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Tuesday, July 25, 2017

Market Update 7/25/2017

 Volatility remains low, too low in my estimation, and for or that reason alone, I can't recommend a long trade. 

Secondly, the SPX completed a 5 wave move, so you have to anticipate a pullback...

 Note: the 1000 min (200 (5 min) average is being bought, possibly by high frequency trading programs. 

$SPX continues to trade sideways in a tight range, after being stair stepped (unnaturally) higher. 

Another reason I don't like the broader market here, is the possibility that a possible wave "D" overshot the target. And keep in mind wave E is typically a panic wave.

 The NASDAQ (led by tech) made a slightly higher high. I predicted this on Friday, but I wouldn't be chasing tech up here.

The fact that the $VXN (the $VIX for the NASDAQ) continues to trend up, scares me.

$RUT - Last weeks short lived new recent low on the $RVX, followed by it's violent reversal to the upside also  scares me.

The fact that the $VIX is trading at levels not seen since '07 (9.39), ahead of the latest market crash, scares me.

The $VIX has consolidated into a bullish down-turned wedge over the past 2 years. I suspect it's being manipulated, but I'll trust the pattern. Some say the $VIX is no longer a relevant indicator... That's unproven theory, and that kind of talk is usually indicative of a major market top.


Wednesday, July 19, 2017

A Quick Market Update 7/19/2017

Got our pullback yesterday, but I'm not sure it's complete, because it looked like a 5 wave move (an impulse wave). Hard to say which sector gets hit the hardest, but REITs led this rally, and the probably need to pullback.

SPX - consolidating. I like the 2444 target, but could fall as low as 2436 - 2438, ahead of OPEX.

Until the 2450 level breaks the up trend is intact, so I'd be careful selling this rally.

The trend on Oil and Gold isn't clear, so we're going to put those 2 sectors up on a shelf.

$RUT made a new intra-day high, before giving it all back. That's what I'd call a "failed breakout", or false breakout.

I have several confusing short term charts on the $RUT, but the longer term chart is clear. Major topping pattern. Even if it throws over the top of this pattern, be prepared to sell it!

Same goes for this target on the $SPX, if it even happens.

Short term looking for a higher high, going into OPEX, followed by a give back of all the gains since June. 2390 wave "e", 4, Target


Monday, July 17, 2017

Market Update 7/17/2017

Today's update is an easy one. Retail shorts being squeezed into July OPEX as expected.

$SPX support 2454. Resistance 2468.

Our larger wave "D" target - will probably hold up in a range going into OPEX Friday, and could even retest the highs again in early August, before giving it all back.  It ran too far, too fast to be a complete wave D.

 The $NDX also seems to be trading into a broadening triangle, but it also ran too far too fast. Movements within a triangle, should look like a zigzag pattern, not a straight line, I'm expecting a pullback, at least.

The $RUT - also whipsawing in an apparent broadening triangle, which if indicative of emotional markets, and capitulation tops.

I'm bearish in the near term, based on the $VIX trading in the bottom of the range, but as long as it remains trapped in this range between 9.50 - 17.50, the selling is going to remain orderly.

The NASDAQ 100 $VIX (VXN) remains elevated, and the trend intact. This scares me, and I wouldn't own tech for all the tea in China.

I think Oil and energy could see a bigger pullback going into OPEX, because this has been the trend... and the chart looks like it just completed a wave 5.

Thursday, July 13, 2017

Market Update 7/13/2017

Seeing the market rigged higher ahead of July OPEX, just as it was dumped ahead of June OPEX. This is exactly what I predicted... and now you see it playing out in real time.

$SPX 1 min chart: Short term support at 2438 & 2432. Resistance 2446 (and a breakout above 2447 as soon as tomorrow). As you can see on the chart below, the SPX was driven above support after seeing a little bear trap - helped by more fake news about the Trump campaign colluding with Russia.... Never trust the financial networks; It's very easy for a few unscrupulous fund managers to move the market where ever they want on light summer volume, and use the fake news to promote their false narratives.

$IYR  REITS  This is one of the sectors they're using to drive this short squeeze. Of course they had to wait until Yellen's testimony, and shorts are covering on that...

This rally is also being led by tech; after the networks reported - a couple weeks ago - that tech is out of favor with Money Managers ....blatant lie. Investors never give up on the first leg down; they always "buy the dip"; even in wave 1 in a bear market they buy the dip.    

 I think we can expect to see the market continue to hold up going into the beginning of earnings season, and OPEX next week, but is that worth trading? I don't know, and several charts don't look good, and although the short term SPX chart is working, it doesn't show the bigger picture.

The DOW - although it made a new high it looks like it wants to trade into a slightly higher (bearish) wave D target. The chart is a mess, because the market is thinly traded, and manipulated, in my estimation, but it is what it is. I think there's a good chance this pattern is wrong, but we'll get back on track once traders return from summer break. This is never a good time to trade. Short term support looks like the blue line, and I think there's a good chance yesterday's gap up, is filled.

 $SPX - I have 2 60 min charts I'm looking at. The first one shows the market trading in a tight range.

$SPX - broke out of the down-turned wedge, but the next direction is hard to predict. If the market breaks down we're looking at a washout to the 2400 level, but it could continue to break out to the top of the broadening range in purple.

 I have 3rd view of the SPX which I'll be updating in my twitter. Watch the range withing the thin blue lines, and the 2429 level.

I suggest you keep your trades on a short leash, and watch the $VIX. Support, or Pivot point, looks like 9.95 - 10. The chart below is going to determine the trade going forward. As long as fear remains contained, and the market continues to rally into next week, don't fight it.

 Financials look bad, but you know they want to drive them higher on earnings. Do we see risk taken off ahead of time? It's hard to say

I'm already out of time, so I have to cut this update short. I'll be posting the financial chart, and the Oil chart, after the opening bell.



Wednesday, July 12, 2017

Stock Market Update 7/12/2017 Oil breaks out

The title of today's update is deceptive, because although Oil broke out to a new recent high, it seems to be trading in a bearish pattern, and I plan to take profits in 3X Leveraged Oil and Gas ($GUSH) ASAP.

$SPX wants to go higher

I got 2 views of yesterdays pullback on the $SPX: 2 min chart: Reminder, I had a 2015 target on this pullback?

$SPX 1 min view - support becomes 2424. Resistance @ 2436

Bears who didn't cover on yesterdays rebound, are trapped, while the retail bears who took my advice not to trade yesterday (minus financials), missed nothing, have nothing to worry about. I would continue to sit on your hands, until we see something more tradable.

Looking at the 60 min SPX the market is not breaking out, and the 2436 level isn't a breakout. Better to just watch from the sidelines, for the time being. 

$INDU - The Dow closed absolutely flat, and futures up slightly all night, and that's no coincidence. This market is absolutely being rigged on light volume. 

If we see another pullback today, watch the 12340 level.

Tuesday, July 11, 2017

Market Update 7/11/2017

Not liking the market up here, but I think the sellers are still on vacation.

Monday we saw a little fund (computer driven) buying, take out our 2430 target, before the $SPX rolled over - going into the close.

This morning we're seeing more weakness. Could see a dead cat bounce off the 2426 level, and trade into a topping pattern, or pull back further, but I'm having trouble pinning down targets on the $SPX. I think it's just better to sit on your hands, until a pattern develops.

Maybe we hold up in the top of this range, or pullback, before retesting yesterday's highs. Whatever the case may be, the rally of the past few days doesn't look like the end of consolidation.

The Dow chart shows support at 21390, and again at 21350, but once we see consolidation complete, I think we're going to see another washout.

 Even Oil looks week, and looks like it wants to spend more time building a base.

 Might want to try selling the banks here, since they've finally snapped back to a lower high.


Support on the $RUT is the 50 day ma (1399.11). If that breaks, that would signal a risk off trade, but until sellers return I think it holds up.

No trade

Monday, July 10, 2017

Market Update 7/10/17

Friday we saw a sharp reversal, out of the down-turned triangle we were watching, and short covering going into the weekend, as predicted  -  see Friday's super-bullish update - but today I'm unsure whether this triangle is a bearish leading diagonal triangle. in larger consolidation pattern, or the end of consolidation. I think we could see continued consolidation, and maybe even a shake out below 2400 key support, before we see money put to work again.

$SPX short term resistance looks like 2430. Support at the pink line (as always). I'm not willing to make a short term prediction here.       

The larger consolidation pattern seen on the 2 hr chart:

Could even see a washout around the 2385  level before the end of the month.

We're also seeing an interesting triangle formation in the gold miners. Looks like bullish consolidation in a down-turned wedge, which should complete near the end of July, if the pattern holds.

Even Canada continues to consolidate in a funky down-turned pattern, but the interesting thing to note is that this coincidences with Friday's washout in Oil. I think we're about to see a big reversal in both...

 The rally in tech can continue, but I prefer Canada, and Oil here. and Canada, on this pullback.

Typical wave 4 - seen on the daily candlestick chart

Friday, July 7, 2017

Super Bullish Market Update 7/7/2017

Market completes consolidation in - you got it! - a "triangle". See yesterday's update, for more on complicated triangle patterns...

In this case a triangle marks the end of a complicated "combination pattern".  [A combination pattern is labeled (X - Y - (and sometimes) Z, but when you see a triangle form that marks the end of the pattern, because triangles (in theory) never repeat. More on these patterns, from Elliott Wave International ]

Looking at this pullback from a classical technical analysis stand point,  we simply went back and built a base around the 2400 level (as we should have done last Friday...), and held the previous low.
Higher low is always bullish. 2. Double bottom is bullish. 3. A shakeout just below the previous low, followed by a powerful reversal, is also bullish.
To add to my bullishness is the fact that the market made yesterday's low, while the $VIX remains contained. At $VIX 12.50 there's little fear in the market, and you're just not going to see big downside moves at $VIX 12.50. Once the $VIX breaks below $12 we should already be off to the races again,  perhaps on this mornings jobs number, but mainly for the reasons I pointed out in yesterday's update.  And to top it off it's short covering Friday, and Sunday is a full moon.

Speaking of yesterday's update

Oil rebounded into a head-fake wave B, as predicted, and sold off into wave C.

Now that we've seen a proper pullback in Oil I like it again.

The most rudimentary A-B-C corrective pattern, looks the one we just saw in Oil, as seen on the $USO chart below. 

Now that consolidation is complete, don't underestimate the strength, and duration of the next rally.


Thursday, July 6, 2017

Market update 7/6/2017 - continued consolidation

Seeing a surprise downside move led by European markets, overnight.

This takes us back to the 2418-19 level, which the market has tested several times over the summer, and as best I can tell this points to wave "B" (bullish) consolidation. I had thought we had completed a pullback (in wave 2) yesterday (ahead of the Fed minutes), but all we got was a weak rally...

As usual trading over the summer, and into a another holiday, turns out to be somewhat unpredictable, and a waste of time.

The one bright spot has been in the oil trade, where we most recently saw a false breakout, followed by support being taken out...

$USO - seen snapping back - in another wave "B" - this morning.

$SPX - seems to be trading in a contracting triangle (seen in purple).  Wave "b" is often a triangle, but not always...

Alt: Chart - an extended wave B trading in a broader range.

Alt Chart 2: SPX consolidates into a down turned (yet more bullish) triangle (or wedge). 

Like I said; wave B's are hard to predict, for several reasons: 1. They can trade into any pattern, including a triangle pattern. 2. A triangle pattern can trade into an upturned wedge (rare), down-turned (wedge common), sideways contracting, expanding (broadening)... 3. Consolidation  patterns take time to complete, and patience is a virtue. This make trading it a chore. 4. Each move within a triangle pattern divides into it's own separate, corrective, pattern (usually, but not always a zigzag). Wave's C, and E, can resemble triangles, when trading in the larger triangle pattern.   

I think part of this is just normal consolidation, but I also believe the powers that be want to hold the market down, until they return from summer vacation, and then drive stocks up into July OPEX. No doubt they placed bullish options bets, as the $VIX peaked out, last week. They dumped their shares, before leaving town, and collected on their bearish Put options, and when they return they'll be forced to put that money back to work, and those in the know, will collect on their bullish Call options. 

 The bigger picture:

The DOW could test the 21265 level at the open.  21200 is key support.

$SOX - Still waiting for big snap-back rally in Semiconductors, and tech, if not all time highs...

$NDX sitting on support 

$SPX - Looking at new all time highs on the $SPX once this consolidation completes.