next important level which is 1215. Also, the market is now in a confirmed bearish trend since it closed again under the TA so I closed my margin longs at break even and I'm trying to see if the 50 day MA will hold in the next few days. For a rally to take place this level must be mantained so we'll see how the market handles these next few days.

Correction Over?

The market corrected in a strong C wave as I predicted last week but it did not quite make it to the 50 day MA which was at 1222 today. However, it did retrace into the Fib territory and in turn confirming the correction from the wave from 1158-1267. So I am now leaning towards seeing a big market rally from here. Obviously we could correct some more but if the 50 day MA holds then we might see 1300+ fairly soon on an Intermediate C wave or 3rd Wave. The TA is at 1249 so this can potentially turn into a bearish trend but I think the market will recapture it tomorrow or the next couple of sessions. What is interesting is what the market will do after we get to 1300. If it's a W3 then we will rally into January and possibly see 1400 but if it turns out to be a C wave, watch out below!

I closed my shorts towards the end of the day and went margin long and using the 50 day MA as the pivot for this trade.