Stock Market Update April 30

The SP500 ended up closing right at resistance today and if that breaks we should see an all time high for the SP500. The Dow made an all time high today and I am assuming there will be several more before the market finally takes a break for the summer. Also, I wanted to add to yesterday's post about the NASDAQ since it represents a sector that was previously leading the broader market. Basically, the broader market can easily go higher without technology or financials for that matter. There has been market rotation in the past few weeks and industrials are leading now. And to make my point just look at the multi-year chart for the NASDAQ and the SP500. The NASDAQ made its all time high back 2000 or 14 years ago and it has never been able to come close to testing it, in fact the NASDAQ is 20% below its all time high today. At the same time, the SP500 is 20% higher than its previous significant all time high during the financial crisis. Money rotates from sector to sector, simply as that.

Now with that said, the GDP numbers for Q1 are troubling. The stock market goes up when the economy grows so if GDP doesn't pick up asap, we will see a substantial correction once reality sinks in. For now, there's optimism and no point in fighting it. If anything, one should profit from it.

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.

Stock Market Update

The market has gone up as expected but still needs to break the 1884 resistance level for a break out and a possible challenge to an all time high. There are several bullish patterns in place and trends are green so we'll see if the market confirms as soon as tomorrow. Also, I wanted to talk about the NASDAQ since there is a bearish Head and Shoulder's formation there. The reason I don't put too much emphasis on the NASDAQ is because it is dominated by tech and biotech, which is just a part of the overall market. Just as I don't put as much emphasis on the DJI or Transports which made a post financial crisis high today. I try to get a balanced view and that is why I track the SP500 for general market sentiment.

I sold half the longs I picked up at 1860 to position trade in case there is a deeper micro w2/right shoulder of the smaller ISH. The Feds and the data coming in the next few sessions should be able to move the markets decisively.


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.

Stock Market Update

The market was volatile today with a gap up at the open that was reversed to put in a new low and then reversed again to close over the 50 DMA and the Trend Average. And now that the proper Fib retracement area has been reached, the market needs to mount a rally to break out of resistance to confirm a bullish W3 that will put in an all time. My guess is once the NASDAQ gets it together, the markets will be able to rally in unison. The NASDAQ could turn out to be a drag on the markets on continued weakness but as long as the main trends are bullish and prices above the TA, I am keeping my bullish positions. Also, as I suspected Putin is just taking his time before making his next move so maybe when he finally decides to do something it will cause the summer correction?

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.

50 Day Moving Average

The count I posted yesterday was obviously wrong as we got the sell off I had been hoping a few days ago to test the Trend Average and the 50 Day Moving Average (1858). The are several layers of support under the 50 DMA and they could be tested before seeing a renewed rally. With today's sell off, we now have the right shoulder of the Inverse Head and Shoulders which now projects to 1942 given then where the right neckline is. So if the pattern is correct, we should see a strong rally starting next week to put in an all time high and perhaps a significant top in May before the summer correction.

The excuse for the sell off is Russia and I am thinking Putin will not really do whatever he plans to do until he has a sense of how committed the West really is in intervening in Ukraine. Prior to being President, Putin spent his life in intelligence so I am sure he is very careful with his calculations. Also, considering his background in Judo (I trained in Jiu-Jitsu) and how that philosophy might affect his thinking, he will be probing for weakness to find leverage (Judokas don't win using strength, they win by using leverage). So my guess he will not be starting a brute force type of war (which would cause a major sell off) but rather wait it out and then do his next move based on what he perceives as weak points. Bottom line is, there might be posturing by Russians over the weekend but no real escalation until I sell the longs I bought today at 1860! lol.. I am taking the loss on VXX for miscalculating so I'm at (+30/-7).

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.

Possible Break Out

The market seemed like it was going to break out early morning due to positive earnings news but it tested resistance again before going back down and putting in a low at 1870 and bouncing back. I am counting that as an  B and C followed by a 1-2 set up, which would imply a break out tomorrow out of the recent trading range. We do have the Russian issue escalating in the background and the market in need of a deeper correction but one more push up would make the wave look much better. That and the fact that it will allow me to buy back VXX cheaper!


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 Correction

We finally saw a small pullback today in the market but so far it's looking like a W4 correction, which implies another bullish wave is coming that could take out the all time high before making a significant pullback. The level to watch is the 1873 level, which served as resistance previously. If support doesn't hold then we should see the Trend Average tested. I forgot to mention yesterday that there is a bullish cross (and buy signal) on the daily MACD, which normally means the market is about to start a sustained rally.

I sold VXX today to position trade as I suspect there's another bullish wave coming. If that doesn't happen, I will be going long at the TA and take the loss on the VXX.

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.

Trends are back to bullish

The market managed to break the 1872 resistance level and as expected ended up challenging the 1883 level. At this point the all time high is only less than 1% away so if 1883 breaks decisively we are looking at a new all time high. However, I am still expecting a correction for the right shoulder of the IHS or basically a W2 so we'll see if it will come at all. So far the wave from the bottom has been very impulsive and it could well turn out to be one of those stand alone W3s we've seen a few times before. The best hope for bears given the wave structure is a megaphone top with the entire structure from 1737 topping after one more all time high. Best case for bulls is this is W1 of a 5 wave count which projects to SP 2000 in the next few weeks. A middle of the road projection would be an Rising Wedge that will top in the 1900's.

I am holding a VXX bag at this point so still hoping to get rid of it on a good pullback.

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.