50 day ma

The market gapped down and broke the 50 day ma briefly before recapturing it at EOD. I think this is the level to watch as a breach of this level will likely bring lower lows. And now that we officially have a government shut down, the excuse for bears to take control is in front of them. So we'll just have to wait a few more days and see how all of this plays out. Looking at the waves, I extended the labels and made the entire structure a 5 but this is a very choppy structure. So the market might just be preparing a base for a new rally once all the political stuff goes away.

Short Term Trend = Bearish

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. 

Short Trend is confirmed bearish

The market gapped down a bit today but didn't do much the rest of the day but this bearish move managed to turn the short term trend bearish, so time to be careful with longs. At the same time, there seems to be a falling wedge like pattern favoring the bullish side. Despite the market being down for 6 of the last 7 days, it's been only a 2% bearish advance so far. But I guess it will all come down to how the house will vote on the health care bill, Obama believes Republicans are bluffing.. we'll find out soon.

I btw did not sell my Google longs, I want to see how the market reacts to the 50 dma first. Have a great weekend!

Short Term Trend = Bearish

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. 

Market is in waiting mode

The market attempted a counter rally today but got stopped right at the Trend Average. So still waiting to see if the structure is really done with its 5th wave and just starting a bounce or planning to test the 1680-65 level. The market has corrected enough to launch a rally and if there's some sort of resolution to the whole debate in Washington over the budget, the market will be headed to another new high for the year. I guess it all comes down to how the Republicans will vote, considering there will be Congressional elections, my guess is that they will not want to take the blame for a government shut down and damage to the economy. We'll find out soon.

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. 

5th Down Day

We got the 5th straight down day today, a "record" bearish streak for the year. Looking at the waves, it looks like the market was done with just its micro W3 yesterday and today the market worked on its final 5th wave. There is however a potential Head and Shoulder (the IHS is obviously invalidated) that targets 1680 so we'll see if that is what the market wants to do. Also, we now have 2 consecutive closes under the Trend Average but the number is still going up so it might start turning down if we get something more decisive. The excuse for the "sell off" is debt ceiling issue, which includes Senator Ted Cruz (whom I am sure we will be hearing from for many years to come) speaking for 21 hours straight in the US Senate about de-funding Obamacare. What I want to know is if anyone was crazy enough to sit through the 21 hours to keep him company. The good thing is many people who need insurance will finally get it, the bad thing is we are probably headed towards much higher inflation in the not too distant future. Which in itself is not that bad if you have fixed interest debt but the very group of people that Obamacare will help, might end up suffering as well.

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. 

Market Update

The market tested 1695 early today and bounced from there before reversing again in what seems like a micro W2 or a B wave. Also, there is an Inverse Head and Shoulders set up that targets 1716 so we could see the market in rally tomorrow if pattern succeeds. Today's down day is the 4th in a row, which ties the most down days for the year set in August. The SP500 has not had 5 consecutive down days since December 2012 when the market was in the low 1400's, so odds favor a bounce.

I bought back Google per my plan yesterday and hopefully it will make it to $900 again on this leg? Lastly, someone asked me on the forum on China ETFs and this article lists a few good ones to consider:

China ETFs

I will probably diversify towards consumer and tech on my China holdings and reduce my exposure to financials in the next few months.

Short Term Trend = Bullish

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. 

4th Wave?

The micro 4th wave I was tracking did not come to fruition and instead I now a completed W3>W1>W3 of LT Int W5 finished at 1730 and I am assuming we are seeing the first leg of a W4>W1>W3>LT Int W5. This is the first time I use the ">" symbol to mean "of" and obviously this is my own creation to better pin point a wave withing a series of waves. Tomorrow we could see 1695 tested for the final bearish micro 5th but if that breaks then the next layer of support is in the mid 1680's. There is a good chance the market will test the 50 day ma at some point during this correction so we'll see how this count evolves. With Syria and taper fears out of the way, the next excuse is the debt ceiling debate which if resolve would be the perfect excuse for yet another rally to another new high for the year. A deal must be reached by mid October, so exactly 3 weeks from now. And I won't be surprised if we get a repeat of what happened in December, where a deal was reached the very last minute. Republicans want to give Obama a hard time on healthcare, my guess is Obama won't budge. I just hope they don't mess with my mortgage interest deductions!

I will be going long tomorrow if I see support tested, just not sure what to buy just yet.

Short Term Trend = Bullish

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. 

Market Update

The market finally had a somewhat substantial pullback today after rallying for almost 2 weeks with very minor corrections. There are many ways to interpret this pullback but I am going with a W4 unless 1704.95 gets breached. The reason I am not labeling this the top of W3 just yet is because of the micro count that starts from 1681. A normal 5 wave impulse calls for 1740 from 1681 so we'll see early next week if this comes through. I ended selling my VXX position at a minor loss since it was hovering around my buy price despite the market being down for 2 days in a row. But the plan is to buy it back even cheaper if that new high comes to fruition. Trading VXX is like playing with fire, so I am extra careful with this one as this as speculative as it gets. And btw I wouldn't recommend UVXY or TVIX (leveraged VXX) to anybody, they are so risky and the decay so substantial they should be illegal.


Have a Great Weekend!

Short Term Trend = Bullish

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.