Well, they rallied the market into the Fed meeting. It did seem suspicious when news of the drone being brought down by the Russians was released just a bit before the market close on Friday. Google, $ndx, and copper were looking precarious as all were making new month lows and below their lower BBs. The last two days have alleviated those conditions. Anyway, there needed to be an intervening bounce before the next Pi date.
Now a 700 year anniversary is upon us and will the Fed commemorate it with its next release. The dollar so far has bottomed as of Thursday with a retest of the low on Friday and doji days this week. It seems to be waiting for the Fed release. Meanwhile, gold and TLT seemed toppy on Friday and appeared to be indicating that crisis in the Crimea would be waning.
Well the Russians did fire an ICBM on Mardi Gras per the Clooney 1987 Gravity reference and then took down a drone last Friday. (In Gravity, they shoot down their own satellite setting in motion the disastrous chain of events in the film). It’s interesting to note the director of Gravity ended up writing and directing a pilot that appeared last week on US TV which was rather uninteresting but it also had a JJ Abrams connection(producer) who coincidentally was the famed producer of Lost. I never watched Lost but I ended up checking out the Flight 815 crash episode on youtube and suddenly noticed the similarities to the transpiring Malaysian Airlines episode. The 111 of the airliners debris in the sky followed by 11 in the next shot (in the form of an inverted V) seems to be indicating a sign of the end times for now. 111=31….11=21 or (7x7x7) or 777….ie Flight 370 ….BA 777…. BAs stock is getting a little heavy….down again today.
At the rate we are moving up it’s certainly looking like they are going to be at a “high” when the FOMC minutes are released this Wednesday and not a “low” as previously thought. However, I would not short it as history shows that a good 80%+ of FOMC days are bullish.
So, chances are that we’ll make a double top, slightly lower top, or pierce through to hit the 1900-1910 area before this rally turns back down. It should happen between this Wednesday the 19th and Friday the 21st.
We hit our upside resistance zone and backed off as I expected. However, it was pretty powerful and it’s not acting like it wants to give up those gains. I suspect that morning gap up wave will turn out to be some type of A wave up… meaning we are in some B wave down. If so, then they should break through that resistance zone on the next hit and make a run up for the current high.
I don’t see the weekly charts saying that just yet, but it’s possible I guess. I don’t think either of us will know until we first bottom on this short move down and then turn back up for “just a lower high” or to “make a new high”?
At this point I believe we are going to do the same pattern as what happen prior to the Legatus meeting Feb. 7th-9th and more importantly the 7th… which was the deadline date for the debt ceiling.
As we know we sold off in front of that deadline putting in the bottom on the 5th and then we rallied from there on out until a few days ago. It’s the old “sell the rumor, buy the news” event again.
So, since we have an FOMC meeting next Wednesday the 19th (which the Fed is expected to cut another $10 Billion from the QE) I’m expecting a bottom going into that meeting and then we should start the rally up to 1900-1910 from there. It’s likely to be choppy and should take 2-4 weeks.
On the low side I see the 1810 level as support from a horizontal trendline and 1815 from the 20 week moving average. Of course there’s the “even number” play of 1800, which could act like a magnet too.
In order for that to be the low it needs to happen going into this coming FOMC meeting next Wednesday. If so, then I could see a rally up from that level for 2-4 weeks starting.
Scenario Two:
We could also put in a bottom either today or Monday morning around the 1828.99 20ma on the daily chart and/or the prior low of 1834.44 making a double bottom. From there we could rally (especially since you know about “Turnaround Tuesday’s) up toward the downward sloping trendline of resistance coming in around 1860-1865.
Then at the FOMC meeting on Wednesday we top out with that rally to the 1860-1865 area being some kind of wave B up while the current move down is the wave A down. That would leave a wave C down yet to follow after the FOMC meeting, which could take us down to the 1770 area.
We must rally into the FOMC meeting for that scenario to play out. If we drop toward the 1810-1815 area into the meeting then I’ll be expecting them to rally up from it. Look and listen to the news as if they talk a lot about the $10 Billion more expected to be cut out of the QE then I’ll be expecting a bottom.
If on the other hand you hear them talk with a “positive bias” toward it… like “it’s already factored into the market” (or other words telling us sheep not to worry about it) then you know to WORRY ABOUT IT!
We’ll see in the charts as so far we have NOT put in any positive divergence to indicate that the bottom is in yet. There should be a move up to that falling resistance area at 1860-1865 at some point to make the wave B up and allow for a lower low (1810-1815 area) to happen and make that positive divergence.
When that happens is unknown? If it happens into the FOMC meeting then the following move down (the wave C) should be stronger and allow for a break of 1800-1810 with a target low area of 1770.
But, if we some how rally up to that resistance are of 1860-1865 prior to this coming Wednesday (as suggested in scenario one) and then turn back down for the wave C to bottom into the FOMC meeting then I’d expect the 1800-1810 to be the low, making that wave C down weaker.
The reason I suspect that is based on the time frame needed for each scenario to play out. The first Scenario is much shorting in time and therefore I would expect the distance up and down to be shorter as well.
The second scenario puts the 1860-1865 wave B up top happening on the FOMC day which of course expands the timeline out more on the wave A down and the wave B up. That would indicate that wave C down would have more time to play out too.
Couple that with the “fear factor” of the market hearing that the Fed’s are indeed going to continue withdrawing the QE money and there’s no reason to expect any rally as there’s no further news event to give the market a reason to bottom and therefore rally.
On the other hand, if you bottom into the meeting at say the 1810-1815 area then you might rally from something positive out of the Fed meeting. Since the charts are oversold on many shorter time frames anything “not negative” from the meeting would justify a rally.
However, a top into the meeting would indicate that the market is “expecting” something positive and wants to get a head start into the predicted “good news rally”, but that rally would work off most of the oversold conditions on the short term charts allowing for another wave down to start should the news NOT be as positive as they expected.
So while I would NOT go long I would go short should we hit the 1860-1865 resistance area. The projected move down from that zone won’t be determined until we know when that level is hit.
If hit on Monday then “Turnaround Tuesday” should play out to the downside with the expected low of 1810-1815 going into the FOMC meeting on Wednesday. If hit on Wednesday then I’d be looking for a lower low to follow… like the 1770 area, which should take 3-5 days I’d guess.
All in all it’s a tough call still, but there is still a possible rally to the 1900 area in play, but I don’t see it happening until first we bottom out the coming wave C down, and right now we still seem to be in the wave A down… meaning it might not happen until mid-April.
Well, they rallied the market into the Fed meeting. It did seem suspicious when news of the drone being brought down by the Russians was released just a bit before the market close on Friday. Google, $ndx, and copper were looking precarious as all were making new month lows and below their lower BBs. The last two days have alleviated those conditions. Anyway, there needed to be an intervening bounce before the next Pi date.
Now a 700 year anniversary is upon us and will the Fed commemorate it with its next release. The dollar so far has bottomed as of Thursday with a retest of the low on Friday and doji days this week. It seems to be waiting for the Fed release. Meanwhile, gold and TLT seemed toppy on Friday and appeared to be indicating that crisis in the Crimea would be waning.
Well the Russians did fire an ICBM on Mardi Gras per the Clooney 1987 Gravity reference and then took down a drone last Friday. (In Gravity, they shoot down their own satellite setting in motion the disastrous chain of events in the film). It’s interesting to note the director of Gravity ended up writing and directing a pilot that appeared last week on US TV which was rather uninteresting but it also had a JJ Abrams connection(producer) who coincidentally was the famed producer of Lost. I never watched Lost but I ended up checking out the Flight 815 crash episode on youtube and suddenly noticed the similarities to the transpiring Malaysian Airlines episode. The 111 of the airliners debris in the sky followed by 11 in the next shot (in the form of an inverted V) seems to be indicating a sign of the end times for now. 111=31….11=21 or (7x7x7) or 777….ie Flight 370 ….BA 777…. BAs stock is getting a little heavy….down again today.
At the rate we are moving up it’s certainly looking like they are going to be at a “high” when the FOMC minutes are released this Wednesday and not a “low” as previously thought. However, I would not short it as history shows that a good 80%+ of FOMC days are bullish.
So, chances are that we’ll make a double top, slightly lower top, or pierce through to hit the 1900-1910 area before this rally turns back down. It should happen between this Wednesday the 19th and Friday the 21st.
We hit our upside resistance zone and backed off as I expected. However, it was pretty powerful and it’s not acting like it wants to give up those gains. I suspect that morning gap up wave will turn out to be some type of A wave up… meaning we are in some B wave down. If so, then they should break through that resistance zone on the next hit and make a run up for the current high.
New Post: http://reddragonleo.com/2014/03/16/new-higher-high-still-coming-or-lower-high/
Even if you think everything is pink painted ponies you got to read this article. http://patriotsbillboard.org/the-malaysian-airliner-is-not-missing-much-more/
QQQ Weekend update: http://niftychartsandpatterns.blogspot.in/2014/03/qqq-negative-divergence-and-support.html
I don’t see the weekly charts saying that just yet, but it’s possible I guess. I don’t think either of us will know until we first bottom on this short move down and then turn back up for “just a lower high” or to “make a new high”?
re: ‘and then we should start the rally up to 1900-1910 from there’
—
Weekly charts are now saying ‘no new highs’.
If market closes next week <sp'1830…its very likely over for the bulls for some months.
We all see the divergences, we all know the market is tired after the giant ramp from Oct'2011.
Look to copper…that IS a major warning.
Gold’s Golden cross: http://niftychartsandpatterns.blogspot.in/2014/03/golden-cross-of-gold.html
Scenario One:
At this point I believe we are going to do the same pattern as what happen prior to the Legatus meeting Feb. 7th-9th and more importantly the 7th… which was the deadline date for the debt ceiling.
As we know we sold off in front of that deadline putting in the bottom on the 5th and then we rallied from there on out until a few days ago. It’s the old “sell the rumor, buy the news” event again.
So, since we have an FOMC meeting next Wednesday the 19th (which the Fed is expected to cut another $10 Billion from the QE) I’m expecting a bottom going into that meeting and then we should start the rally up to 1900-1910 from there. It’s likely to be choppy and should take 2-4 weeks.
On the low side I see the 1810 level as support from a horizontal trendline and 1815 from the 20 week moving average. Of course there’s the “even number” play of 1800, which could act like a magnet too.
In order for that to be the low it needs to happen going into this coming FOMC meeting next Wednesday. If so, then I could see a rally up from that level for 2-4 weeks starting.
Scenario Two:
We could also put in a bottom either today or Monday morning around the 1828.99 20ma on the daily chart and/or the prior low of 1834.44 making a double bottom. From there we could rally (especially since you know about “Turnaround Tuesday’s) up toward the downward sloping trendline of resistance coming in around 1860-1865.
Then at the FOMC meeting on Wednesday we top out with that rally to the 1860-1865 area being some kind of wave B up while the current move down is the wave A down. That would leave a wave C down yet to follow after the FOMC meeting, which could take us down to the 1770 area.
We must rally into the FOMC meeting for that scenario to play out. If we drop toward the 1810-1815 area into the meeting then I’ll be expecting them to rally up from it. Look and listen to the news as if they talk a lot about the $10 Billion more expected to be cut out of the QE then I’ll be expecting a bottom.
If on the other hand you hear them talk with a “positive bias” toward it… like “it’s already factored into the market” (or other words telling us sheep not to worry about it) then you know to WORRY ABOUT IT!
We’ll see in the charts as so far we have NOT put in any positive divergence to indicate that the bottom is in yet. There should be a move up to that falling resistance area at 1860-1865 at some point to make the wave B up and allow for a lower low (1810-1815 area) to happen and make that positive divergence.
When that happens is unknown? If it happens into the FOMC meeting then the following move down (the wave C) should be stronger and allow for a break of 1800-1810 with a target low area of 1770.
But, if we some how rally up to that resistance are of 1860-1865 prior to this coming Wednesday (as suggested in scenario one) and then turn back down for the wave C to bottom into the FOMC meeting then I’d expect the 1800-1810 to be the low, making that wave C down weaker.
The reason I suspect that is based on the time frame needed for each scenario to play out. The first Scenario is much shorting in time and therefore I would expect the distance up and down to be shorter as well.
The second scenario puts the 1860-1865 wave B up top happening on the FOMC day which of course expands the timeline out more on the wave A down and the wave B up. That would indicate that wave C down would have more time to play out too.
Couple that with the “fear factor” of the market hearing that the Fed’s are indeed going to continue withdrawing the QE money and there’s no reason to expect any rally as there’s no further news event to give the market a reason to bottom and therefore rally.
On the other hand, if you bottom into the meeting at say the 1810-1815 area then you might rally from something positive out of the Fed meeting. Since the charts are oversold on many shorter time frames anything “not negative” from the meeting would justify a rally.
However, a top into the meeting would indicate that the market is “expecting” something positive and wants to get a head start into the predicted “good news rally”, but that rally would work off most of the oversold conditions on the short term charts allowing for another wave down to start should the news NOT be as positive as they expected.
So while I would NOT go long I would go short should we hit the 1860-1865 resistance area. The projected move down from that zone won’t be determined until we know when that level is hit.
If hit on Monday then “Turnaround Tuesday” should play out to the downside with the expected low of 1810-1815 going into the FOMC meeting on Wednesday. If hit on Wednesday then I’d be looking for a lower low to follow… like the 1770 area, which should take 3-5 days I’d guess.
All in all it’s a tough call still, but there is still a possible rally to the 1900 area in play, but I don’t see it happening until first we bottom out the coming wave C down, and right now we still seem to be in the wave A down… meaning it might not happen until mid-April.