W5 truncation or end of correction?

The market challenged the all time high today but fell short by a point and went straight for the Trend Average test. The 5th wave on the chart looks truncated but at the same time I can see a Zig Zag correction so I will pay close attention to how the market holds here at the TA. Failure to close under the TA just means the high will be taken out in the next few days, closes under the TA will reverse the  short term trend but until that happens I will trade following the TA which are still green. One possible bearish scenario I am keeping in mind is a sell off that will test 1834 and then bounce for a H&S formation, so a sell off to that level should create a good counter trend trade opportunity.

I was very tempted to buy VXX today but I decided to wait. Instead I bought a small long position in a pharmaceutical company, which very rare for me but I figured it's a low risk trade at these levels.

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 ended up making a slightly lower low today in what seems like a Double Zig Zag due to concerns on Chinese exports. But the general bias remains the same and I expect a new all time high as soon as tomorrow if the micro count I have on the chart is correct, which basically targets 1890s. The market has had plenty of excuses already to  close the gap from March 4th but it looks like it has just been buying time. However, once this coming bullish wave is in then I will expect the market to test the TA at the very least.

I bought some more Chinese shares today and I hope they remain weak for at least a month or two (so I can add more). The main reason for the market drop today was the export numbers from China (which implies weak foreign demand and in turn a global slowdown) but something a lot of people don't realize is that those numbers are completely distorted due to their New Year. So the true export numbers don't really come out until next month and the concern is all speculative. I also plan to buy VXX on the coming rally and I might buy twice my usual position.

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.

Room for more upside

The made a top today but it seems like a very short term top so the market could stage a rally as soon as Monday. Technically there is a chance the market will start a bigger correction but I think it's less probable given the fact the market has been just buying time to consolidate a base to rally from for the last few days. So unless there are some really bad news over the weekend, the bias is to the upside. There is a potential bullish 1-2 on the micro count that targets 1890's and if we get these 5 waves then it will be very likely that we will see meaningful market top and a market correction to at least the Trend Average. Obviously, the market can keep doing W4 like corrections but at least they do give you the opportunity to make some money when patterns are completed.

Given how resistance held today and how this looks like another W4, I ended up selling my VXX position at a profit (20/23) and will hopefully buy them back early next week at a much lower price. 

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.

Potential Market Top

The market rallied and made a higher high today as I had been expecting so technically there are enough waves to call a market top (short term top most likely).  However, I also see the potential of another impulse to new highs by switching the micro W4 label around so the market might be able to reach the 1900 level. Fundamentally speaking, I think it's crazy to be buying at this point while the US is sending a destroyer to the Black Sea. Not that there will be a war anytime soon, the problem is there are plenty of excuses for the market to sell off. In fact, a single gunshot from the Russians or the Ukranians would do the bear job. My political guess is the Crimea will go ahead and hold a referendum where they will vote for secession from the Ukraine, that vote is on March 16th so the market could continue to rally up until that time. Once the results are in, the Crimeans and Russians will argue that Crimea's referendum is more legitimate than the government of Ukraine (not elected by popular vote) and that's where thing could get ugly. Putin's academic background is International Law so he probably had this in mind before he "accepted the invitation" to Crimea, he knows he can then use the military force and gather international support since he'd be acting to "defend democracy". If you think about it, he actually would have a point since the region elected the President that was removed without elections and they do not recognize the current government.

Anyway, I bought back VXX near the market top today and almost sold it for a profit but I decided to hold. If the market gets to 1900 I will be adding more.

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.

Higher High Coming

The market managed to put it a marginally higher high early morning before going into what looks like a sideways correction/W4. So chances are the market is forming another base before putting in another bullish leg to another high before any other significant correction. In fact, I won't be surprised if the market is able to spike to 1900 since there seems nothing can stop the market at the moment.

I ended up selling VXX 19/22 for a profit and will be buying back on the next bullish leg. I'm having an unusually high winning trade rate this year doing mostly counter trend trades and I think the key has keeping my greedy side in check. Hope I can keep it going..

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.

Another All Time High

Another day, another all time high.. I was completely wrong in assuming the market would find it hard to continue its bullish advance with the current situation in Ukraine. The market simply doesn't care too much at this point and any negative news are just being used for these quick corrections that get bought. The wave structure from 1737 is basically a bullish mess, there is no W2 to speak of but we've gotten 4 quick corrections that look like W4's, so it's just one W4 after another.. a real bear killer. But at least we have the Trend Average to guide us through the madness as it has been bullish for almost a month now.

With that said, I see micro 5 waves from yesterday's low so we will get another short term correction as soon as tomorrow. Whether it is another W4 or a W2 remains to be seen but I'm assuming the market will run out of steam at some point. And given the micro 5 count, I decided to buy back VXX to hedge my ST longs for a quick profitable trade (hopefully).

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 sold off today on news over Ukraine but the bounce of the low was somewhat strong so I won't be surprised if the market tries to challenge the closing all time high again (1858). The situation in Ukraine will only get more interesting as Putin will not be backing off and I am sure he made his Geo-political calculations long ago on how the world would react. This whole Ukrainian crisis originates from NATO's invitation to Ukraine to join the treaty, which essentially puts pro-western military bases right on Russia's backyard and ancestral homeland. In countries where bloodline matters more than borderlines, it's easy to see why the Russians are doing what they are doing and I won't be all that surprised if Putin decides to go for other Russian regions of the Ukraine if pressured too much. And given this Geo-political  environment, the market might find it challenging to continue its bull run. The market closed right on the Trend Average today so all signals remain bullish but I for one will be waiting until I see further clarity. An ETF that is already very attractive is RSX (Russian ETF) and if that plunges even more for whatever reason, I will be buying lots of it as it is ridiculously cheap.. Whether Ukraine splits or not, in the end they will find a solution.

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.