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Thursday, January 14, 2016

Technical Update 01/14/2016 - what's really moving this market

Picking up where we left off

 
We did get a bounce off our Fibonacci target (s) earlier in the week, but those levels have long since broken down. So much for Math
 
 
The $VIX continues to work, and this still looks like a pullback in wave B (on most charts), but there are a couple things to watch. The Transportation index for one.
 
 
$TRAN - in a panic wave "E". This is the cause of market angst, and when commodities rebound this one is coming along for the ride. Add it to your tickers because I'm expecting a violent reversal shortly.
 
 
 
You've probably heard it reported that Oil is moving the market, but Oil and China are NOT moving the market. Oil was up yesterday, and did the market care? No. Another false narrative, being spun by the powers that be... speaking of which an update I saw on CNBC this morning entitled "Ouch!....". More proof that the Networks who are owned by the banks, are the enemy of your trade.
 
All that matters is fear & greed (market sentiment) and money being put to work or not. A buyers strike is one of the scenarios - for Jan., 2016 - I put out there over the holidays - and that's exactly what we're seeing. Eventually money must be put to work, and what better time to squeeze the shorts than heading into earnings season.     
 
Back to the $VIX: Earlier in the week, when I saw the rally fading I said, "we could see a lower market low on a lower $VIX, and that's exactly what we saw yesterday. I'm not pointing this out to toot my own horn, it's just something I'm seen many times before. Same goes for the larger sell-off in Oil, on a lower $UVX. And if it's not fear selling the market off, it's a good old fashioned shakeout.
 
If the $VIX is being manipulated we could even see a false breakout followed by a quick reversal. I don't really see that happening, but if we do... the VIX 26.81 area seems to be the swing point. If the $VIX continues to break out, and the market continues to break down, watch for a sentiment change at the 35 level.  Key $VIX support 20 with no fear below that level. Buy below 26.81. Sell above yesterday's high.  
  

Not all indices are equal

 
We got the NADSDAQ holding up in a range, while the broader market (as measured by the $NYSE) is taking out the August lows.  And the DOW may have traded down 300+ points yesterday, but it's still trading well above the August lows. That points to this NOT being a broad market sell-off.
 
There just isn't much panic associated with the recent selling, and repeated selling into the market close proves the pro shorts (the crooks) are behind it. Conversely when you see rallying into the close you know it's retail shorts covering.
 
Another thing to watch is a break-out of this bearish channel in wave "C" on the 30 minute chart provided in my public charts area [linked] (which should mark the end of this pullback). We're very close to a sharp reversal.
 

 
We're also very close to a reversal in energy, and that's where I want to be when Oil reverses.
Here's a view of a double zigzag pattern - in energy - not offered in my public charts. Again very close.
 
 
When I hear Jim Cramer telling folks to stay away from Schlumberger $SLB, I gotta wonder where his allegiance really lies. Seems to me his job is to keep people in the game while at the same time steering than in the wrong direction.  Take a look at the completed bearish leading diagonal triangle pattern below, and what comes next!  
 
With OPEX just around the corner maybe we see another washout - slightly lower - as soon as today, but timelines are difficult to predict.
 
Thanks for watching and I'll see you on Twitter, AA.
 

 
 
 

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