Sunday, February 28, 2010

Still floating around...

Ok...we are still in a fairly "bullish" market. Consumer sentiment is way down, new jobless claims was just short of 500k, existing home sales were in the pits, and Greece is in huge trouble. The market absorbed it all, as well as the earthquake in Chile it seems based on futures. The Futures is showing a bearish rising wedge that should break down before 3/3. In the mean time we have room to run up to the upper trendline.
Same for the VIX, there is room to move to the lower BB before moving up again.
SPY is still hanging around the 62% retrace of the latest drop. The next week will be telling. The waves the last week overlapped alot saying we are in some sort of corrective.

Thursday, February 25, 2010

Big reversal...where did that come from?

Mid morning I am thinking wow this is minute[iii] and we are tracing out a bear flag, and BAM! we get a strong price move up to finish out the day. This could be a 1-2,1-2 set up but there is no way to tell. We still have GDP tomorrow.
VIX rebounded off the 20ma which happened to be intersecting a support/resistance line.

Wednesday, February 24, 2010

A new minute [ii] high? or has [iii] started...

Is there a new minute[ii] high in the works? If so its likely to be in the dotted resistance band shown in the chart above. Another possibility is that minute[ii] is over and we are finishing (ii) of [iii].
Did the VIX bounce off the lower BB or does it require another bounce before proceeding to new highs? Hard to tell at the moment as today appeared to be an inside day.

The rest of the week shall be interesting with jobless claims tomorrow and GDP on Friday. Jobless claims has established a rising trend again.

Monday, February 22, 2010

One more little run up to resistance,,,

The bounce up looks like it has one more little run left. Potentially near the 79% retrace area which is in the middle of the resistance area denoted by the black dotted lines. In strict EW terms that is it, unless of course the count is wrong :-P
The VIX looks ready to rebound up. Nine down bars in a row is impressive. In other words it has taken 9 days to try to recover the damage that was done in essentially two days.
BPSPX:CPC still above its 20MA. If you look at the top part of the chart you will see just the BPSPX. From the 73 area it moved to the 65 area during the first week of February. A move of 6 points down when the BPSPX is above 70 is a strong technical sell indicator. Of course it happened during the same week as when the 20ma crossed the 50ma down.

The move up still needs a retrace and the nature of the retrace will be interesting. Will we move sharply down to the lower 900 level if this is minute [iii] or will we bounce around minute[ii] longer? My bet is that we bounce up a little further and then drop like a rock. The BPSPX:CPC has me a little worried though.

Sunday, February 21, 2010

Say it isn't so...

There was a bit of a break of the rising channel up that represents minute [ii]. Other than that it looks good as its at the 62% retrace of minute [i].
VIX daily looks beautiful with a touch of the lower BB. Looks like a good point to rebound from. we have a problem. The BPSPX:CPC has now crossed its 20MA from the bottom. This has typically been an early indicator to get out of your short position. I have drawn green lines where this has happened in the past. Its not that we are going into a bull market...but rather sentiment based on a combination of the bullish percent index and the putcall ratio is now moving up strongly.

At this point we just have to watch the market closely. On strictly EW terms I expect the market to fall like a rock at some point next week. There might be some upside room but there is currently strong resistance right above the current price levels. If BPSPX:CPC moves up strongly again tomorrow, I would say its time to scale back on the shorts.

Thursday, February 18, 2010

Fed marks the start of Minute [iii]

The Fed stepped right up to the plate and started minute [iii]. SPY hit the 62% retrace and futures indicate a sharply lower open tomorrow. Hope you guys loaded up short today.
Dipped below that red support and almost made it to the lower BB. Tomorrow will be really interesting.

Wednesday, February 17, 2010

Thats probably about it...

The move today should be about it. There might be a small move to the 110.5 area, but there is strong resistance there. I am loading up short right now. The green area is my target for minute [ii]. I expect minute [ii] will end and we will break that trend line I have drawn on the stochs.
A small move to the red line on the VIX is possible then I am expecting the next major VIX move to push us to the 31 area or higher.

Never enough time in the day...

I had planned to do this update much earlier and have it be a bit more extensive, but various factors of life have prevented me from getting to my computer until now. [ii] is about to hit my ABC target I posted last week. How much further up can it go?
I think there is a bit more room to go based on the VIX. I suspect we may move to the red resistance area line on the VIX and consolidate around the 20ma while the BB pinches a bit. This will set us up for another big move which I see as minute [iii] down.

I see the market moving up for a few more days, but I wouldn't wait around trying to catch the top. Now is a good time to start building that short position. The move down could be fast and unexpected. As this should be wave [iii] down it should be fairly strong.

Sunday, February 14, 2010

I have been out of town for a funeral. Right now we are still stuck in a correction up. I will post an analysis tomorrow evening.

Wednesday, February 10, 2010

Moment of truth tomorrow...

Tomorrow is the moment of truth, we will discover whether this is really ABC up for minute [ii] or whether a sharp downtrend will emerge that will show us that we are in minuette(ii) of minute [iii]. A head and shoulder formation has formed that could supported the latter.
VIX looks like its gravitating back to the 20ma.
Nice separation of the 20ma and 50ma.

It looks like we should know tomorrow if we are really in minute [iii] down or minute[ii] up.

Tuesday, February 9, 2010

Quick update

Sick today, but the market is behaving as expected. In the middle of C wave up, which in turn is in itself an ABC move. We are currently in a wave b or wave 2 of C up.

VIX still needs to return to the 20MA.

Expecting an up day tomorrow.

Monday, February 8, 2010

ABC correction under way

ABC correction underway. I am looking for a top near the early Feb highs. It works out to a 1.62 expansion of A.
VIX did not confirm the bearish candle set up from yesterday. Still a move to the 20MA is expected rather than another trip to the top BB.

BPSPX:CPC went down today even though the market went up. It has confirmed and I will be taking a larger short position on the retrace up.

Sunday, February 7, 2010

Looks up...again?

The dailies printed a bullish Dragon fly doji on SPY. VIX printed a gravestone doji. So odds are high that we will at least retreated back the 20MA.
The question is did we finish minute [i] down and are going into the minute [ii] retrace finally? Or was the last bump up the minute [ii] retrace and we are bumping up right now for minuette(ii) of minute[iii]. Daneric and Kenny both had excellent analysis for this being minuette(ii) of [iii] based on market internals. For now we have to watch the VIX, I believe the minute [ii] retrace will take us below the 20MA. If we bounced at the 20MA on the VIX then this is minute [iii].
BPSPX:CPC confirmed that we are in an intermediate downtrend.

So in conclusion...up tomorrow :-P

Friday, February 5, 2010

Totally where are we?

Here is my revised count. I really did not expect the drop to be as strong as it was. Just as the bull rally was stronger than expected since last march. This sharp drop is stronger than I expected for Minute [i]. Now there is the possibility that where I have marked (iv) could be minute [ii] and we are in for a bad Friday and a black Monday. I think its too early for that. We are in the early stages of P3 down.
VIX painted out a bull flag and bounced off the 20MA. I was expecting a run to the lower BB for minute [ii] but instead it headed to the upper BB again.
BPSPX:CPC has not crossed. But its awfully damn close. Note that it will probably cross and the market may spike during that correction up. Regardless it will confirm the down trend.

I am forecasting a sharp bounce up. But I have been wrong many days in a row now as this turn has been much strong than I anticipated.
The first chart had the fibs drawn where I was looking to see how much my (iv) retraced the previous wave (iii). The above chart shows the fib areas for the actual minute [ii] retrace if the count is right.

Tuesday, February 2, 2010

Finally Minute [ii]...

Out of town last night, but finally it looks like Minute [ii] is well underway. My (iv) should be moved to the right slightly. Looking for a small move down or sideways motion tomorrow, followed by a final run up to end Minute[ii].
The VIX has retreated to the 20ma. Will it bounce on the 20ma or make a run for the lower BB for a much deeper retrace. At this point I don't know, if enough bulls jump on board we can have a sharp deep retrace up to the 78% area. There is still another day or two for minute[ii] to play out.
BPSPX:CPC is still looking good. Still another week or so before we get a confirmation.