SPY Swings

3/13/2011 update

2011-03-13T22:26:00.003-04:00

The chart says it all...looks like P3 has started...

Update 02/08/11

2011-02-08T21:44:00.004-05:00

We rebounded off the lower BB on the VIX. This pretty much guarantees that the next couple of days (or rather however long it takes to get to the upper BB) will be down in the market.

The BPSPX:CPC 20ma crossed the 50 going down and the MARKET has still risen! Right now is a tremendous low risk shorting opportunity!

01/30/11 Update

2011-01-30T22:53:00.002-05:00

The VIX move was quite spectacular. We started near the lower BB and finished well above the upper BB. That type of move does not happen often and it does not bode well for the future of the market.
BPSPX:CPC 20ma looks to be curling over. I would short any bounced up on Monday or Tuesday. Confirmation of the move down requires the 20ma to cross the 50ma from above.

01/27/2011 Update

2011-01-27T22:01:00.003-05:00

The VIX visited the lower BB. I expected a retreat to the 20ma, but the move to the lower BB gives more credence that the next 4-5 days will be down in the market.
The 20ma on the BPSPX:CPC has rolled over and the indicator has been going down even as the market has moved to new highs. I think our top is rounded.

01/23/11 Update

2011-01-23T22:32:00.002-05:00

Sitting at the 78% retrace level. It has been a huge march up since last September.
VIX printed a huge white candle. So is it a move back to the MA before a huge move up?
BPSPX:CPC may have turned over. We will need a few more days before we can tell for sure, and even more time before the 20 crosses the 50.

12/29/10 Update....WOW

2010-12-29T19:24:00.002-05:00

Wow...look at that move up from late August, there is barely any retrace. Here we are getting ready to move into the New Year and the market as a whole is peaking out. Volume is dropping, but then again volume is always low around the holidays. We should see a good retrace 1st quarter, but is it a retrace or the beginning of P3 (is it ever gonna come).
VIX spiked much more than the market and is now diverging. Option volatility is now rising as more people buy insurance at these lofty levels. Still its low and no one is really scared.
BPSPX:CPC's 20MA is still pointing straight up. It has managed not to curl over in these past 4 months, which is quite a feat.

12/12/10 Update

2010-12-12T21:50:00.003-05:00

Was that finally a reversal candle on the VIX daily? VIX is in nothing to worry about range...from which typically "Oh craps!" are launched.
I waited a whole week for the BPSPX to turn...and it did not...everyday we maintained above the 20ma. I am looking for a down turn still, but with the holidays upon us this is typically an up/maintain level period.

12/05/10 Update

2010-12-05T22:09:00.003-05:00

SPY looks to have doubled topped with the daily stochs diverging a bit.
VIX looks to be at resistance and looks to be ready to rebound up. Note the trend from mid October in the MACD. Definitely looks like a turn around point.
BPSPX:CPC has been unable to achieve its previous highs. A turn around here is near...as in Monday/this week.

11/14/10 Update

2010-11-14T23:45:00.003-05:00

Look at the sharp drop in the BPSPX:CPC. This is the first time it has cracked the 20ma since mid October. A few more days below and we will confirm a turn in the 20ma and a new downtrend.

11/07/10 Update - To The Moon Alice!

2010-11-07T18:24:00.002-05:00

Ok...a refitted happier green trend line. It does show that there is still a wee bit more to the advance. Looking for the 1228 target mentioned on Thursday. The Honeymooners was in reality before my time, but Ralph always threatened "To the moon Alice!" but he never laid a hand on her as far as I remember :) Alice never made it to the moon...and neither will the market.
We only sit on the outer BB's for so long before we revert back to the mean. If our economy is so good, why is Bernanke initiating all those bond buys? China is to us as we were to Great Britain...The next century will belong to them...for us its going to be a struggle just to maintain status quo.
The next turn in the BPSPX:CPC is going to be the big one. For now its better to stay on the sidelines until we get an indication of the turn.

11/04/10 Update

2010-11-04T23:59:00.002-04:00

Wow, what a move today. While spectacular, volume was not huge. It did however show that P2 has not ended and there may or may not be more of that to come. For the SPX we need to get to 1228.7 for the 62% retrace, we are currently at 1221.06. Note that we are close enough that a turn down tomorrow could end P2, or we could even go to 1381.5 for the 78.6% retrace. A turn down now is dangerous in that it looks like a double top, whats more odds are high for a reversal.
VIX bounced off lower BB, so now you expect it to move to the 20MA.
BPSPX:CPC up considerably but still below a recent high even with todays spectacular move. Need to have it under the 20ma for a few days before we confirm a reversal in the market.

11/01/10 Update

2010-11-01T21:11:00.004-04:00

The market seems to be topping out. The stochs have fallen even though the market has maintained roughly the same level.
The VIX touched the upper BB. I am looking at a retreat to the 20MA and then a push back up to and out of the upper BB. This could easily happen in the same day.
VIX:VXV has finally broken out of its range to the upside. Its been stuck below the dotted red signal line since July.
BPSPX:CPC has no longer been making new highs even though the BPSPX has. Expecting a pull back soon that will bring the BPSPX:CPC below the 20ma.

10/25/10 Update

2010-10-25T21:56:00.002-04:00

Daily stochs are showing strong divergence in SPY.
Today SPY was up and the VIX was up, this typically is not a good sign for the market as the VIX move shows the underlying uncertainty. Yet another divergence pointing to a roll over soon.
BPSPX:CPC was still up, but the rate of change in the 20ma is slowing down. It has yet to rollover, but it is slowing down. Again we must wait for the 20ma to turn over before getting full short again.

10/21/10 Update

2010-10-21T21:41:00.003-04:00

We closed at the lower trend line of the wedge. Tomorrow should be down.
VIX broke the trend and closed below.
BPSPX:CPC was surprisingly down today. Tomorrow should be a down day for the market, but still waiting on indications that we had the top of minor 2 today.

10/19/10 Update

2010-10-19T21:13:00.002-04:00

SPY dropped right out of the wedge. Tomorrow will be interesting. Do we follow through on the drop or manage a recovery.
VIX formed a spinning top, but closed below the red resistance line.
BPSPX:CPC was down sharply, but we will need several closes below the 20ma for it to start curling down.

10/18/10 Update

2010-10-18T21:28:00.003-04:00

The rising wedge shown by the red dotted lines is ending soon. Could it strive for a double top?
Positive divergences in the VIX compared to SPX. This again points to a top being near.
BPSPX:CPC was down today even though the BPSPX was up and the market was up. Still waiting for it to fall below its 20ma before the turn around.

10/11/10 Update

2010-10-11T21:18:00.002-04:00

VIX:VXV made an all time low. It has never been down this far. I thought it was a bad print till I sat down and calculated it out. Hard to see it go much lower, this is a major extreme. A move up in this indicator is a move down in the market usually.
SPY formed a doji star today which is a bearish candle stick formation. Again we are still sitting around waiting for Minor wave 2 to end. Today looks to be it.
Wow, the VIX closed way out of the BB. The BB in the chart above spans two standard deviations and normally is able to encapsulate moves. A move down out of the BB like that hasn't been seen since 2004 in the second quarter.
BPSPX has almost made it to the 70 level. Tomorrow better be a big turn around...but its opex week. Additionally, today was the lowest volume day of the entire years...

10/10/10 Update

2010-10-10T20:09:00.004-04:00

Stoch's still diverging a bit and volume has been down.

The VIX touched the lower BB, now its time for a move to the 20ma and then above.
BPSPX:CPC 20ma has yet to turn, basically waiting for a move in this indicator now.

10/05/10 Update

2010-10-05T21:16:00.004-04:00

Wow, we hit the 78.6% retrace today. If there is a place to turn its now...but then I did say that at the 50% retrace and the 61.8% retrace too...
Ok...was this the proverbial fake out above the upper portion of the rising wedge that proceeds the drop? Or is this the beginning of another leg up? Slow Stochs are diverging a bit, but this can be rectified with a more up days.
VIX is diverging, it is not making new lows with the new highs being made on the indexes. I think this is strongly indicative that people are not confident in these new highs.
BPSPX:CPC also diverging a bit. It was down today even though the market was sharply up.

10/03/10 update

2010-10-03T22:22:00.005-04:00

SPY is staring at the red resistance line almost everyday and just can't get past it.

VIX closed right at the 20MA. Not much I can get from this, it could go either way. The MACD histo is positive which means it VIX is trending up...but the histo is also trending down.

BPSPX:CPC 20 ma has yet to turn which is quite surprising.

Generally still waiting for the market to turn again.

09/29/10 Update

2010-09-29T20:49:00.004-04:00

Looks like we really don't want to pierce that red resistance area. So what point of view do you prescribe to? Coiling up for a move up? or running out of steam from the last move up? My view is the latter as the move has had an upward bias since mid September. Typically a move up is preceded by trading in a channel with a slight downward bias.
VIX closed above the 20MA...
That should be it for the BPSPX:CPC. We will see soon enough.

09/28/10 Update

2010-09-28T20:35:00.002-04:00

We squeaked out a new high but stochs did not. Again we bounced off the red resistance area.
VIX closed at the light blue resistance line which is also where the 20ma ended at, BB's are starting to pinch.
BPSPX:CPC move down a good amount today. One more day at most before a sharp move down.

09/27/10 update

2010-09-27T20:02:00.002-04:00

SPY touched the red resistance line and formed a dark cloud cover bearish reversal pattern. This is among the more reliable of candlestick patterns.
VIX closed near the 20ma. MACD histo looks like it may be turning back up.
BPSPX:CPC 20ma has crossed the 50ma moving up. Normally this is where you would go long, except that everything is now peaking. The 20ma spent a minimal amount of time below the 50 and I expect it will spend a minimal amount of time above the 50 before turning back down.

09/26/10

2010-09-26T22:08:00.002-04:00

Wow, the move up on friday was not a surprise, but the magnitude of it was. Thursday's reading was tricky with all the candle formations pointing up. Slow stochs diverging a bit. Again SPY touched the red resistance line and finished the day near it.
The VIX pull back that far was quite surprising. I would have thought that a pullback to the 20MA was more likely and more of what I was expecting. The gap below the 20MA and then the move lower surprised me.
Based on the time series since May, the BPSPX:CPC looks like it only have 0-2 days left before it turns sharply down.

09/23/10 Update

2010-09-23T21:50:00.003-04:00

Price action touched the red resistance line bounced back down and closed below the blue neckline drawn for the inverted HS. The only issue is that the candled formed has gravestone doji/long legged doji characteristics that are bullish reversals.
The VIX cleared the 20MA and closed above. I would not expect it to move below again for awhile. BUT it did form a dragonfly doji which is a bearish reversal for the VIX (bullish) for the market.
I added the thin blue line to show that we are a bit high on the VIX:VXV than we have been on other "failures" to launch.
More divergence from the BPSPX:CPC. It moved up slightly today. The BPSPX was actually unchanged but there was an increase in Call buying compared to yesterday.

09/21/10 Update

2010-09-21T22:02:00.002-04:00

Spy touched the upper resistance line and bounced off.
VIX is still sitting in a tight range.
A bit of divergence today. BPSPX is up, but the SPX was down.

09/20/10 Update

2010-09-20T22:01:00.003-04:00

SPY broke cleanly out of its previous trading range. The red dotted line is a key area as it represents the opening of the huge black candle in early May as well as filling the open gap down that was left over in early May.
Now the VIX has held the red support line. At this point I would think a trip to the lower BB is in order before finishing the market rally.
A lot of call purchases in equities AND indexes relative to puts. This is strongly contrarian. For the short term there maybe a pull back before new highs.
BPSPX:CPC was sharply positive again. Shorts are going to be squeezed a bit more. I dumped a portion of my quarterlies for a loss and rolled part of that into October.

09/15/10 Update

2010-09-15T22:21:00.003-04:00

Stochs look like we need a pullback. The count looks like we are still in Minor 2 and possibly near the end of it.
VIX and SPY both positive today. Possibly a green day up tomorrow.
BPSPX:CPC averages moving back together again...

09/13/10 Update

2010-09-13T22:12:00.003-04:00

Price Chart is very bullish. We have an inverted H&S pattern that has formed as well as a rising triangle (Connect the H and R with a trendline). The H&S target is actually at about 125. The 01/10 highs at around 114 should offer strong resistance.
The VIX closed sharply lower and correct any negative divergences from Friday.
BPSPX:CPC is still saying sell...If the 20MA crosses above 50MA moving up, its time to get out of short positions.

09/12/10 Update

2010-09-12T21:46:00.005-04:00

So we gapped up over the trend line, this fine Sunday evening. Is this all from the new rules to avert a banking crisis? Is it to late already? Futures are sure happy tonight.

Just finished reading the news. While the measure is not a bad one, it will avert the NEXT banking crisis, but not the one we are currently in. Many governments are now in the same trouble that Lehman and Bear Stearns were in. Liquidity on that scale is difficult to come by during tough times.
But the VIX is showing divergence on the dailies. This last thrust to new highs did not take the VIX to new lows. The VIX should turn up tomorrow...that would be my guess based on Friday's close, but as we see the Futures are way up tonight. Still I suspect a volatile week and the trend to turn down for the market as a whole.
BPSPX:CPC was down friday separating the 20 ma and 50 ma more. The BPSPX itself is at an upper trendline.

09/09/10 update

2010-09-09T22:13:00.004-04:00

Slow Stochastics still overbought and look to be curling over. Volume has been tapering off.
Sharp bearish rising wedge looks to break soon on SPY.
The VIX closed at resistance/support while spending most of the day above it. With it not closing above support, this leaves tomorrow somewhat dubious on direction. The rising wedge could experience a false break out to the top, or we could have a failed e leg.
Intermediate term we are still down.

09/08/10 Update

2010-09-08T22:38:00.002-04:00

Daily Stochs are still oversold and todays candle was unable to make a new high.
CPCI:CPCE...it has had a fairly high success rate in the past...it is also flashing sell.
I did think today was a possible move up because of the excessive put buying yesterday (I mentioned it in the comments). These indicators are for intermediate term trading and not day trading. The VIX held support (the dotted blue line).
Nothing has changed in the BPSPX:CPC...still screaming sell.

09/07/10 Update

2010-09-07T22:17:00.004-04:00

SPY formed a bearish evenstar formation which is considered high reliability for a bearish turning point.
VIX formed a corresponding bullish eveningstar formation
VIX:VXV setting up for a launch yet again...
Finally...DING DING DING...BPSPX:CPC 20ma has crossed below the 50MA...the down turn is confirmed!

09/06/10 Update

2010-09-06T21:54:00.003-04:00

This should be about it on the count. It is possible that we are still tracing out Minor 2 as postulated by Daneric. I do not think that is the case especially based on the BPSPX:CPC.
We pierced the lower BB. VIX has not done that in quite a while. So unless we are actually in a new bull market, this situation will not last long.
The BPSPX:CPC 20ma is soon to cross the 50ma. A good size drop is around the corner. I accumulated Sept quarterlies on Friday along with some atm Sept puts.

hmmm

2010-09-03T08:27:00.002-04:00

What I noticed this morning but failed to notice last night is that the VIX is very close to a support/resistance line that I have drawn in tourquoise ages ago. Often times it bounces off that line instead of making a complete trip to the lower BB. A bounce near where we are at is soon due.

09/02/10 Update

2010-09-02T22:08:00.003-04:00

109.79 is the 62% retrace for minute (ii), it looks to be about over.
I am really looking at the VIX to bounce off the lower to mark the end of Minute (ii).
BPSPX:CPC says short! I bought a hunk of SPY sept put quarterlies today. Note that even though today was up a good amount...the BPSPX:CPC was down.

09/01/10 Update

2010-09-01T22:21:00.003-04:00

Today was a massive spike up. Basically a huge gap in the morning and it never looked back. That basically screwed up all the counts that are out there right now. Above is a relabel I did tonight. Now it is still possible that last nights count is still correct and we are ending a minuette (iv). How is that? Well it could be the ever elusive unicorn-like cousin of bigfoot expanding leading diagonal. Most forecasts have very high targets right now and have this as minute (ii) with at least a week of rise. I on the other hand think we only have as little as a day left potentially.
The close under the 20MA on the VIX leads me to believe we will have a trip to the lower BB before the upper one. How long that trip my last is still unknown. Time wise I am looking at 1-3 days.
BPSPX:CPC says stay short!. The massive spike up today was was not that large on this super sentiment indicator. Basically the MA's moved closer together today.

08/31/10 update

2010-08-31T20:53:00.003-04:00

Looks like we are in wave (v) of minute [i]. Looks ok so far, tomorrow or thursday will be a big day. With yesterdays set up I expected a deep gap down at open, basically a gap below resistance. It did not play out as planned but we had a bit of a "flash" drop before recovering.
VIX retreated a little, but nothing to warrant a trip to the lower BB.
VIX:VXV ready to launch again.
A close up on the BPSPX:CPC. Shorting is still a good bet based on this chart.

08/30/10 update

2010-08-30T21:17:00.004-04:00

The VIX daily bounced beautifully off the 20MA. It looks like it will push against the upper BB for a possible extended wave v.
VIX:VXV repositioned itself for launch again, moving above the red dotted line.
The BPSPX:CPC has curled over nicely on the 20MA. Everything is point to a move down over the next few weeks.

Short update as I don't have the use of my regular computer. Today was a little confusing as I thought we were in a B wave of minuette IV. But towards the end of the day the sell off started accelerating. Now its left till tomorrow to see what the true direction is. A gap down is not likely to be filled. Today's move down was on low volume, as we are in a down trend this signals continuation. Don't expect the move down to end until we have a high volume day.

08/27/10 Update

2010-08-27T21:28:00.004-04:00

Sunday 9:40pm update: the VIX:VXV reset back to launch position. Futures are currently up. Market might be up for 1-2 days, but I would not count on it. If it is up, it is an opportune time to short.

12:40am sunday update. Green going to cross red from the bottom soon...

Wow that wave series ended quick today right after 10. So right now we are about at the top of where wave (iv) should be. The only issue is the size of the waves. There is no way to hit the minute [i] target if wave (v) will equal wave (i). So we are potentially looking at a possible extension of wave (v).
The VIX retraced to the 20MA which is the perfect launch point for wave 5's. Timewise I would think there is a need for more time in wave(iv), but some alternate counts have wave (iv) starting where I have wave iii marked above.
BPSPX:CPC 20MA has definitely curled over. The time to Short is now :)

08/26/10 Update

2010-08-26T20:52:00.002-04:00

Subminuette iv shifted a little but today moved as expected. In fact the level that iv reached made more sense than what I had posted last night. I am only looking to around 103.5-103 as my target for (iii). Now if you are really staring hard, you might see an inverted head and shoulders formation with [4] as the left shoulder, [5] as the head and todays close as the right shoulder. If the inverted HS plays out...then iv becomes either a complex iv reaching higher or potentially its (iv) instead. Still looking for Minute[i]/minuette (v) to finish below 101.
Whats been interesting is that this whole move down from the top of minor 2 really has not move the VIX that much.
BPSPX:CPC is performing as expected signaling an early sell signal. The sell is not confirmed until the 20ma crossed the 50ma.

8/25/10 Update

2010-08-25T18:44:00.002-04:00

Ok, so the labeling of that submicro wave [2] was a bit ambitious last night. Today the wave played out and made it much easier to label. It looks like we completed a micro wave iv up. It fit perfectly in the channel and hide the right time lapse. So now we are looking for the final microwave 5 down to finish (iii).
VIX:VXV pullback a little today...but should rebound tomorrow.
VIX itself had a bearish engulfing candle form on the dailies. This signals more rise in the market. We will see how this play out with the count.
BPSPX:CPC has pulled back down again.

Looking good for shorts

2010-08-24T21:56:00.004-04:00

The above is how I see it playing out right now. The submicro waves in red and ending at wave iii in the short term. The ES is up afterhours but on the SPY count we could easily still be in submicrowave [2]. A little messy on my positioning...but I assure you that 5 will occur after 4 :)
VIX stayed high today. Looks like we will be expanding the BB here.
VIX:VXV crossed its moving average AND crossed the red dotted line which is a sell trigger line.
BPSPX:CPC has crossed nicely back under both the 20 and 50ma's. This should start curling the 20ma over. Again on the intermediate term this signals building a short position. My thought is that this will ultimately have a target of minute wave[i] under 100 on SPY. The BPSPX will then cross over positive for minute wave [ii] up.

Further out, I am potentially seeing Intermediate wave (1) down finishing before Christmas and then a huge rally up for wave (2) into next spring. Intermediate wave(1) should take us to below 666 on SPY.

Tomorrow we know for sure...

2010-08-23T21:31:00.002-04:00

Everything has been lining up...maybe too perfectly? We should be in the middle of wave (iii) down and if we are then tomorrow we should see a waterfall like drop. If not we could retrace up a bit to finish some potential complex wave (ii).
I would have liked the VIX to have retraced a bit lower today. This is what is giving me doubts in the extreme short term (tomorrow).
BPSPX:CPC was up SHARPLY. BPSPX was down but there was massive buying of calls in equities.

The massive drop in CPCE is usually seen at peaks not valleys in the market. This usually takes place because of irrational exuberance. So did everyone buy calls because it was easy money today? As it is a contrarian indicator, this would point to a drop in the market.

The week should finish down...

2010-08-22T20:18:00.003-04:00

The wave ii retrace should take us to somewhere between 108.17 and 109, before we start the descent for wave iii of (iii) down. We should be below 101 by mid September.
The dailies showed that SPY pierced the neckline but regained it by the end of day Friday.
BPSPX:CPC is still living below the 20ma, which means the 20ma is curling over down. The next week will be an excellent time to finish building out a large short position. On a time basis it probably should be done on monday. Wave i took about 2 days. Wave ii should end with in 1-3 days.
SPY and VIX were down. The VIX kiss off the 20ma should signal the start of wave iii down.
Here is the longer term SPY chart with the huge HS pattern shown.

I was going to right about the Hindenburg Omen this weekend, but of course life got in the way. Suffice it to say we had a confirmed second signal on Friday. A key point to note about the Omen is that a portion of market is making new highs while another portion of the market is making new lows. This is not just a few stocks but a significant portion in each direction. Basically the internals of the market are no longer moving together and this generally happens right before sharp down turns.

Hazy a few days followed by extreme downage...

2010-08-19T21:01:00.006-04:00

Tomorrow might be down a bit in the morning then up, or it might be just up tomorrow. Basically I am looking for a retrace potentially to the 109 area, but possibly higher if Daneric's expanded flat plays out. So we are either in the midst of (iii) down or about to be.
We bounced off the neckline of this head and shoulders formation. Potentially we could trace out a big more of a shoulder, but again it points downward after that. The HS target for $SPX is about 1000 and for SPY its about 100. This is a good target as Minor 1 wave down on SPY was about 101.
VIX touched the upper BB. It should pull back for a day or two before exploding out like it did at the end of April. The lower probability option is that the VIX just shoots up now.
BPSPX:CPC was up today even though it was a down market. On close examination we see that BPSPX stayed the same, so the put call ratio was down today. This hints at a positive day tomorrow. But todays value was still below the 20MA so it is bringing down the average. Time to short big on the next spike up in the market.

This weekend I will be looking at the Hindenburg Omen in greater detail along with the new version from this past weekend.

10:07pm update:

Looking through some charts and I ran across this one. The green lines are points where the VIX:VXV crossed its 50MA moving up. Sharp declines have generally followed. Looks like we hit it again today.

Ok so it got complicated...

2010-08-18T21:37:00.003-04:00

It could be a simple as the abc illustrated above or it could become something more complicated like a double zigzag. If you go back and look at the close on the above chart you will see that SPY dropped down to the 109.3 area right before the close, then the closed printed 109.79. Immediately after the close it traded down to the 109.2 area again. So the close managed to print right on the dotted blue trend line on the chart above. It is OPEX week after all...
VIX was trickier and ticked up even though the market was up. It bounced off the 20ma again.
BPSPX:CPC is probably the most interesting chart tonight. While the market was up, it was sharply down. This divergence leads me to believe that that the market will turn to the down side very soon.

Did wave 3 down start?

2010-08-17T21:32:00.003-04:00

Last night's post seems to have been spot on. We made it to just above the 50% retrace and not quite to the 62% fib before turning back. Now is this the beginning of a wave 3 down OR are we in some sort of b wave in a complex ABC up for minuette 2?
I had thought the wave 2 would end at the lower BB on the VIX, but the kiss off the 20ma on the VIX daily is also a good place to bounce.
Finally its this chart that leads me to believe that we have started a minuette wave 3 down. The market was definitely positive today but the BPSPX:CPC was down. That is a clear divergence and has caused the 20ma to flatten. There is a chance that we may turn up tomorrow for one final push, but the odds of that appear low. Even if there is a spike tomorrow, it will not last long. Now the trade using BPSPX:CPC isn't made until we see a tick down on the 20ma and its not really confirmed until the 20ma crosses the 50ma. But in this instance the EW count and state of the VIX gives us some hints.

That may have been the end of a wave 1

2010-08-16T20:57:00.002-04:00

It did not drop to the level I had noted in last nights post (106 area). The rebound today was too deep for me to think that we are in some sort of wave 5 still to a new low. So now I am looking for a retrace for a wave 2. The ideal retrace would be to the 62% area (110.86), but a 50% retrace or slightly less would be good enough for me to start building a short position.
Three days at the upper BB is enough...time to head for some vacationing at the lower BB.
BPSPX:CPC 20ma has flattened out a bit. The time to go short is getting closer.

Sunday update

2010-08-15T22:42:00.004-04:00

A little bear pennant formed on Friday. The target for the rising wedge is about 106, which looks like a good target for the bear pennant and the end of a wave 1 down.

The VIX can take another shot at piercing the upper BB. After that I suspect it to travel to the lower BB.
BPSPX:CPC is starting to curl as the dailies have been below the 20ma.

The you figure it out update...

2010-08-11T23:40:00.002-04:00

The wave 2 retrace did not make it to the 0.62 retrace level, but close enough. It looks like we have started minor 3 and are looking to finish minuette 1 of minute 1 looks to complete in the next couple of days. Then the retrace up for minuette 2 and a sharp drop for minuette 3 is shown above.
EW count above tries to predict the future. BPSPX:CPC was sharply down and we will see the 20ma curl over. Once it curls, its time to go short big.

VIX daily touched the upper BB. There is room for a little more wiggle up and then a trip back down for minuette2.

Some charts...

2010-08-04T19:56:00.002-04:00

BPSPX:CPC still moving up. Still waiting for this one to curl over before making a large short bet. Based on this chart there is plenty of time to wait, you are not going to miss the bus on this drop because its going to be a big one.
VIX daily is compressing. Again it can remain in this state quite a while before it explodes up.
Note the green verticals. I am looking for the daily to cross the 50ma on this one.
Now this is the reminder of the big picture. Thats the biggest HS pattern EVER...
Now a close up view of the hourly. We have multiple rising wedges on SPY. Still it can easily pop out to the top in the short term. But soon we are going to see a drop.

Still moving up...

2010-08-03T21:04:00.003-04:00

We have formed a rising wedge of sorts (noted by the dashed orange lines.) I expect another run to the top side of that wedge and potentially a false breakout over the top.
A move up will correspond with a tightening of the VIX BB as it moves down. Similar to the contraction we experience in April.
BPSPX:CPC is moving up as expected. I am waiting for the 20ma (green) to curl back over down, before going short. For now it looks like there is more upward movement to come.

Update

2010-08-01T21:37:00.003-04:00

We see that the BPSPX:CPC has crossed up. So for the short term we should be experiencing bullishness. Looking for 114-115 in the next week or two and then a MAJOR drop.
VIX opened at the 20dma and closed toward the lower BB. I am expecting a move to the lower BB and a tightening of the BB before a major move up and out of the range.

How low can we go?

2010-06-09T22:58:00.004-04:00

I am looking for the BPSPX to drop to or below the lower red dotted line above. I expect a new near term low below 104. How far below 104 is hard to tell, but sub 100 is not out of the question. But after that we should get a rebound that will last many weeks.
The VIX daily bounced off my torquoise resistance line from long ago. The VIX also formed a bullish hammer candle. We will see in 10.5 hours :)

Still expecting a new low before the rebound.

2010-06-08T21:37:00.004-04:00

Thanks to mindmeld.ws for making this awesome macbook air available to me to post blog entries :) My trading has been doing much better while I have not been blogging. As shown above the BPSPX:CPC crossed the 20MA moving up late last week. This is an early indication to get out of short positions.
The VIX daily has retraced to the 20ma. I really expect a move up and a new low before the VIX decides to make a trip to the lower BB.

The green area is my target area before the rebound. Off to download the developers kit for the iphone now!

Time for a rebound on the next day or two

2010-06-06T22:27:00.002-04:00

Bpspx:cpc crossed over on Thursday, hence the current run down is nearing it's end. I expect the market to retrace 50-62% from the sub 104 low it will make soon to the peak.

Update

2010-05-24T23:07:00.000-04:00

Will post a few charts in the morning, but everything is still pointing down.

Up then down...

2010-05-17T17:05:00.005-04:00

Vix inverted hammer and spy hammer lead me to believe that there will be a rebound tomorrow that will carry into Wednesday befor we continue down.

The green dot is the 62% retrace, note how that is basically where the gap down started. That is my target for the retrace.

Charts

2010-05-17T10:17:00.003-04:00

BPSPX:CPC is confirmed sell...

CPCI:CPCE says to sell in intermediate term...

and finally...pressing publish would probably help with posting :-P

Still down in intermediate term...

2010-05-16T22:13:00.002-04:00

I will post charts in the morning. BPSPX:CPC is still confirming the downtrend. I will post immediatly when the indicator says to get out.

Still headed down...

2010-05-10T22:42:00.004-04:00

The Indices are a little screwy after the trading on Friday. But the VIX retraced 62% from the 4/12 low to the high on Friday. Normally I am looking for a bounced off the 20ma, but a bounce in the VIX right now would not be surprising.BPSPX:CPC has sharply curled over and the 20ma is about to cross the 50 to confirm the downward trend. I got out of my puts on Thursday for a nice gain and totally missed the Friday drop off. I did purchase a few calls on Friday and exited them this morning. I also purchase some may puts at the 114 strike today. Basically I am looking for a wave 3 down in the next 2-3 days.

Here is one we haven't looked at in a long time. It is the CPCI:CPCE. The 30ma crossing the 50ma down has always been a good indicator of an intermediate downturn.

Back for the trip down :-P

2010-05-02T22:54:00.005-04:00

Everyone is looking at the Head and Shoulders pattern that has formed on the hourlies. It is fairly clear and would support the 1-2 count I have posted. However both the stochs and the rsi say that the market is currently oversold. Could that have been the P2 peak marked above? We will find out this week...maybe even tomorrow.

The stochs has spent 3 of the last 4 days outside the BB area. Still the VIX is in a downward trend. A move above 30 will be a big fat warning sign of things to come.
BPSPX:CPC has curled over and has even touched the 50ma. Looks like a good time to short.
Bonds look like they have formed a clear ABC. Of course C could technically be a little higher.

For now the market should be down for the intermediate term...after all its sell in MAY and go away :)

BPSPX:CPC

2010-04-19T22:03:00.002-04:00

The blue line is placed when the derivative of the moving average moves from positive to 0. In other words, the moving average is curling over. For the 20 ma to curl over the BPSPX:CPC must move below the 20ma. Which it has done today. It looks like sometime tomorrow will be a good short.

Hmmm...

2010-03-28T22:25:00.004-04:00

MACD on the VIX has crossed over positive. I think it will take a short trip to the upper BB, then maybe back to the the 20ma and then a spike up like late in January.
Waiting for the BPSPX:CPC 20ma to curl back over. This next curl over and cross should be the beginning of P3, timewise this could take anywhere from weeks to months...

Still looking for a pullback in the next day or so. Intermediate term looking at 122, long term looking for a major drop.

Still getting over the flu, will have time for a big update tomorrow as I will be sitting in a hotel room with plenty of free time...

Still looking for a bit of a pull back before final highs...

2010-03-21T20:40:00.004-04:00

VIX bounced off the lower BB on the dailies. Look for a move in the VIX to the 20ma.
The BPSPX:CPC 20 ma has now crossed the 50ma moving up. Nothing to do now but wait for it to curl over. We see that the divergence earlier between the SPX and BPSPX has worked itself out.
Sitting here with a 101 fever, so I am not going to do too much more tonight. Just that there needs to be a fairly sharp pullback soon.

1228 SPX?

2010-03-17T22:22:00.006-04:00

We are between the 50% and 62% retrace on the SPX, not a very satisfactory place to turn around for P2. Its starting to look convincing that we may make it up to the 1228 level on the SPX.
The negative divergence with the BPSPX is starting straighten itself out. BPSPX:CPC is looking to have the 20 cross the 50 moving up. Typically this usually points to a couple of weeks net positive.
VIX touched the lower BB, at least for the very short term I expect a bounce to the 20ma. So for the very short term it looks like a pull back is coming. For the intermediate term it looks like P2 might not be over. Clearly we are still in P2, the question now is how long will it last.

I will take a look at China for redvettes :) But not until tomorrow night.

Just a little more up...

2010-03-14T22:42:00.002-04:00

VIX is hanging out at resistance right now. Maybe a small bounce up before a turn.
Negative divergence occurring in the BPSPX and SPX. I expect a little more up and then a reverse from there.
Will try to give a very detailed post on Wednesday as life is getting in the way again...

Looks like my purchase will be for the short term...

2010-03-09T21:27:00.005-05:00

The extremely sharp rise in the past month has been on ever decreasing volume. My purchase today is likely to be much shorter term than I anticipated. The SPY Daily is exhibiting a "shooting" star like formation. I am looking for a pullback tomorrow and into Thursday.
VIX painted two black candles in a row. So the VIX is technically up today as well as the market. This is interesting and you can see some of it in the CPCI:CPCE chart later on. VIX has been far from the 20ma for quite some time now. It needs to revert back to its mean.
BPSPX:CPC warned us early that this rally might happen. I was hoping for a good pull back to get out but that did not happen.
There has been massive call buying in equities. The market has been going up for 1 month now. We see that the CPCE has dropped sharply indicating massive call buying relative to puts. Everyone is buying calls with the market being up for a month? I think this is the time for a sharp drop to make those calls worthless.

Admittedly, we will have to wait for the BPSPX:CPC 20ma to cross the 50ma going up and then coming back down before we can make a big commitment.

Buying puts in th AM

2010-03-08T23:36:00.002-05:00

Life gets in the way of updates. It's been an incredibly hectic weekend. Anyway the title says it all. I will post a bog update tomorrow night with charts.

Still hanging out in the resistance band...

2010-03-04T23:33:00.004-05:00

So are we consolidating for a move up? or have we run out of gas and are slowing rolling over?
BPSPX:CPC is down sharply even though the market was up. We see that the BPSPX component was up, which means CPC was up sharply. Someone is getting nervous purchasing puts.

Ok...we reached the target...

2010-03-02T21:57:00.004-05:00

We hit the target I had mentioned in an earlier post. We have reached the green resistance area.
Vix painted a hollow red candle which looks vaguely "three riverish". I would expect the VIX to turn now and the market to reverse.

Still floating around...

2010-02-28T22:25:00.005-05:00

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.

Big reversal...where did that come from?

2010-02-25T20:39:00.005-05:00

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.

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

2010-02-24T23:13:00.004-05:00

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.

One more little run up to resistance,,,

2010-02-22T22:27:00.005-05:00

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.

Say it isn't so...

2010-02-21T20:58:00.006-05:00

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.

Ok...now 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.

Fed marks the start of Minute [iii]

2010-02-18T23:14:00.003-05:00

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.

Thats probably about it...

2010-02-17T23:53:00.004-05:00

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...

2010-02-17T00:17:00.004-05:00

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.

2010-02-14T22:16:00.002-05:00

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.

Moment of truth tomorrow...

2010-02-10T21:18:00.003-05:00

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.

Quick update

2010-02-09T23:34:00.004-05:00

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.

ABC correction under way

2010-02-08T22:46:00.006-05:00

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.

Looks up...again?

2010-02-07T23:24:00.004-05:00

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

Totally unexpected...now where are we?

2010-02-05T00:04:00.007-05:00

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.

Finally Minute [ii]...

2010-02-02T21:43:00.005-05:00

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.

Still waiting...

2010-01-31T21:14:00.004-05:00

Looks like (v) still has a little bit more to go before [i] is finished. I am looking for it to fill the gap (down to 106.9) before the bounce for minute [ii].
Vix still looks bull flaggy.
BPSPX:CPC looks to cross soon to confirm the intermediate turn.

Looking for a little move down to finish [i] before the bounce for [ii].

Ouch...today's move was unexpected...

2010-01-28T20:22:00.004-05:00

It looks like we were still in wave (iv) yesterday. Today might been the end of wave (v) with the new low, but we could easily be in an ending diagonal wave (v) that would call for new marginal lows.
Its getting harder to move away from the 20ma. We should start moving in that direction tomorrow and into monday.
Still looking good, the BPSPX:CPC will not cross until we are in minute [iii] down.

So essentially there could be another marginal low coming, but then we will get the sharp bounce for wave [ii].

The bounce is underway...

2010-01-27T21:50:00.006-05:00

I am looking for a bounce into the gray rectangle marked. An ideal target would be the green circle marked. Its the intersection of the 62% retrace and a trendline support.
I posted the chart last night showing that it would bounce on the tourquoise trendline. Well what do you know :)
VIX should move back to the center of the BB (20ma) before bouncing back up.
BPSPX:CPC is looking good. The 20ma should cross the 50ma with in the next 5-10 trading days.

[i] about finished...waiting on [ii]

2010-01-26T23:02:00.007-05:00

The final move for wave [i] should occur tomorrow. I suspect that it will finish in an ending diagonal followed by a sharp move up for wave [ii]. The green dot in the TOS chart above is on the tourquoise line of the Stock Chart below.
The above chart I posted a while back and is basically trendline supports where I expect the market would bounce at.
VIX painted a bull flag, so I suspect a little bit of up tomorrow on it. This would mean a little down in the market.
The above is a longer term view of the BPSPX:CPC, note how accurate it was during the bear market. Remember that it is not a short term indicator, but rather an intermediate/long term indicator. In essence its a sentiment indicator using the ratio of the bullish percent index to the put call ratio. So when we see the confirmed sell signal, it does not mean that the next day will be up, it means weeks/months later you will have done well if you had sold/shorted.

Rebound before we see some real action...

2010-01-24T21:47:00.005-05:00

SPY rebounded at a lower trendline support. I was early on the rebound call missing out on the bulk of the drop on Friday. Currently looking for a rebound up to the 62% retrace (may only go as high as 50%...or we might see bullishness come back and push it up to 78%)
The VIX move was very unexpected on Friday, which was essentially a 4 sigma move it looks like. The VIX will retrace in side the BB on monday.
The early sell signal has been given by the BPSPX:CPC as the 20ma has turned down. A cross of the 50ma will confirm.

So essentially, I am looking for the wave [ii] retrace next week lasting 1-3 days. After which I am looking for minute wave [iii] down.

Wave (iii) down...but which wave (iii) :-P

2010-01-21T22:56:00.005-05:00

The above is my count based on the squiggles. It is signficantly more bearish than competing counts. I am looking for a low around 111.3. Now if it goes significantly below that, then I expect that will be the end of (iii). If it rebounds in that area I suspect it will retrace to around the 50-62% area(where ii is marked) and then we will see iii of (iii).
The VIX made a huge move today. It crossed the upper BB and finished above it. The day following a BB puncture, is usually a move back into the BB. This is why I am leaning towards a retrace up as shown by my wave ii, be warned as the move up can also be wave iv of (iii).

BPSPX:CPC 20 ma has started to curve down this is the "early warning" to sell. Confirmation does not happen until the 20 crosses the 50ma.

Tomorrow I expect bit of a retrace up.

Repeat...

2010-01-20T21:31:00.005-05:00

Basically its a repeat of the Sunday forecast. Looking for SPY to reach the 62%-78% area (114.31-114.67) and then a downturn from there.
VIX painted another shooting star. SPY should move up at least in the morning, maybe into Friday also. Then I expect a selloff.
BPSPX:CPC 's 20ma looks to be flattening out. I would not expect a cross of the 50ma until the first Minute 3 down.

iPhone update

2010-01-20T00:15:00.002-05:00

Spy retraced much higher than expected, ruling out that P2 finished last week. While spy did not make a new high, the SPX did. Vix is diverging and not making new lows. Expect a sharp pullback in the next day or two.

A look ahead...

2010-01-17T17:08:00.009-05:00

The above chart assumes that P2 is over and we have started P3. The drop on Friday looked very impulsive. We either finished a wave 1 down or are about to finish it. The red line above assumes that wave 1 is finished and shows about where the wave 2 retrace will head before continuing down for a wave 3. The blue line assumes there is a little more down in wave 1.
The above chart shows various trendline supports. The red lines represent a bearish falling wedge. SPY finished just on the trendline leading me to believe that wave 1 is over and that we will travel to the middle of the wedge before collapsing out of the bottom in a wave 3.
The VIX looks vary odd having painted multiple shooting stars outside the falling wedge. At this point the VIX's next major move appears to be to the upside.

Still waiting for BPSPX:CPC 20ma to cross the 50 before I get too happy.
The VIX:VXN made an all-time low this week.

Basically looking at a move up in the near future to some point around 114.5-114.8 before a sharp drop down to the 111's.

Bonus Chart:
Nice shooting star on the Monthlies and the monthly stochs are extremely overbought.

New high by 0.01 on SPY

2010-01-14T22:10:00.006-05:00

Well that wave 1 down turned out not to be. SPY made a new high today by 0.01. SPX made a new high though the /ESH0 did not. So we again must wait to see if this is the top or will it extend higher yet again. A turn now will be a double top.
The hourly chart is showing negative divergence in the stochs.
The VIX daily has diverged a bit as we have made a new high in SPY, but did not make a new low on the VIX.
The BPSPX:CPC has not given a sell indication yet. Its been the most reliable indicator through this downturn and correction. Still holding a small position in FEB Puts.

Its interesting that INTC's good numbers have not had a larger effect on futures in AH.

Did P3 start?

2010-01-13T23:02:00.005-05:00

We did not stray to far from the 62% level, SPY peaked out above the 78% retrace before sliding back slightly. Wave 1 was a leading diagonal down with wave 2 having a deep retrace. The target for wave 3 is the 111.75 area or lower. For this to happen SPY must collapse tomorrow, in fact a gap down and further selloff would be do it.
VIX is still playing outside the wedge, but within the BB. The next 1-2 days should send it back into the wedge and above.
Just looking at the BPSPX its interesting that while the market was up, it was down. A bit of a negative divergence.

In conclusion, I am looking at a sub 112 target in the next few days. That is unless we open tomorrow above high of today.

iPhone update

2010-01-12T23:21:00.003-05:00

Spent the entire night figuring out someone elses database and am just getting in. Basically I can squeeze in five waves down from the top. So if that structure was a leading diagonal wave 1 down, then the 62% retrace would be to the 114.5 area. If I can get up early enough in the morning I will post a chart. An argument can be made that the waves down were corrective. If that's the case then a marginal new high is possible. This brings us to one of the key issues with EW, you don't really know where you are at early on in a transition between higher order waves. Are we finishing P2? or Have we already started P3?

For now I believe we will get a continued bounce up in the morning and if we don't go too far above 114.5, then we will see a sharp wave 3 sell off tommorrow late or Thursday. If we do make a new high... Then that's all she wrote and it's all down hill from there.

Wow

2010-01-11T21:52:00.005-05:00

The ramp up in futures was rather spectacular this morning with a large gap up in the morning, followed by weakness throughout the day. A possible 1-2 formation formed, but its still too early to tell if this is the top. Ok, not really the VIX spiked out of the bottom of the BB.
The VIX closed outside the bottom of the BB. I fully expected today for the VIX to retrace back into the wedge, but the ramp up in stocks was far greater than I expected. Can you believe the VIX is the in the TEENS? No need to hedge your longs...this market is going up forever! :-P

I am underwater in my small put position of feb 112 on SPY. But tomorrow I will be increasing that position. Again I will not take a larger position till I get a signal from the BPSPX:CPC combined with at least 5 waves down from the top.

Further evidence that we might have turned:
A bit of a head and shoulders pattern has formed in bonds. The head seems to have formed and the right shoulders is forming on declining volume.