50 day ma

The market gapped down and broke the 50 day ma briefly before recapturing it at EOD. I think this is the level to watch as a breach of this level will likely bring lower lows. And now that we officially have a government shut down, the excuse for bears to take control is in front of them. So we'll just have to wait a few more days and see how all of this plays out. Looking at the waves, I extended the labels and made the entire structure a 5 but this is a very choppy structure. So the market might just be preparing a base for a new rally once all the political stuff goes away.

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. 

Short Trend is confirmed bearish

The market gapped down a bit today but didn't do much the rest of the day but this bearish move managed to turn the short term trend bearish, so time to be careful with longs. At the same time, there seems to be a falling wedge like pattern favoring the bullish side. Despite the market being down for 6 of the last 7 days, it's been only a 2% bearish advance so far. But I guess it will all come down to how the house will vote on the health care bill, Obama believes Republicans are bluffing.. we'll find out soon.

I btw did not sell my Google longs, I want to see how the market reacts to the 50 dma first. 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. 

Market is in waiting mode

The market attempted a counter rally today but got stopped right at the Trend Average. So still waiting to see if the structure is really done with its 5th wave and just starting a bounce or planning to test the 1680-65 level. The market has corrected enough to launch a rally and if there's some sort of resolution to the whole debate in Washington over the budget, the market will be headed to another new high for the year. I guess it all comes down to how the Republicans will vote, considering there will be Congressional elections, my guess is that they will not want to take the blame for a government shut down and damage to the economy. We'll find out soon.

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. 

5th Down Day

We got the 5th straight down day today, a "record" bearish streak for the year. Looking at the waves, it looks like the market was done with just its micro W3 yesterday and today the market worked on its final 5th wave. There is however a potential Head and Shoulder (the IHS is obviously invalidated) that targets 1680 so we'll see if that is what the market wants to do. Also, we now have 2 consecutive closes under the Trend Average but the number is still going up so it might start turning down if we get something more decisive. The excuse for the "sell off" is debt ceiling issue, which includes Senator Ted Cruz (whom I am sure we will be hearing from for many years to come) speaking for 21 hours straight in the US Senate about de-funding Obamacare. What I want to know is if anyone was crazy enough to sit through the 21 hours to keep him company. The good thing is many people who need insurance will finally get it, the bad thing is we are probably headed towards much higher inflation in the not too distant future. Which in itself is not that bad if you have fixed interest debt but the very group of people that Obamacare will help, might end up suffering as well.

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. 

Market Update

The market tested 1695 early today and bounced from there before reversing again in what seems like a micro W2 or a B wave. Also, there is an Inverse Head and Shoulders set up that targets 1716 so we could see the market in rally tomorrow if pattern succeeds. Today's down day is the 4th in a row, which ties the most down days for the year set in August. The SP500 has not had 5 consecutive down days since December 2012 when the market was in the low 1400's, so odds favor a bounce.

I bought back Google per my plan yesterday and hopefully it will make it to $900 again on this leg? Lastly, someone asked me on the forum on China ETFs and this article lists a few good ones to consider:

China ETFs

I will probably diversify towards consumer and tech on my China holdings and reduce my exposure to financials in the next few months.

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. 

4th Wave?

The micro 4th wave I was tracking did not come to fruition and instead I now a completed W3>W1>W3 of LT Int W5 finished at 1730 and I am assuming we are seeing the first leg of a W4>W1>W3>LT Int W5. This is the first time I use the ">" symbol to mean "of" and obviously this is my own creation to better pin point a wave withing a series of waves. Tomorrow we could see 1695 tested for the final bearish micro 5th but if that breaks then the next layer of support is in the mid 1680's. There is a good chance the market will test the 50 day ma at some point during this correction so we'll see how this count evolves. With Syria and taper fears out of the way, the next excuse is the debt ceiling debate which if resolve would be the perfect excuse for yet another rally to another new high for the year. A deal must be reached by mid October, so exactly 3 weeks from now. And I won't be surprised if we get a repeat of what happened in December, where a deal was reached the very last minute. Republicans want to give Obama a hard time on healthcare, my guess is Obama won't budge. I just hope they don't mess with my mortgage interest deductions!

I will be going long tomorrow if I see support tested, just not sure what to buy just yet.

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 finally had a somewhat substantial pullback today after rallying for almost 2 weeks with very minor corrections. There are many ways to interpret this pullback but I am going with a W4 unless 1704.95 gets breached. The reason I am not labeling this the top of W3 just yet is because of the micro count that starts from 1681. A normal 5 wave impulse calls for 1740 from 1681 so we'll see early next week if this comes through. I ended selling my VXX position at a minor loss since it was hovering around my buy price despite the market being down for 2 days in a row. But the plan is to buy it back even cheaper if that new high comes to fruition. Trading VXX is like playing with fire, so I am extra careful with this one as this as speculative as it gets. And btw I wouldn't recommend UVXY or TVIX (leveraged VXX) to anybody, they are so risky and the decay so substantial they should be illegal.


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. 

Market Update

The market made a marginally new high early today and retreated in what seems like a micro W4. So my assumption is there will be more upside after this micro W4 is done. The market is overbought and could use a good correction in price or time to find a base to rally from as the main issues that were holding the markets (Syria and Taper) are now off the table. In the longer term, it looks like the market will go for 1790 if the waves evolve into an Ending Diagonal or Rising Wedge which are common in 5th waves or 1900-1950 if the market rises in a regular 5 wave count. Crazy how much the market has advanced in less than a year.

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. 

All time highs and more to come

The market made an all time high as I had been expecting but failed to reverse since the news were just "too good" for the market to correct. Looking at the count I see an extended 5th of W3, so maybe we'll get a micro W4 and then another high before working out some of the euphoria. In the meantime, the Trend Averages and the 50 day ma continue to rise and perhaps the market will go for the test of the TA or the 50 dma when they are closer to 1700 which has now turned support. The NYMO is off the charts (hasn't been this high in over a year) and in the past it has signaled a correction and then a bull run and in other cases just a continued run. So now that pieces are falling into place, the bullish W3 scenario is very likely and a test of the key trends will be a good time to get in and enjoy the ride. Obviously only if the market continues with the bullish trends.

I ended selling VXX for couple of months worth of Starbucks and bought it right back after the announcement was made. I will sell it again when we get that trend test or on a good profitable spike.
My long term account looks pretty good so I hope this bull run continues, Rapa Nui I am coming.

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. 

Reversal day tomorrow?

The market has technically put in the final micro 5th wave in and there is a good chance we see a reversal day tomorrow. Looking at the count it seems like it is only the W3 wave ending so we should see a W4 correction. However, I've seen in the past how nested counts merge towards the end of the wave into one so there is also a chance all 5 Waves are in. The NASDAQ made a 13 year high and the SP500 is just a few points away so we'll see. If we hadd the length of W1 to W4 within the W3 structure, we get 1708 as a target so right at resistance.

I bought back VXX today in expectations of a reversal. The excuse to take profits is there (Taper) and I think it is reasonable to expect a test of the 50 dma on the 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. 

Cup and Handle Formation

Last week I speculated on a bullish Monday and that's what we got today. Technically, a 5th wave of what appears to be a W3. However, it's not fully clear if there is another W4 correction before another final W5 since this W3 is part of a nested set up. Also, one thing to keep in mind is that the ES S&P500 made an all time high on Sunday night and I don't remember the last time the cash market failed to match a higher high or lower low made in the pre-market. So my expectation is an all time high sooner rather than later. Lastly, there is a potential cup and handle set up targeting 1770 so we'll see if the market follows the trendlines drawn on the second chart. With today's price action the intermediate trend turns bullish again, so all signals are bullish and perhaps we'll get a correction to the TA or the 50 dma and see the market take off from there?

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. 

Bullish Monday?

The market seems like it is finished or about to finish its W4 consolidation, setting itself for a bullish W5 early next week that should target the all time highs at 1709. But first the resistance at the 1697-1700 level will have to be dealt with so we'll find out soon if the market has enough momentum to push through these levels. I find it interesting that markets are basically at an all time high just 5 years after Lehman Brothers collapsed (5 year anniversary is Sept 15), very few people were able to predict the financial and market collapse in 2008 and not many expected the markets to rebound the way the did in just a few years. In a way it almost feels like it was just an average event in history when in fact it was probably a once in a few decades event. I guess a good question to ask ourselves now days is are we better off today than 5 years ago?

Anyway, I will attempt another shot at VXX if we get that bullish W5 early next week. What comes after the top is really anyone's guess but I personally lean towards s continuation of the bull market as long as ALL trends get back to green, which implies any correction that we get will find a bottom near the Trend Average/50 day ma.

Have a Great Weekend!

Main S&P 500 Trends*

Short Term Trend = Bullish

Medium Term Trend = Bearish trend being challenged

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.

Consolidation

The high for the W3 is in and the bearish action today looks like a normal consolidation before another push up. However, this W4 has been very shallow so far so I wouldn't be surprised if we are going to have a similar scenario to earlier this year where we had a series of W4's before finally topping at 1687. As I've been saying for the past few days, as long as the bearish catalysts are seemingly under control (Syria and Fed tapering), the path of least resistance is up as not only the US economy but the world economy seems to be gaining traction. Ideally, the world would enter into a period similar to 2005-07 where the world economy was running on all cylinders. I remember there was an issue from The Economist about what could possibly go wrong at that time given how seemingly great the economy was.. Then came 2008 and we all know what happened. So if we do indeed enter into this "good" period again it will line up well with the long term count and perhaps we won't see another recession until 2015-16? just in time for a Fib retrace of the entire wave from the 2009 SP500 666 low. Best imo is to be fully invested in the markets while the long term trend is up.

I ended up selling the VXX position for coffee money, for 2-3 cups of coffee literally. I was hoping for a 10-15 drop but the market had a hard time doing even that. So no point in fighting the short term trend until the 5th wave appears targeting the all time high.

Main S&P 500 Trends*

Short Term Trend = Bullish

Medium Term Trend = Bearish trend being challenged

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 has now gone up for 7 sessions in a row from its 1628 low and it is within striking distance of its all time high. Looking at the waves, it seems like the nested W3 has topped or getting close to it. If we apply a Fib 2X W1 of the nested count, we get 1692 as an ideal top. Also, there is a layer of resistance in the 1697-1700 area so I assume we will see a W4 pullback in the next session or two. If the market somehow manages to cut thru this resistance level then my assumption is 1709 will be challenged without a retrace. I ended up buying some VXX as a hedge at $14.53 and I will be selling them on the pullback, which I assume will end up around the 50 day ma and 1676.

The market doesn't have as much fear now that Obama has retreated somewhat from its earlier aggressive stand (I think he is needs to understand that people are sick and tired of unnecessary wars, specially when national security is NOT as stake). So if the expected Fed tapering is lighter than expected, then the conditions will be in for the continuation of LT Int W5 to 1800. There is still the possibility of a B in a flat (that calls for a C to test the 1628 low) but chances are looking dimmer and dimmer for each point the market rises.

Main S&P 500 Trends*

Short Term Trend = Bullish

Medium Term Trend = Bearish trend being challenged

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 highs to be challenged?

The market continued its bull run today and it managed to put in another very bullish close. I thought the market had a good chance of putting in a right neckline for a potential Inverse Head and Shoulders around the 1669 level but the market just ran over that resistance level. So I have the market in a bullish W3 and depending on where it tops and where the W4 bottom is, there is a reasonable chance 1709 will be taken out. That's obviously assuming the 5 count continues uninterrupted. Technically, the 5 count that started at 1628 has already met its price target but since it morphed into a nested 1-2, it is free to extend. I think the speech tonight by Obama will move the markets, so we'll see how traders deal with it. Not too many people are for unilateral action so maybe common sense will set in for Obama. Why make more enemies when we already have enough??

I am enjoying my longs and it's very tempting to take profits but I will leave them as is until I am retired!

Main S&P 500 Trends*

Short Term Trend = Bullish

Medium Term Trend = Bearish trend being challenged

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.

Short term trend has turned bullish

The market was able to overcome the 50 day ma and ended up closing strong. Also, there daily MACD has a confirmed bullish cross and with this we now have higher probabilities a sustainable rally might be in the works. The concern of Fed tapering QE3 has been somewhat relieved with the expectation of a "light" tapering instead of an abrupt pull out. Also, the issue with Syria might be at a turning point now that Russia has proposed a reasonable plan. If the Syrian government accepts the Russian proposal of handling over control of its chemical weapons to the UN or some sort of international body, chances are the markets will fly past its all time high. Putin will end up looking like a man of peace and Obama like a warmonger. I guess they gave Obama the Nobel Peace prize (who in the world thought of that one is beyond me) a few years too early..lol. With that said, this could still be a B that is topping but I for one won't be shorting anytime soon.

Main S&P 500 Trends*

Short Term Trend = Bullish

Medium Term Trend = Bearish trend being challenged

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

It was a volatile day today with the market dropping over 1% early morning before recovering all loses to finally test the 50 day moving average at 1665 before reversing again. And while I had been expecting a 50 day ma test and a reversal for a few days, what comes next is not as clear. The market could be putting in a bullish nested 1-2 which would imply a break of the 50 day ma resistance and a change of trend to the positive side early next week. At the same time we have to keep in mind the potential of the bounce from 1628 being a B wave plus the congressional vote on striking Syria on Tuesday, so it's all open to interpretation. The long term trend is positive so at least there is no guessing there.

I ended buying back VXX at the test of the 50 dma and sold it on the reversal for a few months worth of coffee money, so I am out again and waiting for the next short term trading opportunity. My long term investments are looking better now days so that's good, just hope Obama doesn't go too crazy launching missile strikes and makes this a quick adventure so as to not ruin the markets. I get the feeling that a strike on Syria goes beyond just punishing the regime for allegedly using chemical weapons, there are other motives that are unclear and we're just being told a story that can be sold to the public.

Have a great weekend!

Main S&P 500 Trends*

Short Term Trend = Bearish trend being challenged

Medium Term Trend = Bearish

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 made another higher high today and it seems like it was to test the 50 day ma before another significant correction. The real question to me is whether the entire correction from 1709 is over or not, looking at the chart on the daily it looks like the market is ready for a bull run but as far as wave structure the ideal would be one more significant leg down. I guess we'll just have to wait to see how the market reacts after the actions we take on Syria and tomorrow's jobs numbers. A strong jobs number will add selling pressure in the short term but in the whole context of the economy it means the conditions will be there for a longer bull market. With the rest of the world doing better and better we might just have a period like 2005-07 when markets around the world were booming. And btw I don't think a strike on Syria will do much to oil prices, in the market sense, this is just an excuse to correct.

Main S&P 500 Trends*

Short Term Trend = Bearish trend being challenged

Medium Term Trend = Bearish

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.

Close above TA

Markets managed to stage another strong bounce and now we have a higher lows and higher highs but most importantly a solid close above the Trend Average. One could also argue for a double bottom formation but only if the current wave is a bullish W3, if that is what the market has in mind then a complete 5 wave count would target 1687. If the 5 count fails then I would expect a trading range between 1626 and 1661, so we need to see one or two more sessions before getting a better picture of how September might trade. The market has already corrected more than enough in time since the 1709 high and oscillators have been reset to the point where we could see a big rally. But as long as the Syria issue remains in the background, I would assume that would keep a lid on the market? economic news around the world are on the positive side so in the longer term I am expecting higher highs.

I am still in cash and waiting for the right moment.. like a ball player waiting for the right pitch.

Main S&P 500 Trends*

Short Term Trend = Bearish trend being challenged

Medium Term Trend = Bearish

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 ma test?

The market opened up bullish today and managed to test the Trend Average before giving up a good portion of its gains. This whole Syria thing makes the markets (US markets particularly) nervous and the next significant move seems to be tied to what the US decides to do militarily. So in the meantime we might see the market stuck in a range between 1626 and the 50 day ma (currently 1661) until traders make up their minds. The current wave from the low could technically be labeled as a B to be followed by more downside on a C but as I said last week, I don't believe waves are able to predict actual events, just investor sentiment. So I will be waiting out for support/resistance levels to enter a trade to be on the safer side and avoid being a bag holder on these wild intraday moves. Personally, I prefer they give military support and weapons to Syrian rebels (if the allegations are proven without a doubt) as opposed to a direct strike as the only thing we might get is another civil war with yet another Islamist party calling for the destruction of America and millions of dollars (which we the tax payers have to pay) completed wasted.

Main S&P 500 Trends*

Short Term Trend = Bearish

Medium Term Trend = Bearish

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.