Thursday, August 1, 2013

Market Update

I have been driving most of the day but I am finally back home (drove 800 miles in the last 24 hours) to go over the crazy waves we just had. First of all, I did not see a break out coming at all based on all those choppy waves, oscillators and the Trend Average. The only one thing that was  technically bullish was the Inverse Head and Shoulders (which target was met today with today's high) but as I said a few posts ago, they typically are straight 5 wave counts and not something as corrective looking as this. In fact, I have to sit down and think about how to label the mess. But to simplify things, I am just going to focus on the micro count that has cleared waves and that is the one with the 1682 low. Assuming there is a 5 count from 82, then we should see this particular wave at 1719. Now, presumably that should be a W3 so if the structure follows a more normal path then an even higher number should be expected. With that said, I have 1711 as a 1.618 level or the ideal end of a W3 of a structure that started from 1560 so we'll see what the market does if it reaches that level.

I ended up adding the other 50% to the short/hedge position at 1707 but I will be taking profits on anything less than a substantial impulse down and will buy back the position on rallies. The market did the exact opposite of what I predicted yesterday but one thing I am sure is that a test of the 50 day ma is very likely once the remainder of the waves are in.

Main S&P 500 Trends*

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.

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