Short Term Trend Confirmed Bearish

I was wrong in my assumption the market wanted to rally today as instead we got a clear bearish wave that is either an C or a W3. The low today is close enough to the 1834 level I mentioned a few days ago to call it a neckline for an Head and Shoulders that targets 1793. Obviously, if this is an ABC count then the market will rally from here on but if this is the potential H&S then the market should test the TA and then sell off in 5 waves to that level. Alternatively, the market could still put in a bit more downside before a bounce and those levels are between the 50 Day Moving Average at 1828 to 1834 support. The reasons for the sell off has been uncertainty with Ukraine and China and with the Crimea referendum taking place this weekend, the political situation has the potential to escalate substantially on Monday. China on the other hand is really not a big deal, if things were so bad the Chinese market would not be at the same level it was before all the "bad" news came out. My retirement depends on that market so I know that economy well.

Since I was wrong, I went ahead and went long with the pharma stock I sold yesterday at support. So hopefully we'll get a good bounce so I can sell that stock and buy back VXX as close to the Trend Average as possible.

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.

New highs still possible

The answer to my question was answered today as the market sold off and made a new significant lower low. However, despite the correction, the gap from March 4th remains and the market rallied enough to close around the Trend Average. So I lean towards a stronger bounce here given the fact that all the bearish waves have made little downside progress in almost a week of selling and despite all the seemingly bad news. I will move to the bearish side once the trend changes, until then I see a potential micro 5 wave count to 1889 more or less so new highs are still possible if not probable.

I sold my pharma long from yesterday for a good profit and made some lunch money with VXX by day trading it (22/25). But given the fact the TA is being challenged, I am on the sidelines waiting for clearer set up. If we get that higher high, I will be loading up on VXX. If I am wrong on the high, then I will be go long on the pharma stock if I get it back at a good price.


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.

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.