Charts & Commentary 01/27

S&P 500 daily chart

The market broke out from the long standing consolidation to the upside and reached the 2300 target (channel resistance area). And with it, a three wave pattern from the Nov. 2016 low could be in it’s last stages, if not already ended.

OEX weekly momentum is also warning about a topping phase, as a bearish divergence is observed with price at the same time reached upper wedge resistance area.

A technical drawback for the bears though, VIX daily closed below major horizontal support, which could open up for even lower Volatility and push the stock market even higher.

So a more conservative indication of a short & mid term top in place, would be to wait for weekly momentum to enter bearish mode again.

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

The Neural Net System is Short on the OEX weekly

Dow 30 | Dow Transport | OEX | Nasdaq | VIX daily | Monthly Charts
NYSE A/D line | Put/Call Ratio | McClellan 21 EMA | Carlucci (?)
NYSE Summation Trend: Daily | Weekly | Monthly | Sentiment
Free Elliott Wave Tutorial

01/20

The market situation is unchanged since the previous update, with the consolidation phase still active. I’ve re-drawn the lower trendline on the S&P 500 daily and hourly chart, starting from the Dec. low instead of the Nov. low. This because the market found support on this adjusted trendline at Thurday’s low.

This also explains why prices continued sideways this week, despite the earlier breakout from the Nov. trendline.

So still waiting for a clear directional breakout from this adjusted Triangle pattern, either to the upside or downside. With this in mind, the Daily NYSE Summation Index trend indicator entered bearish mode this week.

Also the Neural Nets turned bearish on the OEX Weekly. But the NN tend to generate more whipsaw signals in a flat market environment like this, so i’m not putting much weight on the NN signals these days.

01/13

As this S&P 500 hourly chart shows, prices broke out from the Rising Wedge pattern and fell back for a test of the trendline support mentioned in the previous update, before heading higher again.

On the daily chart, prices are very close to the Apex of a Triangle looking pattern, with VIX daily still resting at major support. Any upside breakout should lead to a test of  the trendline resistance (2,300 area) at a minimum.

A downside breakout, on the other hand, would likely lead to a test of first Fib. support (2,210 area), as a minimum downside potential.

The Dow 30 has been trading sideways since early December, stuck within a tight and flat channel pattern. Here too, the directional breakout from it, would likely set the short term tone.

Both the Daily and Weekly NYSE Summation index trend indicators are still in a firm bullish mode, although their current readings are significantly weaker compared to the early Fall 2016 market peak (bearish divergence).

The S&P 100 BPI (Bullish Percent Index) daily Sentiment chart shows a still intact trendline resistance.

The Neural Net System is Long on the OEX weekly

Dow 30 | Dow Transport | OEX | Nasdaq | VIX daily | Monthly Charts
NYSE A/D line | Put/Call Ratio | McClellan 21 EMA | Carlucci (?)
NYSE Summation Trend: Daily | Weekly | Monthly | Sentiment
Free Elliott Wave Tutorial

 

01/06

Prices pushed higher to new highs Friday, in what could be an Ending Diagonal (Rising Wedge) wave v of c in it’s last stages. As better seen on this S&P 500 hourly chart, any downside breakout from this wedge and a break of trendline support, (2,250 area) would increase the odds of a near term top in place. If so, minimum downside target would be first Fib support down around 2,205.

A near term top scenario is supported by i.e. VIX daily once again resting at major horizontal support. The higher Volatility (fear) outlook, with an overbought RSI-2 at the same time forming a bearish divergence, compared to the Dec. peak in the S&P 500, could mean weakness coming next week.

In addition, a still bearish OEX weekly momentum just barely reacted to this week’s (low volume) advance in prices, which tested larger weekly wedge resistance (the high for the week). So this could mean even a mid term top is forming, with weekly wedge support as a likely target, once a top is confirmed in place.

This bearish view is backed up by Sentiment now reached tremendous trendline resistance.

 

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