Analysis & Charts 12/08

s&p 500 daily chart

The jobs report was better than expected, as 228,000 new jobs were created in November.

The December Consumer Sentiment came in at 96.8, lower than the 99.0 expectation and the previous 98.5 number.

As better seen on the S&P 500 hourly chart, after completing a five wave structure from the November low, the market is now either working on an a-b-c corrective pattern or an Impulse (1-2-3-4-5), with the b or 2 part just reached it’s key 61.8% Fib. retracement level. But Friday’s close near it’s high indicates some more upside action, (at least intra-day) possibly in the form of a test of channel resistance up around 2663.

Anyway, as long as the December high stays intact, a wave c or 3 to the downside could be the next event starting next week.

Any break of the Dec. high would signal unfinished business to the upside, probably in the form of an Expanded Flat scenario or a last wave 5 underway, as part of a not yet completed five wave structre from the August low. The wave 3 and c are the sharpest waves in the Elliott Wave Theory (in whatever degree) and can give quick positive returns if they are correctly identified.

A natural first target would be daily channel support, if the minor trendline around 2630 fails to hold. If an a-b-c pattern is completing at this channel support, then a Santa Claus rally could lift the market to new highs.

A downside breakout (daily closing basis) from the channel, on the other hand, could mean a more significant peak was in place at the recent Dec.  high, which would give support to the Impulse scenario instead.

The a and b of an a-b-c pattern is often equal in price length, so any more weakness than this would start to smell of a wave 3 underway.

From a Volatility – VIX daily point of view, investor fear is likely heading higher within the first half of next week. It’s once again about to test a strong support area and it’s RSI-2 reading is also at an oversold extreme.

The S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is Short on the S&P 100 weekly

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I’ve updated monthly charts, with brief comments available for most markets and some popular stocks.

November was a positive trading month, with the S&P 500 monthly reaching the major trendline convergence resistance area mentioned in the previous long term update.

Also, the market broke through the earlier discussed +2/8th MML resistance at 2625, so the long term Bull is still alive and kicking it seems. At least it should hold up throughout the holiday shopping season, at a minimum.

When the December trading month and 2017 is finished, i’ll come back and share with you a possible time target for the stock market Bull… an important long term Gann Angle cycle convergence i’ve discovered. This one could have the power to force a reversal in the market tide in 2018, in case the overall advance continues into the time window i’ll reveal then.

Short term, the tech market Nasdaq Comp. daily sold off sharply from channel resistance early in the week, while the S&P’s took the other route, made a brief pullback only, before blasting through daily triangle resistance and instead targeted channel resistance, found roughly 30 points higher.

This also negated the earlier discussed Ending Diagonal scenario in the  S&P 500 hourly time frame.

The Neural Nets is still staying Short, while OEX weekly momentum just barely entered bullish mode after this week, with the OEX closing up against weekly channel resistance.

For the next trading week, as long as the S&P 500 daily trades within the channel, the positive trend from the August low is viewed as intact.



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