Confirmed Bullish

The market is now confirmed bullish again by gapping up over the bearish trendline and closing comfortably over the TA. Commodities rallied as I was expecting and I see this as a new bullish intermediate leg for all asset classes (with the exception of the US dollar). So while the S&P target of 1403 was not reached due to the correction, chances are it will be reached in June IF the market respects the TA and trades above it. I assume these 5 waves will find a top tomorrow or Thurs and then retrace to the TA and then we should see wave that should take us to a new high for the year. And maybe then we will finally see a Fib retrace for the wave from 1040, an ideal summer correction.

I picked up emerging market plays today, mostly EWH (Hong Kong Index) and added to my FXI (China) position which gapped up a lot today.

Short term trend turning bullish

The market closed over the TA today and it is turning the short term trend bullish. However, we need confirmation in the next couple of sessions. Ideally, the market would break over the upper bearish channel. In the intermediate term picture, I see the market about to start a bullish leg as well so maybe this will be the start of a bullish wave that will last for few weeks. I was tempted to add longs (to my already long position) but I think I rather see the channel break before making the jump. Aside from US equities, gold, oil, silver, and emerging markets are all confirmed bullish and I will start positions next week in EEM, USO, FXI and some SLV. I have my gold positions from few months ago and I will probably cash in when the intermediate bullish wave is done.

I also have been working my my site and I will be launching it soon hopefully, the address is http://trendingwaves.com.. have a great weekend!

TA Tested and now..

The market tested the TA as I was expecting yesterday and now we shall see if this is a C wave, which implies a sell off in the next couple of sessions or a W3 that will break through the TA and turn the trend back to bullish. In looking at commodities and emerging markets, odds favor the start of another rally and if that happens the S&P will rally along with it. I am ready to add to longs should a break out occur.

TA to be tested?

The selling that occurred after hours failed to show in the cash index. The market bounced off support and rallied from then on. I think we are going to see the TA (currently at 1329) tested again on this counter rally. If the bulls are able to make the market close above the TA then there will be a chance to turn things around. But as of now, the trend is bearish and any rally should be considered a counter rally until proven otherwise. With that said, it looks to me like commodities are going to go bullish again and if that happens we will see a resumption of the bull market.

More Selling to Come

The market couldn't counter rally much as expected in a W4 situation and now it seems like we will see the start of the bearish 5th wave as soon as tomorrow. In fact, we might gap down from looking at the set up. The support level might actually be a good place to go long with the test of the TA as a target. But we have to see how the market opens tomorrow, my guess is that it will probably test 1301. On the other hand, commodities are starting to recover so the market will soon have an excuse to start another rally.

Bearish Reversal

The short term bullish scenario is now out after the sell off today. What we saw last week was just a test of the TA and the market had no intentions of staying above it, so for now the correction continues. The 1317-1319 level broke and there is some support at 1312 but ultimately 1301 might be tested before this particular bearish wave is done. Then intermediate term has turned bearish too so we might see the entire wave from 1040 might finally retrace to a a Fib area, this wave never did the retrace and every single correction has proved to be minor ones. So if this is the corrective wave then the 1165-1244 (worth noting the 200 SMA is at 1239 so it would be a good test) area will be visited and in the process invalidating the intermediate Inverse H&S I posted last week. But for now, the market is again oversold and should be getting a bounce as soon as tomorrow or Wed again. If the bounce stalls at the TA again, expect 1200's..

Another Inverse Head and Shoulders Pattern

The market rolled over and started the bearish wave I predicted yesterday and now it remains to be seen if the bullish formation wave will resume on Monday. Today's market action created another inverse head and shoulders targeting 1377. The close under the TA is obviously negative but the bullish channels are still in place as the selling today held at support levels. And unless these key support are taken out then we will have seen a bottom in the near term future. Furthermore, it looks like the correction in commodities is nearly over and that favors more upside for equities so we'll just have to see what next week has in store for us.

Have a great weekend!