Wednesday, March 27, 2013

03/27/13: small short SPX for 1-2 day trade

Finally back from my trip.  SPX gapped down to 1552 today and bounced back to almost break-even, finishing a tad under 1563.  Traders are still buying all the dips.

I opened a small short today during the last hour.  My rationale is that we are 1) overbought on the CCI timeframes and 2) at support for DI-.  The risk for this trade is we break above hard over 1563 tomorrow.  This would validate an ascending triangle formation.  There is certainly weight to the bull argument here because the OBV has made a new high.

In the big picture, I am still expecting a new all time high for the SPX.  It is that the analysis between now and when that happens is very murky.  In the meantime I am staying nimble and letting the market dictate how I ought to trade.

I am expecting continued choppiness.  The ADX is crawling on the floor again.

There are a lot of differences amongst indicators.  We have no negative divergence on smaller timeframes but on the daily chart NYMO is still showing lower highs along with the OBV on the daily timeframe.  Hourly OBV does not show a negative divergence.

Thursday, March 21, 2013

Back to update next Wed 03/27

Currently in a country that blocks blogger but am VPN-ing overseas briefly.   Sorry for being unable to update and providing no notice.  No updates until next week Wed 03/27.

Current outlook is new all time highs on SPX in about 2 weeks.  1600 is the current target.

I think there is likely one more low coming at ~1530-1535 before the start of a multi-week rally to cap off this humongous rally.

Currently holding no position (covered all SPX short at ~1545-1550) since I won't be checking on the markets until next week.

Have a good one.

Thursday, March 14, 2013

03/14/13: added to short SPX

Markets trudged higher today and pulled off a 1563.23 so out of the past 13 trading days, 11 have been positive.  I am still holding onto shorts with a cost average of roughly 1555 with one last remaining lot to add if we still head higher (stop 1576).  I added more to the shorts today in what I believe is the start of a wave 4 of a higher degree.

On the daily chart, there are some small cracks forming.  There is negative divergence vs. NYMO.  Negative divergence vs. CCI 8 and CCI 21.  However there is no negative divergence on the longer CCI timeframes and with ADX.  OBV is also not showing a negative divergence.

The period now is very reminiscent of same time period last fact the fractal is almost identical.  Back then, SPX was trading 8 out of 9 days positive and finally made an immediate lower NYMO high.  It proceeded to correct the next 3 trading days before ramping up to another new high.

It is unclear if we will follow the same path but a lower NYMO high + the possibility of this being the ending wave v of 3 tells me I have to take the bet.  Hence shorted more at the EOD.  If we move fast down tomorrow then it is likely wave A with a wave B to follow up to 1563 again.  Then a C wave to take us down to 1500 area.

Tuesday, March 12, 2013

03/12/13: hold SPX short, tgt 1535 Friday

SPX made another new high today and started to correct afterwards to finish in the red.  Quite a rarity to see red nowadays.  This time only 3 points away from the original 1560 target I set when I first started this blog.

The DI- did in fact finally break out of its slumping downtrend in the first half of today as mentioned previously.  CCI 233 (the big bull trend) also broke as well.  We have oversold conditions on the lesser time frames setting up the bounce we are seeing now.

I think 3/13, we see one little move up and then it's another down wave as the DI- picks up some steam.  I know the Dow and RUT have made all time highs but how come it means the SPX must make a new all time high as well?  I think it will make it eventually but in the meantime I'm still playing this as the SPX corrective phase.

I have a target set for 1535 by EOD Friday.  That is only about a 1% down move.  In the big picture, this phase is going to look choppy so I will be looking to make some quick trades next two weeks.

Sunday, March 10, 2013

03/10/13: short term top imminent - tomorrow likely

Quick update.  SPX gapped up on the better than expected NFP report but then filled the gap and subsequently rallied again to finish the day at 1552.

March 8th was a possible fib change.  However DI- and CCI trend lines are telling me that March 11th is the most likely candidate for a short term top.  DI- has been crawling on the floor but is looking like it's ready to break out tomorrow.  Regardless, the next day or two ought to put a temporary cap.

If I had to set a target, I'm looking for a trip back to the 50MA daily and to finish the wave no lower than 1474.

Thursday, March 7, 2013

03/07/13: still tgting 1560 by Friday EOD

SPX traded in an even tighter range (roughly 6 points) as traders await the NFP number tomorrow.  Markets are forming an ascending triangle and have been knocking on the door of 1545 the past couple of days.  The more times the market bangs on the door, the weaker that door gets.

Short, medium, and long term trend still remains up.  No change to the target of 1560.  A 1+% movement is clearly not unattainable   1560 is slightly outside the minimum target of the ascending triangle but certainly markets can go further than what objective rules would indicate.

This seems to imply that the NFP report ought to be positive/surprise.

Looking back, it is amazing that the markets have reached this level....back in March 2009, I wouldn't have imagined the market would get back to this level.  Certainly one could draw a line connecting the tops of 2000 and 2007 and say, hey, in about 4 years yes we could be at this level but who would have put money on that back then?

Should tomorrow make it to 1560, the SPX would be up 8 out of the past 9 trading days.  Hence, I will be on the lookout for a possible short position after 1560.

Wednesday, March 6, 2013

03/06/13: target 1535 then 1560 into Friday

Quick update - SPX opened to make another new high at 1545.25 then chopped around into the close to end at 1541.46.  Trading range remains relatively narrow.

Today completed what appears to me the wave a and b of wave iv and is now in the process of finishing wave c.  I think target for this wave c is looking like 1535 tomorrow.  This is both (minor) trend line support and also the 20 EMA on the hourly.  If I'm right, I'm expecting the stop at 1535 to be very short lived.  It would present the last major buy point up into 1560.  At present time, it's still BTFD mode.

OBV has declined further so it indicates to me that the pullback is not complete yet.

Tuesday, March 5, 2013

03/05/13: looking for small pullback tomorrow, Dow All Time High, new SPX 5Y high today

Markets roared out of the gates today.  DOW opened with an all time high and the SPX made a new 5Y high once again.  Not surprised really as I've been saying several times now OBV was indicating a price higher than 1530.  What would have been surprising is if we never made it to 1530 again.

Now that a new high is in place (and in fact a new all time high for the Dow), what's next?  Can the SPX reach a new all time high to avoid a serious negative divergence?

Currently I am still bullish for this week however I just don't think we can beat all time highs on the SPX this go around.  Expecting a small pullback tomorrow to the low 1530s before the ending wave v of this wave.  It ought to take us near 1550 or higher...possibly to 1560 original target.

CCIs are back near monster levels especially the CCI 233 on the hourly.  However, we have a rising wedge developing that is targeting completion March 8.  CCIs support lines are also all targeting March 8.  Coupled with the fact that March 8 is also a fib trend change since the 1530 high, I am on the look out for a potential ending wave v here.

Monday, March 4, 2013

03/04/13: still looking for 1560 this week. neckline break?

Markets were choppy in early/noon trading but ultimately bulls won and finished an hourly close above 1525.  This was the best daily/hourly close since Feb 19/20.  It also sets up a possible continuation of this IHS that I and many other traders have been tracking during this entire mini-correction.

I don't have much else to say other than OBV is still at elevated levels relative to its level at 1530.  This still indicates to me that we will most likely see a new high above 1530.

There is a possible fib trend change on TD 3/8 which could signal the beginning of a downtrend.  However, all moving averages are still pointing up and the hourly has survived a possible 50/200 cross.


Friday, March 1, 2013

03/01/13: long SPX - looking for a trip up to 1560 next week

Markets gapped down to my target from yesterday, hit the low in the first 30 minutes of trading and rallied up to stall at the 1515-1520 area.  For most of the afternoon, price action traded in a very tight range.  It looks like price wants to break out of this range very quickly on Monday.

My target remains 1560s first week of March.  This could happen really quickly.  A gap up Monday open could be all it takes really.

After 1560s, I will be on the lookout for the end of wave 5.  The next target after 1560s is a trip back to where we started this year: 1420s.

Generally speaking, it is rather rare to see OBV make a new high and price never make a new high.  While not guaranteed, it is good odds.

I bought around 1505 which was my original target after price bounced off the low.  i thought maybe I could get better entry but markets didn't give that opportunity.  Next I bought another lot on the retrace which I quickly felt buyer's remorse since I generally avoid trading the middles.

This week was pretty good.  I think many traders out there may be frustrated at all the back and forth bull/bear sentiment but if you want to be successful in this business, you have to play whatever the market throws at you and turn it into lemonade.

Happy trading and have a good weekend