Saturday, August 29, 2009

Triggers to nastiness

Things are getting pretty interesting again, due to a host of factors that seem to be converging and alerting us to some imminent changes. Both Glenn Neely and Robert Prechter are suggesting the move up from March has just about reached it's most likely conclusion, reaching or close to reaching ideal targets in terms of price (Prechter & Neely) and time (Neely). In addition, Arch Crawford wrote in his August newsletter that, "September is a truly ugly month right from the start - Overwhelming negative aspect count."

Let's walk through my most salient charts and analysis to see if we can't identify any triggers to nastiness, so as to be ready when Ms. Market yells, "Pull."

SPX- Monthly

On the Monthly chart, with one day left in August, 1029.80 still prevents the ATR system from flipping positive. Blue Wave is four months into it's Buy Signal and won't flip Short until the 830's.

SPX - Weekly

On the Weekly analysis, we still see a triple divergence on the False Bar Stochastic as well as a stubborn wave count and pattern from Advanced GET warning of new lows to come. I've drawn a trend line that is walking up with price and is sitting right now at about 963, almost exactly where both Blue Wave and ATR will flip Short. Take note.

SPX - Daily

A close up Daily chart further clarifies and provides new REVERSAL levels, basis Daily closing prices:

Blue Wave Daily flips SHORT @ 1010.87

ATR Daily flips SHORT @ 1000.71


SPX - 90 minute

The 90 minute chart shows an Elliott Oscillator on the bottom, highlighting a significant divergence between the oscillator and the recent new high in the SPX. Note also that while Blue Wave is still on a Buy on this chart, that ATR (solid navy line) is Short. Blue Wave triggers SHORT at 1023.04 and ATR triggers LONG at 1031.93, all basis 90-minute bars.

SPX - 30 minute

The 30 minute chart above shifts near-term focus to some tighter levels. Here, ATR is already on a SELL, requiring a 30 minute close above 1031.67 to flip Long. Blue Wave is again LONG here, requiring a 30 minute close below 1025.56 to join the ATR being SHORT.

In summary, the SPX closed Friday at 1028.93. Our trend-following systems are mixed, reflecting indecision, distribution or accumulation, take your pick. A thirty-minute bar that closes above 1031.67 or below 1025.56 will be the first indication that both systems are in agreement on near term price direction.

More significantly, if Prechter, Neely and Crawford are correct on intermediate direction turning hard down, then these charts provide a series of price thresholds that will confirm that trend, our triggers to nastiness:

30 minute @ 1025.56
90 minute @ 1023.04
Daily @ 1010.87 (BW)
Daily @ 1000.71 (ATR)

Weekly @ 963.00
Monthly @ 830.00



Anonymous said...

Holding my breath for Monday.

Your analysis is brilliant, as usual.

Anonymous said...

Where are the panic buy signals?

Anonymous said...

I figure the panic buys should begin about 1,050 on the way to 1,200 before the end of October. Watch and learn!

manper said...

A different view (against nastiness) comes from Adam´s Trade Triangles, see last free video.


Wayne said...

A sign on the "nastiness" side of the ledger:


Anonymous said...

Allan, believe there is merit in technical analysis, but not to sure about planetary cycles?

Crawford Perspectives is a financial markets advisory service utilizing technical analysis and planetary cycles research to determine effective market-timing strategy.

Anonymous said...

Insider Trading and Investor Sentiment Signaling U.S. Stock Market Top

Wayne said...

And in the spirit of "fair and balanced", here's a link to a bullish argument:

Could probably go back and forth like this all day, which underscores the importance of trading a trend-following system instead of forecasts.

Good luck to all,

Anonymous said...

And add to current levels, a close below 1020 on the daily 5 pt Renko will be the first indication of a possible trend reversal.

- cramar

Anonymous said...

Hey Allan,

How many are now unemployed in the USA? About how many join the ranks each month?

About when do their benefits run out?

Christmas retail numbers, 2009?

Sadly, America did this to herself.

Anonymous said...

How about a fundamental analysis?

Margin on US listed stock was up to 5.9% in July, and short interest on NYSE stocks plunged by 10.3% in the second half of July. The late comers to the rally have arrived and it's euphoria time.

On the other hand, SEC filings show that inside traders are bailing out at levels unseen since 2004.

When the general public is borrowing to double their bet and get back to even, and the insiders are selling, it won't be long before the general public gets the shaft.

That's about all I need to know about the market's fundamentals.


Anonymous said...

Baltic Dry Index is way diverged here. It turned midway in July and has trended down since with a few hiccups higher. It has previewed a tougher market recently. This is not crash warning, but it is interesting that the bottom of the BDI in November 2008 and was still heading higher even at the end of Feb. The 200 and 50 MA crossed recently on the weekly renko (for the worse not better). Just info, that is all.

Anonymous said...

Hey Alan!

BCRX +84%
SVA + 70%
NVAX +110%

All since your July flu basket posts. Is it time to get out, before this pending decline?

Anonymous said...

I still do not know why so many people here bash your analysis and are completely rude. I see your commentary as an opinion - I have my own and respect your views...In fact, I am in your camp although I believe the trillions of stimulus can push this market higher - I am very hedged and will profit regardless. thanks for your blog and please just ignore the fools