Intermediate Trend is Confirmed Bullish

The market broke out of the triangle I mentioned yesterday to test the all time high but it finally put in a long overdue top today and now the question is whether the 50 day moving average/trend avg will be tested as I have been expecting. A successful test of the 1815 area would set the market up for a proper looking Inverse Head and Shoulders that targets 1963 so we'll see how the market handles that key level. I see an ABC move from the 1847 high so far but if that turns into a 5 wave count then it targets the 1815 area or today's trend average. Also, there is a micro Head and Shoulders that targets 1824 so the chart patterns favor mode downside. One thing however to keep in mind is that the correction to 1737 was not long enough in time to call it an Int LT W4 so I am keeping in mind the possibility of a Flat being put in that will essentially test 1737 again before rallying. The key to all of this is the 50 DMA, it has to hold for the market to continue to go up. Lastly, the China PMI was just announced at 48.3 which will be plastered over the news. The correction last month started when the China PMI came in at 49.5, so if the market's intention was to sell off then this can be used as an excuse. Never mind that China has been rallying and actually continues to rally after tonight's  "bad" news, this is not about China but about finding a reason for make bag holders out of blindly optimistic bulls.  

I had a choice to sell VXX for a profit at the close but decided to hedge my short position instead by buying back GXC (China ETF). So we'll see if the market sells off in a W3 or starts to bounce tomorrow.

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 Top?

The market put in a marginally new high today thanks mainly to the NASDAQ, however, I think the market is close to topping. Technically speaking there could be a triangle that could break out and challenge the all time high at 1850 but it will have to first break out of the 1843 resistance level. I can't imagine people buying at these levels without a good correction, so I am still looking for a proper Fib retracement and a test of the Trend Avg/50 DMA. I am maintaining my VXX and will be back to my long position in the next few sessions. Also, unless there is some bearish miracle tomorrow, the Intermediate Trend should be turning bullish tomorrow so that's just another indication that we will most likely see an all time high fairly soon (hopefully after a correction so I can sell my VXX and get back long!).


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.

SP 1960 by April?

Another day, another rally. What started as an expected counter rally has turned into a relentless rally led by tech, which implies a risk on attitude. The reasons that started the sell off few weeks ago where really a non-issue (China's PMI, emerging markets) but at the same time the market has reached a bullish extreme and it is very short term overbought. With today's rally we now have a neckline for an IHS that targets 1963 if the pattern completes. Coincidentally, I was doing some calculations on the 5 waves to 1826 and if I were to count that waves as a W1 then we would have a target of 1960-80. However, I still believe we are on the 5th wave from the structure from 1737 because of the NYMO chart and I expect (and hope) the 50 DMA/TA will be tested on the correction. And btw I wasn't expecting the 50 DMA to get tested immediately, I meant to say the 50 DMA will be tested once the entire structure completes which could be today or early next week. There is resistance at 1843 and after that it will be the all time high at 1850.

I ended up selling my short term longs to position trade around 1840 and I'm still holding VXX, so I am technically 100% short now on my short term portfolio. I figured the market will be running out of 5th wave suckers early next week.

Have a great weekend!

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.

Correction to 50 DMA again?

The  market finally gapped down for a change today only to test the 50 DMA and rally again to put in another high for this wave. I was focusing on the W4 triangle yesterday but I should have added the possible ABC move to the 50 DMA, which is what happened in the morning. Now that we have this ABC move from what I consider an SA3 top, I am more confident the rally today is the 5th wave. One could make the argument that the ABC today was for a W2 but I think chances of that are slim as I think there needs to be a deeper correction first. If you look at the NYMO chart I posted, you can see there hasn't been a rally like this in at least a year as the index went from the red line (oversold) to the blue one (overbought) without much of a break. Once the market finds a top, I will be watching the 50 DMA again as a target for a neckline of an Head and Shoulders, given the fact that people and computers bought at that level today I suspect they will do it again on the coming correction.

I got lucky today in that I actually woke up around 6:30 am and when checking the market I noticed the market had not been able to gap down below the 50 DMA, so I sold the VXX I had to position trade at the very bottom and then bought it bought towards the end of the day 3% cheaper, so not that much underwater anymore. If the market does what I think it will do, I will be doing the same exact trade.

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.

Reversal

The market finally took a break today after adding a higher high to the 5 count and the intraday reversal is either a W4 or the beginning of a deeper correction. I see a triangle in the micro count which would fit the W4 scenario, so unless the market breaks today's low tomorrow then there might be some more upside left. There is resistance in the 1830-32 area and if that breaks then we will most likely see the market form a neckline for one huge Inverse Head and Shoulders in the 1840-1850 level.

I'd like to see the market start a real correction asap as I'd like to make money from my underwater VXX position sooner rather than later. But if we do go higher then I'll sell some of my longs and buy them later at a better price.

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.

Market Update

The market continued its relentless rally today and it is getting to the point where the waves are about to exhaust, the chart looks as if a rocket took off. If anyone was doubting the wave from 1737 was not impulsive, I think today clears that up. The best we can do now is shuffle the labels a bit and assume 1792 was the actual (IV). The micro count I mentioned yesterday with a target of 1804 was not the final 5th as I had assumed but rather W1 of what I think is the final 5th. If we go by what the cash market printed, the target for the 5th should be in the 1820's. However, if I count pre-market prices then the target is actually higher as this W1 topped at a higher price and the projection would be in the 1830's. Whatever the case, I am planning to trade mostly long now as unless there is some sort of bearish miracle or another manufactured crisis, the index is probably going for the all time high after a correction (timewise or pricewise).

I ended buying VXX as planned but since I was wrong in my presumption of the final 5th, I bought it way too early in the low 1800's. However, I did good on my position trade on my longs and if the market decides to go for the 1830's, I'll probably position trade again and hold a net short (VXX) position. I will be selling VXX hopefully at a profit on the pullback to either the Trend Average or the 50 DMA, which I suspect will have many people jumping in.

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 confirmed bullish

The market refused to pullback much today and instead it continued its march towards the 1800's. Seems as if recent worries have all dissipated and I even see "experts" who were calling for a major correction on the news last week capitulating today. But the potential scenarios remain the same and the key to what will happen next will be the pullback to the 1768-1772 support level. I ended up selling VXX today for a negligible profit (16/18) when I saw the triangle on the micro count forming but I will be buying it back hopefully at the next resistance level which is 1808-1813. One thing I did notice is the 5 micro count from the 1792 low has a target of 1804-07 so I guess I might jump in a bit earlier tomorrow just in case (assuming the high is not made in pre-market) as it would be a nice ride if the market reversed to 1770. Last but not least the Trend Average has turned bullish so the IHS might just come to fruition, specially now that some people are noticing the emerging market panic was about nothing. As an example I am posting an article from CNBC (which is one of the main culprits for misinforming the public), where the author wonders why China wasn't falling.

Why China stocks are dodging the global market rout 

He forgot to mention or notice that the SSEC did not react to the PMI announcement at all, which is the main excuse markets started to sell off in the first place. In fact, the SSEC had been rallying and after consolidating for a few sessions it rallied 2% yesterday. So without the emerging markets worry in the background, the index might just be able to turn things around and postpone a bigger correction again.

Short Term Trend = Bullish
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.