Friday, April 25, 2014

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.

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