All time highs to be challenged?

The market continued its bull run today and it managed to put in another very bullish close. I thought the market had a good chance of putting in a right neckline for a potential Inverse Head and Shoulders around the 1669 level but the market just ran over that resistance level. So I have the market in a bullish W3 and depending on where it tops and where the W4 bottom is, there is a reasonable chance 1709 will be taken out. That's obviously assuming the 5 count continues uninterrupted. Technically, the 5 count that started at 1628 has already met its price target but since it morphed into a nested 1-2, it is free to extend. I think the speech tonight by Obama will move the markets, so we'll see how traders deal with it. Not too many people are for unilateral action so maybe common sense will set in for Obama. Why make more enemies when we already have enough??

I am enjoying my longs and it's very tempting to take profits but I will leave them as is until I am retired!

Main S&P 500 Trends*

Short Term Trend = Bullish

Medium Term Trend = Bearish trend being challenged

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.

Short term trend has turned bullish

The market was able to overcome the 50 day ma and ended up closing strong. Also, there daily MACD has a confirmed bullish cross and with this we now have higher probabilities a sustainable rally might be in the works. The concern of Fed tapering QE3 has been somewhat relieved with the expectation of a "light" tapering instead of an abrupt pull out. Also, the issue with Syria might be at a turning point now that Russia has proposed a reasonable plan. If the Syrian government accepts the Russian proposal of handling over control of its chemical weapons to the UN or some sort of international body, chances are the markets will fly past its all time high. Putin will end up looking like a man of peace and Obama like a warmonger. I guess they gave Obama the Nobel Peace prize (who in the world thought of that one is beyond me) a few years too early..lol. With that said, this could still be a B that is topping but I for one won't be shorting anytime soon.

Main S&P 500 Trends*

Short Term Trend = Bullish

Medium Term Trend = Bearish trend being challenged

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.

50 day moving average

It was a volatile day today with the market dropping over 1% early morning before recovering all loses to finally test the 50 day moving average at 1665 before reversing again. And while I had been expecting a 50 day ma test and a reversal for a few days, what comes next is not as clear. The market could be putting in a bullish nested 1-2 which would imply a break of the 50 day ma resistance and a change of trend to the positive side early next week. At the same time we have to keep in mind the potential of the bounce from 1628 being a B wave plus the congressional vote on striking Syria on Tuesday, so it's all open to interpretation. The long term trend is positive so at least there is no guessing there.

I ended buying back VXX at the test of the 50 dma and sold it on the reversal for a few months worth of coffee money, so I am out again and waiting for the next short term trading opportunity. My long term investments are looking better now days so that's good, just hope Obama doesn't go too crazy launching missile strikes and makes this a quick adventure so as to not ruin the markets. I get the feeling that a strike on Syria goes beyond just punishing the regime for allegedly using chemical weapons, there are other motives that are unclear and we're just being told a story that can be sold to the public.

Have a great weekend!

Main S&P 500 Trends*

Short Term Trend = Bearish trend being challenged

Medium Term Trend = Bearish

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.

Market Update

The market made another higher high today and it seems like it was to test the 50 day ma before another significant correction. The real question to me is whether the entire correction from 1709 is over or not, looking at the chart on the daily it looks like the market is ready for a bull run but as far as wave structure the ideal would be one more significant leg down. I guess we'll just have to wait to see how the market reacts after the actions we take on Syria and tomorrow's jobs numbers. A strong jobs number will add selling pressure in the short term but in the whole context of the economy it means the conditions will be there for a longer bull market. With the rest of the world doing better and better we might just have a period like 2005-07 when markets around the world were booming. And btw I don't think a strike on Syria will do much to oil prices, in the market sense, this is just an excuse to correct.

Main S&P 500 Trends*

Short Term Trend = Bearish trend being challenged

Medium Term Trend = Bearish

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.

Close above TA

Markets managed to stage another strong bounce and now we have a higher lows and higher highs but most importantly a solid close above the Trend Average. One could also argue for a double bottom formation but only if the current wave is a bullish W3, if that is what the market has in mind then a complete 5 wave count would target 1687. If the 5 count fails then I would expect a trading range between 1626 and 1661, so we need to see one or two more sessions before getting a better picture of how September might trade. The market has already corrected more than enough in time since the 1709 high and oscillators have been reset to the point where we could see a big rally. But as long as the Syria issue remains in the background, I would assume that would keep a lid on the market? economic news around the world are on the positive side so in the longer term I am expecting higher highs.

I am still in cash and waiting for the right moment.. like a ball player waiting for the right pitch.

Main S&P 500 Trends*

Short Term Trend = Bearish trend being challenged

Medium Term Trend = Bearish

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.

50 day ma test?

The market opened up bullish today and managed to test the Trend Average before giving up a good portion of its gains. This whole Syria thing makes the markets (US markets particularly) nervous and the next significant move seems to be tied to what the US decides to do militarily. So in the meantime we might see the market stuck in a range between 1626 and the 50 day ma (currently 1661) until traders make up their minds. The current wave from the low could technically be labeled as a B to be followed by more downside on a C but as I said last week, I don't believe waves are able to predict actual events, just investor sentiment. So I will be waiting out for support/resistance levels to enter a trade to be on the safer side and avoid being a bag holder on these wild intraday moves. Personally, I prefer they give military support and weapons to Syrian rebels (if the allegations are proven without a doubt) as opposed to a direct strike as the only thing we might get is another civil war with yet another Islamist party calling for the destruction of America and millions of dollars (which we the tax payers have to pay) completed wasted.

Main S&P 500 Trends*

Short Term Trend = Bearish

Medium Term Trend = Bearish

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.

Market Update

The ABC wave was confirmed today and we have a potential set up for more downside, potentially targeting 1600 if the bearish wave today was a W1 . But as I said yesterday, the market has to deal with the 1620-26 area first and I suppose what we get next week will depend on what decision the Obama administration takes on Syria. Which so far looks like a limited strike after the UN inspectors leave and possibly after labor day. Personally, I feel the administration should get congressional approval to do this as our representatives should have a say in this since citizens can't do a referendum. But I guess it's just wishful thinking as the executive branch does pretty much whatever it wants now days. I just hope this doesn't come back to hunt us in the future. I can't think of anything positive that has come out from US intervention in the Middle East since the 80's.

Anyway, no trades today as I prefer to see the market's reaction after a decision is made. I believe wave analysis and TA can gives traders an advantage during normal market conditions. But trying to predict siginificant future events with these tools are no better than a coin toss. 

Have a great and safe holiday weekend!

Main S&P 500 Trends*

Short Term Trend = Bearish

Medium Term Trend = Bearish

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.