Market Update

I had a busy day today and will keep this update short. Basically, the market is again testing the 1874-83 resistance level and my guess is that it will break sooner than later. The market is challenging the ST bearish trend and if the market continues going up in the next session it will probably turn Bullish.. so watch those shorts.

Short Term Trend = Bearish 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 decided to break the triangle to the upside and the 50 day ma remains untested (in the cash market) despite several bearish attempts in the last few weeks. In fact, despite a bearish Daily MACD crossover which is one of my preferred tools in anticipating important trend changes, the market closed around the same level as it did when the signal first occurred. And if I remember correctly, this is the first bearish Daily MACD crossover that has failed to test the 50 DMA in a long time. So what this tells me is the market is forming a base to rally past 1900 sooner rather than later if support continues to hold.

The latest waves have been somewhat hard to label but what looks clear to me is that we've seen an ABC move since the all time high. The length of the wave I've labeled C is exactly the same as the A wave. Today's gap up had the look for a bullish micro W3 but it faded into W1 territory, so this implies we will see another ABC move or today's top was W1. Either way, the bulls are showing their resiliency.

I didn't trade today as I don't want to take unnecessary risks given the bearish TA and support levels holding. My China positions have done very well this past week and hopefully I will add more China and possibly Russia in the next couple of weeks. I heard Putin called Obama today (which is rare, usually it's the other around) so perhaps this will give reasons to global markets to rally with joy early next week.

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.

Potential 50 Day Moving Average Test

The market put in a lower low today at 1842 and went into a triangle the remainder of the day.  One could argue for a bounce from here since we have what looks like an expanded flat in the cash market. However, the index is so close to the 50 DMA and today's triangle gives the market enough of a correction to put in another bearish leg to at least 1834 or basically the low that was put in couple of weeks in pre-market.

I am staying in cash and will go long if we get the 50 DMA test as there is a good chance the market could rally hard from there (to the TA). If the prices break out of the triangle to the upside then the 50 DMA target will be invalidated for the time being.

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 Update

The market got up to the level I was speculating on for the past few days (1874) but then reserved again to test the neckline of the potential Head and Shoulders. I continue to hold the view of a sideways correction and a drop to the 50 day moving average would put in a C wave at the intermediate level, with A being the leg that tested the 50 DMA in premarket couple of weeks ago. The reasons for the sell off today was not very clear, I've read  the reason were concerns about Ukraine, a huge bearish options bet in the last hour and the manufacturing report. Basically, nobody really knows.

I attempted an XIV long around 1856 but was stopped out at the break of 1854 so another losing trade (23/29) but at least the loss was minimal. I get the feeling the market is about to break out of range and I will take positions then to be on the safer side.

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 Update

The market gapped up at the open as I had been expecting/hoping but fell a little short of the micro 5 wave count target (1874) by putting in a high of 1872 before reversing and making a higher low at 1856. Going by the same calculations I've been using to project wave prices, if 1872 is W1 of a bullish count then we're looking at 1905 more or less as a target. However, I can also see a Head and Shoulders targeting 1816 and if the wave from 1872 to 1856 is a bearish W1 then I have the 50 Day Moving Average as target, which today is at 1832. As I said yesterday, this whole thing is looking like a sideways correction as there has been lack of bearish advances despite the many reasons for a more pronounced correction. But we'll have to see how the market reacts to the trendlines I drew on the chart, higher lows and continued all time high challenges will result in a strong rally eventually.

The market did as I expected yesterday but I lost on my pharma trade (23/28). The stock started the day well ahead but then it plunged below support for seemingly no reason. So I got stopped out at a loss and now I am reminded of why I should not trade individual stocks.. specially smaller ones. I am going to stick to volatility and my ETFs. I will just wait until I see a set up to take a new position.

Short Term Trend = Bearish 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 continued to sell off today and invalidated the possibility of a nested bullish 1-2 set up. However, support at 1850 held quite well and given the micro count on the bounce it looks like it wants to go for 1874-83 again. If we get this bullish way to resistance then we might see an Ascending Triangle that will target 1927. Obviously, it is too early to tell but I will be trading it as such until key levels break. So far the market has been correcting sideways since the bearish daily crossover on the MACD so this could be the base for another substantial rally to come.

I bought the pharma stock at near support today so I am all long. The close was under the TA and the ST trend continues to be bearish so it is risky but as long as support holds I am looking for further upside.

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.

All Time High

The market decided to continue rallying early morning and a new all time high was put in the SP500 before reversing and testing the Trend Average. This move invalidates the H&S I had been following so I am now looking at the completion of the IHS to 1909 or the start is a C wave that will test 1834-39. I can see the micro 5 wave counts on several waves but it's hard to label these higher degree waves until we get more clarity. The TA continues to decline so there trend has not changed yet but a higher high means the bullish side is taking back control, even if the high was marginal. In addition the bearish pattern was invalidated and the bullish one remains in play so there is a higher probability the market wants to go higher until a lower low is made.

I stopped out of my VXX position (23/27) unfortunately, I was having a pretty good run. But I am waiting for another trade set up before going back in long or short on my ST account.

Have a great weekend!

Short Term Trend = Bearish 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.