On Friday we had a very strong rally and while it looks on the charts to be very bullish with a bottom now being put in I don’t think we are done yet on the downside. It’s still too early to tell if we are going to go back down and breakdown through the 1737 low or hold above it with a higher low, but we certainly should be turning back down again.
I’m looking for another 5-10 points more on the upside before we rollover and start the next move down. That’s somewhere between 1803-1808 SPX, which should hit on Monday (or Tuesday if we drop back 5-10 points Monday forming a bull flag into the 11th).
There is a possible “inverted head and shoulders” pattern in the making if we go down and put in a higher low (maybe in the 1760-1770 as shown in this chart: http://stockcharts.com/public/1092905/chartbook/214659881;). But, do note that the market is still in an “intermediate” term bearish mode and about to end the “short term” bullish mode.
While the “long term” mode is still bullish that shouldn’t start until early March. This means we should be heading down the rest of this month and be lower then the 1737 current low. This “implies” that the “right shoulder” might not play out and instead we start down in a nasty wave 3 (or C?) with the up move from the 1737 low being the wave 2 (or B?) up.
So I wouldn’t get too wild about going long in the 1760-1770 area thinking it’s just a pullback before a new rally up much higher starts as that might not be the case. The charts just don’t support it yet. After another new low is put in the weekly charts should bottom out and allow a new rally to start, but I don’t think we are there yet.
But for now let’s just take one day at a time and look for that slightly higher move up of 5-10 points to get short and see how far down it takes us? We (us Bears) could be pleasantly surprised when it continues down past the target zone of the right shoulder and keeps on falling?
Based on today’s strong move up this could easily continue into Tuesday the 11th of next week. While we should pull back slightly on Monday I wouldn’t expect much on the downside that day. Then back up again into Tuesday seems likely.
From there we’ll have to re-evaluate everything to see if Legatus was a bottom (it started on the 6th) or a top (as we are in the middle of it now)? The charts look very bullish on the short term and move upside seems likely early next week. Only some unknown shock could take the market down hard on Monday, and I have no way of seeing what that is?
Considering how high we have went today I’ll be looking to go short over the weekend. We have completed a 5 wave pattern up from the 1737 low and could just be in the first A wave of a larger ABC pattern inside wave 2 up.
This would imply that we drop Monday into a B wave down that puts in a higher low (maybe 1750-1760?) and then rally back up to 1800-1810 for the final C wave inside a larger wave 2 up.
However, if that’s not the pattern and then it’s possible we have completed the larger wave 2 up with just 5 smaller waves inside it, instead of an ABC pattern.
Therefore, picking a spot sometime today to short seems wise as we have high odds of either a higher low happening on Monday from a B wave down, or a break of the current low and the start of the crash wave 3 down. Either way if you are short you can catch a nice move down.
If it’s just a B wave down then you can exit the short sometime Monday and even go long the C wave up too? Then short again from a higher level for the start of the larger wave 3 down. And of course if this is all we get on the upside then the move down next week should be really ugly as will likely be the start of the larger wave 3 down.
It’s James Deen’s 28th birthday tomorrow, star of the Canyons, my 2nd or 3rd best film of the year. Lindsay Lohan is 27 years 7months5days old tomorrow.
My top film of the year: Rush followed by The Canyons and Hunger Games.
Rush: The German Grand Prix of August 1, 1976 depicted in the film was 13,703 days ago tomorrow.
I think we are going to tag that 1775-1780 spx area tomorrow and the drop on Monday… but I think it will only be a B wave down with today’s move starting the A wave up. Then probably a C wave up on Tuesday to complete the entire wave 2 up. Could hit 1800-1810 area on the 11th-12th before rolling back down again.
On Friday we had a very strong rally and while it looks on the charts to be very bullish with a bottom now being put in I don’t think we are done yet on the downside. It’s still too early to tell if we are going to go back down and breakdown through the 1737 low or hold above it with a higher low, but we certainly should be turning back down again.
I’m looking for another 5-10 points more on the upside before we rollover and start the next move down. That’s somewhere between 1803-1808 SPX, which should hit on Monday (or Tuesday if we drop back 5-10 points Monday forming a bull flag into the 11th).
There is a possible “inverted head and shoulders” pattern in the making if we go down and put in a higher low (maybe in the 1760-1770 as shown in this chart: http://stockcharts.com/public/1092905/chartbook/214659881;). But, do note that the market is still in an “intermediate” term bearish mode and about to end the “short term” bullish mode.
While the “long term” mode is still bullish that shouldn’t start until early March. This means we should be heading down the rest of this month and be lower then the 1737 current low. This “implies” that the “right shoulder” might not play out and instead we start down in a nasty wave 3 (or C?) with the up move from the 1737 low being the wave 2 (or B?) up.
So I wouldn’t get too wild about going long in the 1760-1770 area thinking it’s just a pullback before a new rally up much higher starts as that might not be the case. The charts just don’t support it yet. After another new low is put in the weekly charts should bottom out and allow a new rally to start, but I don’t think we are there yet.
But for now let’s just take one day at a time and look for that slightly higher move up of 5-10 points to get short and see how far down it takes us? We (us Bears) could be pleasantly surprised when it continues down past the target zone of the right shoulder and keeps on falling?
Blackberry Weekend update: http://niftychartsandpatterns.blogspot.in/2014/02/blackberry-weekend-update.html
SPY Weekend update: http://niftychartsandpatterns.blogspot.in/2014/02/spy-weekend-update.html
IWM Weekend update: http://niftychartsandpatterns.blogspot.in/2014/02/iwm-weekend-update_8.html
Based on today’s strong move up this could easily continue into Tuesday the 11th of next week. While we should pull back slightly on Monday I wouldn’t expect much on the downside that day. Then back up again into Tuesday seems likely.
From there we’ll have to re-evaluate everything to see if Legatus was a bottom (it started on the 6th) or a top (as we are in the middle of it now)? The charts look very bullish on the short term and move upside seems likely early next week. Only some unknown shock could take the market down hard on Monday, and I have no way of seeing what that is?
The charts look very bullish right now, so shorting is going against the grain.
Considering how high we have went today I’ll be looking to go short over the weekend. We have completed a 5 wave pattern up from the 1737 low and could just be in the first A wave of a larger ABC pattern inside wave 2 up.
This would imply that we drop Monday into a B wave down that puts in a higher low (maybe 1750-1760?) and then rally back up to 1800-1810 for the final C wave inside a larger wave 2 up.
However, if that’s not the pattern and then it’s possible we have completed the larger wave 2 up with just 5 smaller waves inside it, instead of an ABC pattern.
Therefore, picking a spot sometime today to short seems wise as we have high odds of either a higher low happening on Monday from a B wave down, or a break of the current low and the start of the crash wave 3 down. Either way if you are short you can catch a nice move down.
If it’s just a B wave down then you can exit the short sometime Monday and even go long the C wave up too? Then short again from a higher level for the start of the larger wave 3 down. And of course if this is all we get on the upside then the move down next week should be really ugly as will likely be the start of the larger wave 3 down.
ES chart update: http://niftychartsandpatterns.blogspot.in/2014/02/s-500-futures-chart-analysis.html
It’s James Deen’s 28th birthday tomorrow, star of the Canyons, my 2nd or 3rd best film of the year. Lindsay Lohan is 27 years 7months5days old tomorrow.
My top film of the year: Rush followed by The Canyons and Hunger Games.
Rush: The German Grand Prix of August 1, 1976 depicted in the film was 13,703 days ago tomorrow.
I think we are going to tag that 1775-1780 spx area tomorrow and the drop on Monday… but I think it will only be a B wave down with today’s move starting the A wave up. Then probably a C wave up on Tuesday to complete the entire wave 2 up. Could hit 1800-1810 area on the 11th-12th before rolling back down again.