I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Thursday, June 30, 2011

June 30

Current thoughts. I will be back the middle of next week.

Wednesday, June 29, 2011

June 29

Current thoughts:

Tuesday, June 28, 2011

June 28

Looks like the Nasdaq was telling the truth. Friday really does now seem like an intense misdirection day, and we have a bottom forming.

Current thoughts on how it could play out:

Monday, June 27, 2011

June 27

Today is the day that we should have had Friday. I am still unsure as to whether we have a tradeable bottom here, or whether it is more likely that we are entering a consolidation range.

For the bottom call, we have COMPQ and RUT leading the move back up. For the consolidation call we have the last two weekly candles on the SPX and the sluggish reaction still on the SPX. Also today was an early up day that has finished in weakness, which has not been a bullish pattern for the next day recently.

As of right now, I am still leaning toward the consolidation call.

Friday, June 24, 2011


Like I showed in today's post June 24, we have a possible triangle setup / very sideways correction.

The last 2 weekly candles show absolutely no net progress. I am struck by the feeling of the price action now to that of Silly Season 2009. That also made no net progress for several weeks with lots of gaps up and gaps down with tons of reversals and no follow through. It was also a prolonged sideways triangle.

June 24

Today should have been an up day. There was absolutely no follow through based on yesterday's move. That is concerning. We have been gapping up and down in the same range for the last two weeks. But each time my cycle indicator starts to bottom or top we get a reversal without follow though.

So here is another idea that I am watching and based on today's lack of follow through I am seriously considering. This is what ZimZeb and I were talking about yesterday. Something like a triangle for the next couple of weeks.

This wave is not done. It has not taken up enough time. But I am starting to think it may just correct sideways in time. Just keep your eye out of this. If early next week we have another breakdown and a sharp reversal at support, then this becomes much more likely.

Thursday, June 23, 2011

June 23

Another strong bounce off the 200 day SMA. Huge reversal candle on all the indices. Markets closed on a strongly positive short term trend. The COMPQ and RUT not only closed positive for the day, but the COMPQ has almost made a higher high. I still maintain (like I did yesterday) that the pullback was a buying opportunity. I think this market wants to retest 1315-1330 before turning back down.

Wednesday, June 22, 2011

June 22

Current thoughts. Was anticipating this pullback based on yesterday's count. I think this will prove to be a dip that you want to buy for a swing trade. I think we have a couple more weeks of this uptrend.

Tuesday, June 21, 2011

June 21

Have been calling for a bottom for the past several days and today we finally got proof of a turn. The SPX broke the 1293 barrier and basically closed at it. My 60 minute cycle indicator which bottomed and went into divergence last week like I mentioned before is now firmly on an uptrend.

My expectation is that this is either a Minute or possible Minor X wave up (I have convinced myself that this is likely not a Minuette degree move). I think it will find trouble around 1315-1330. I don't expect it to make a higher high. This should last a couple of weeks followed by a Y wave down which will make new lows below 1258.

Here is my daily chart with the likely pullback area that I am thinking about. Sqwii suggested a very nice simple trend following system with the EMA 3 and SMA 10 that is very useful. Combined with the daily MACD to cut down on the false positives this is quite useful. The trend follower and MACD are both positive at the close, confirming the uptrend call.


Like I was discussing with Sqwii in the comments below, I played around with his simple swing trade system a little. I like the EMA5/SMA15. It has less whipsaws and lets the longer moves run. You trade a little bit on the entries for a slightly less volatile signal. Anyways I like the system for swing trading and think it is worth sharing.

Monday, June 20, 2011

June 20

Nothing to update. I still think we are at a Minute (maybe Minuette) degree bottom. But today gave us no clue. We had a Friday-esque day (move up in morning then overlapping down for the rest of the day). We are still in the middle of the critical range of 1293-1258 on the SPX. Won't know anything until we break out either way.

Friday, June 17, 2011

June 17

Not much to update. Had a moderate gap up, weakness all day long until the gap closed. It was a day the purposefully went nowhere. I think Blankfiend is right, I don't think we will get anything decisive until the Greek confidence vote.

Thursday, June 16, 2011

June 16

Man, this market certainly does keep you on your toes :)

So, here's the deal. This is the last variation I will post on this count. If it goes any lower on this wave then something far more complicated and bearish is happening.

As it stands we got a down move that:
1) Looks remarkably wedge shaped (reversal)
2) A sharp bounce right off the 200 day MA
3) 60 minute cycle indicator still has not made a lower low
4) Nearly every 60 minute indicator I have is in extreme divergence
5) We had a move that rallied all the way into the close (which hasn't happened in weeks)

It's time for the market to show it's cards. It either rallies hard tomorrow and we have a bottom in place that should last a couple of weeks. If it doesn't then next week will be a *very* bearish week.

Assuming that this is a bottom, here is the retrace zone that I like:

Wednesday, June 15, 2011

June 15

From yesterday's post I said the bottom signal from my 60 minute chart ... will be confirmed if we trade above 129.80 before trading below 127.80 on the SPY

That obviously didn't happen and we made a lower low today. But as an interesting point, it got much closer to the 1x time, 1.62 price target. And my 60 minute cycle indicator turned down but did not yet make a lower low.

So we are at an interesting juncture. I still tend to think we have a low occurring here, but that would need to be confirmed by up days on Thursday and Friday. If that doesn't happen, then I really start doubting this count.

Tuesday, June 14, 2011

June 14

Bounce up today was not at all unexpected. My cycle indicator on my 60 minute chart has now definitively turned up (which furthers my expectation of a multi-week bounce). This will be confirmed if we trade above 129.80 before trading below 127.80 on the SPY.

Monday, June 13, 2011

June 13

As I said Friday, assuming my count is correct then we are reaching a zone were we should expect a bottom for this Minute (or maybe Minuette) degree wave. Today we came down to the 1.618 price extension ratio at nearly the 0.786 time ratio. The divergences on Friday got even more pronounced today.

I tend think that we are at (or at least very near) a pivot for a multi-week reversal.

Saturday, June 11, 2011

Update on Long Term Projection

Here is an update on my long term projection. It hasn't changed in the last several months, so there will be no new long term analysis in this post. Just some chart updates and references to my previous work so you can follow why I arrived at this projection.

-- Nov 2010: Abandoned the Primary 2 count and adapted my leading alternate count which was a Cycle X count - The Large Count

-- Jan 2011: Rethought the size of Cycle X with some historical analysis and comparisons. I lay out my thoughts for March 2009 - June 2011 (projection at the time) being only Primary W of Cycle X - The Large Count with Historical Perspective

-- Jan 2011: Macro thoughts that accompany my projection - Macro Thoughts and Observations. Is the Bear Market Dead? Is this the Start of a new Secular Bull Market?

-- Feb 2011: Long term context - Secular Bear Market Projection in Historical Context

-- Mar 2011: An in depth study and a comprehensive list of references and analysis of previous work. I highly recommend reading this post and following the references - First Derivative of the S&P 500, Long Term Study

-- May 2011: Count of the large structure being completed in real time - May 5 (and a Long Term View Update)

Rally from July 2010 - May 2011. It is corrective, not impulsive

Last two Primary Waves and upcoming Primary Wave projection

Update on the BPSPX with regard to the last two cyclical bull and bear markets, and the current cyclical bull market (The BPSPX and the Secular Bear Count)

Secular Bear Market Projection

Friday, June 10, 2011

June 10

Assuming my count is right (that I have correctly identified Minute [maybe Minuette] W), then we are near the bottoming range for Y. We have some good proportions taking place on substantial divergence on the 30 and 60 minute charts.

Thursday, June 9, 2011

June 9

Current thoughts:

Monday, June 6, 2011

June 6

No opinion on the short term count, other than the fact that it is corrective (and not some sort of half-baked leading diagonal with a < 50% retracement). The trend is down and I am waiting for the next bounce to try to put the waves in context.

Thursday, June 2, 2011

June 2

Current thoughts. What a mess.

Wednesday, June 1, 2011

June 1

Current thoughts. Honestly, I really have no idea what the short term count is. The strength of this down move was a surprise. You can see from yesterday's chart, I was expecting a pullback, but not this severe.

However, it looks very bad on the SPX and Financials (XLF), but the COMPQ and RUT seem to be holding well above last weeks support level.