Tuesday, July 07, 2009

Leaning over a ledge

Here is our trusty SPX weekly bar chart, embedded with Blue Wave's Trend Model, Precision MA, Advanced GET's Elliott Wave Count, and BW's Precision CCI:


Note how prices closed today just barely short of triggering the Sell stop indicated on the chart. Also, the CCI is just now creeping into Sell territory.

Below, let's add the False Bar Stochastic, which is already in Sell mode:



The Red Circle on the BW Moving Average, now in about it's third weekly bar, appears at the point in the MA where it has turned from Up to Down. The Light Blue Circle, appearing in mid-March, designated the move from Down to Up. Note how both those circles were tradable in past weeks.

What else happened about three weeks ago?




Yep, Market Club's Weekly Triangles issued a Sell Signal.

Add all of this together and you can see why about three months ago I wrote here that my intent was to get SHORT well before the Weekly Blue Wave Signal was triggered. With that signal imminent, needless to say that all of the above tools have helped to enter the market on the short side well before the formal and now almost anti-climatic, Blue Wave Weekly Sell Signal.

What comes next?

A quick shopping trip to Trader Joe's, then back here to read your Comments and catch up on my Blogosphere reading.


A

3 comments:

Mike said...

Allan,

a question about the Elliott waves...

from what I see...^SPX had about a 40% gain from it's low in mid-March.

and as you've demonstrated we're on the ledge of another downturn.

Here's my question...

when down leg completes and signal again goes "blue" for the ^SPX...does your Elliott Wave analysis tell you what type of intensity the rally will be?

will it be greater or less than the +40% we just experienced?

Or is this still debatable?

BTW...thanks for all the insight.

Definately helps to know when to be in or out of equities in general.

-Mike

Michael Lomker said...

BWT doesn't really answer that question. Hard rallies happen at the end of wave 5's when the market is very overbought or oversold.

If you are a buy and hold investor then I doubt you'll want to own anything until after the Sept/Oct period where crashes usually occur.

Have you considered doing market timing? If you are willing to go long/short with ETFs then you could take a look at my favorite cycles newsletter. I've been watching him for 6 months and it's more long-term than I am but might be a great choice for someone timing their retirement.

http://www.cyclesman.info/

Anonymous said...

Michael,
Thanks so much for the great recommendation to Cyclesman web site.
His latest interview with John Grant is excellent!

Doug in ATL