Market Update

The market came close to its previous top but fell short by just a fraction of putting a higher high. Also, I see on the micro count a potential top and a possible 5 count targeting 1826 so we'll see if that happens early next week. So far that rounded trendline I drew on the chart is acting as resistance on the market so any failure to break out of that would be considered a multi-week top. But again, the main factor I look at when I trade are trends so as long as those are bullish I am assuming the market will correct only to break out and put in another high. I am holding on to my VXX in hopes to sell them in the 1820's so hopefully that will work as planned and I will be awake to sell them.. lol

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.

Bounce or Rally?

The market continued its sell off overnight but by the time the market opened it had recovered almost 10 points from its pre-market low and then continued to rally towards the end of the day. The move on the cash market looks like an ABC that bottomed exactly at the micro Head and Shoulder's target of 1824 and the Trend Average was tested in pre-market but not in the cash market. So the options I am looking at are either a complex correction with another wave of selling to test the rising 50 DMA or another bullish leg that will break the all time high. I am still not all that convinced with the last two minor corrections being enough for a base for the market to mount a sustainable rally and ideally we would get a deeper correction before a stronger bullish wave. But obviously I will not be fighting the trend, specially now that it's all green.

Now my trading.. I was hoping to lock in profits at any opening below yesterday's close and with the way futures down a decent amount it looked like a done deal. But futures started to reverse early morning and unfortunately I was asleep when the market hit the H&S target. So now I am stuck with VXX and hoping we will get a complex correction. If the market makes an all time high then I will stop out at a loss.. TD Ameritrade stopped providing trigger alerts and I wish there was some sort of service that would actually give me a call to wake me up! if anybody knows of anything like this please let me know, I am sure I'm not the only one in the west coast that could use this service.

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.

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.