All donations go towards web site maintenance for all of Technical Watch,
keep it free of charge, and may be tax deductable as an investment expense.


PayPal Verified
Join our market chat sessions every Tuesday and Thursday at 4:00 pm Pacific time!
More information on subscriber services can be found at
http://www.technicalwatch.com/subs.htm

Sign up Calendar Latest Topics
 
 
 


Reply
  Author   Comment  
fib_1618

Moderator
Registered:
Posts: 5,158
Reply with quote  #1 
2016-01-14 16:00:35 fib1618: good day
2016-01-14 16:00:39 fib1618: how is everyone?
2016-01-14 16:00:50 tuna: Hi great
2016-01-14 16:01:33 fib1618: well...one thing you can always count on
2016-01-14 16:01:49 fib1618: when I have a tradeshow, expect the unexpected in the markets [smile]
2016-01-14 16:02:22 thespookyone: yep!
2016-01-14 16:03:18 tuna: Looks like the New Year's Eve 2:00 pm sell off had some legs.
2016-01-14 16:04:26 fib1618: and then we had our blueprint that included "what if" scenarios
2016-01-14 16:04:35 fib1618: OK...any questions or comments before we get started??
2016-01-14 16:04:41 tuna: yes
2016-01-14 16:04:47 fib1618: fire away
2016-01-14 16:04:50 tuna: have a question
2016-01-14 16:05:30 tuna: does that mco price divergence with Aug lows have any meaning?
2016-01-14 16:05:53 fib1618: you betchum
2016-01-14 16:05:59 fib1618: it's our "flag"
2016-01-14 16:06:13 fib1618: you may have seen that referred to in the cumulative charts
2016-01-14 16:06:48 fib1618: it's the point in which we saw the maximum amount of momentum thrust that allowed (in this case) the trend to turn from up to down
2016-01-14 16:07:17 fib1618: think of it as the top of a mountain where you use a "flag" to show your accomplishment
2016-01-14 16:07:23 fib1618: so if that flag is taken out
2016-01-14 16:07:35 fib1618: you have greater momentum in that direction
2016-01-14 16:07:48 fib1618: and that greater momentum will then provide a new targets in price
2016-01-14 16:08:02 fib1618: as it takes fuel for prices to meet a specific objective
2016-01-14 16:08:04 fib1618: remember
2016-01-14 16:08:26 fib1618: that we had downside price targets for the indices when the MCO moved to lower lows over the last month
2016-01-14 16:08:39 fib1618: that forecasted a challenge of the August/September price lows?
2016-01-14 16:08:43 fib1618: that has now been met
2016-01-14 16:09:13 fib1618: and now we'll see if we'll generate divergence in comparison with that flag point
2016-01-14 16:09:15 fib1618: now
2016-01-14 16:09:28 fib1618: we also know that the SML took out those same lows on Friday
2016-01-14 16:09:38 fib1618: and it's rare when the other indices don't join in
2016-01-14 16:10:16 fib1618: this is why the summary of the weekly breadth data last weekend suggested that another selling wave was likely to hit to meet this technical outlook
2016-01-14 16:10:30 fib1618: and that a reflex rally of some sort would be seen between then and today
2016-01-14 16:10:37 fib1618: that reflex took place today
2016-01-14 16:10:50 fib1618: beginning just after the 1st hour
2016-01-14 16:10:59 fib1618: well...I'm assuming it did
2016-01-14 16:11:04 fib1618: I haven't looked at the data yet
2016-01-14 16:11:13 fib1618: it wasn't on Monday or Tuesday
2016-01-14 16:11:18 fib1618: because we also know
2016-01-14 16:11:31 fib1618: that until the blip resistance structure that was seen last week is taken out
2016-01-14 16:11:38 fib1618: the momentum is still with the bears
2016-01-14 16:11:45 fib1618: and we didn't do that on Monday or Tuesday
2016-01-14 16:11:48 fib1618: and down we went
2016-01-14 16:12:02 fib1618: did I answer your question?
2016-01-14 16:12:24 tuna: yep, got it
2016-01-14 16:12:28 fib1618: super
2016-01-14 16:12:36 fib1618: OK...one more minute and we'll get started
2016-01-14 16:12:50 fib1618: allow this stuff to seep into you over time
2016-01-14 16:13:05 fib1618: it's all repetitive in nature
2016-01-14 16:13:13 fib1618: and all has to do with physics
2016-01-14 16:13:21 fib1618: it's all in the math of what we're working with
2016-01-14 16:13:40 fib1618: and then when you think you "got it"
2016-01-14 16:13:51 fib1618: the market will throw something at you just to keep you honest
2016-01-14 16:13:59 fib1618: fun fun fun
2016-01-14 16:14:01 fib1618: [smile]
2016-01-14 16:14:31 fib1618: before we get started
2016-01-14 16:14:47 fib1618: remember we have 3 sessions next week - Tuesday, Wednesday and Thursday
2016-01-14 16:15:05 fib1618: and the way things are setting up, it should be a fun week
2016-01-14 16:15:11 fib1618: OK...let's get SC up and see what we have to work with
2016-01-14 16:15:53 fib1618: after challenging the lows of last week
2016-01-14 16:16:17 fib1618: the NYSE CO breadth MCO bounced sharply higher today from its deeply "oversold" level
2016-01-14 16:16:36 fib1618: and moved to above Tuesday's high point
2016-01-14 16:16:49 fib1618: this would indicate that our reflex rally is now under way
2016-01-14 16:16:57 fib1618: and this will likely continue into early next week
2016-01-14 16:17:36 fib1618: with that said, however, we can't actually call a price bottom at this juncture until we see the small area of blip resistance seen at the beginning of the year taken out
2016-01-14 16:17:42 fib1618: once that's accomplished
2016-01-14 16:17:58 fib1618: then we can then call this particular price sequence complete
2016-01-14 16:18:29 tuna: @ -26?
2016-01-14 16:18:52 fib1618: more like around -30
2016-01-14 16:18:54 fib1618: or so
2016-01-14 16:19:01 fib1618: let me see if I can get the number
2016-01-14 16:19:19 fib1618: -31
2016-01-14 16:19:43 fib1618: but first we will have to move back above the -50 level
2016-01-14 16:19:46 fib1618: so one thing at a time
2016-01-14 16:20:02 fib1618: of greater importance in the way of price
2016-01-14 16:20:23 fib1618: is that we moved below the late August lows today in the NYSE CO breadth MCSUM
2016-01-14 16:20:32 fib1618: so that provides us with a new downside target
2016-01-14 16:20:36 fib1618: or more to the point
2016-01-14 16:21:03 fib1618: the probability of prices closing below the August crash lows is fairly high now
2016-01-14 16:21:21 fib1618: and though we did so yesterday
2016-01-14 16:21:33 fib1618: we should see them stay there as well
2016-01-14 16:21:49 fib1618: as far as the MCO is concerned
2016-01-14 16:22:17 fib1618: we did generate bullish divergence with the August lows on Wednesday
2016-01-14 16:22:21 fib1618: but with this break to new lows in the MCSUM
2016-01-14 16:22:55 fib1618: it's now going to take a longer sequence of higher lows in the MCO before we're able to have a tradable price bottom to work with
2016-01-14 16:23:06 fib1618: now...that's what the common stocks are saying
2016-01-14 16:23:16 fib1618: let's see what the broader market is suggesting
2016-01-14 16:24:12 fib1618: OK...so the good news is that the NYSE Composite breadth MCO actually had a divergent low compared mid December
2016-01-14 16:24:18 fib1618: (no less with last August)
2016-01-14 16:24:31 fib1618: but with a -89 reading
2016-01-14 16:24:58 fib1618: it's going to take some time before we begin to construct a floor strong enough for prices to turn and reverse to the upside
2016-01-14 16:25:19 fib1618: this then tells us that any or all rallies at this juncture will tend to be short covering in nature
2016-01-14 16:25:35 fib1618: and until we start seeing fresh funds enter the market
2016-01-14 16:25:51 fib1618: prices will continue to be volatile, choppy, with a bearish bias
2016-01-14 16:26:17 fib1618: looking at the NYSE Composite breadth MCSUM
2016-01-14 16:26:37 fib1618: and we can see the added strength being provided by the interest rate sensitive issues
2016-01-14 16:26:50 fib1618: both visually and dynamically
2016-01-14 16:27:11 fib1618: where the CO has a reading of -843 and had taken out its August lows
2016-01-14 16:27:36 fib1618: the Composite has a reading nearly half of that (-457) and remains well above these same August lows
2016-01-14 16:28:03 fib1618: this then instructs us that there is actually quite a bit of capital that is keeping things from falling apart in general
2016-01-14 16:28:35 fib1618: and that selling is being narrowed to those issues that have their price basis on future earnings growth
2016-01-14 16:28:48 fib1618: which then tells us that economy is not as good as the FED thinks it is
2016-01-14 16:29:20 fib1618: and that interest rates will be moving lower from this juncture...especially since we have no commodity inflation to worry about
2016-01-14 16:29:31 fib1618: which is the biggest enemy for the debt asset class
2016-01-14 16:29:57 fib1618: this also tells us that our buy signal in gold is not likely to last as long as some have opined it would over the last week or so
2016-01-14 16:30:33 fib1618: but it may still be part of a longer term bottoming sequence
2016-01-14 16:30:44 fib1618: that's neither here or there for now
2016-01-14 16:30:49 fib1618: but all of this does matter
2016-01-14 16:31:14 fib1618: as all the asset classes are intertwined with each other
2016-01-14 16:31:34 fib1618: taking this idea altogether then
2016-01-14 16:32:01 fib1618: and it would appear that we're having a deflationary re-balancing of the asset classes at this time
2016-01-14 16:32:06 fib1618: and because of this
2016-01-14 16:32:26 fib1618: equities will likely to continue to see price decay for the 1st quarter
2016-01-14 16:33:02 fib1618: notice also that the 10% Trend in the NYSE Composite breadth MCO did hit the -200 level yesterday
2016-01-14 16:33:14 fib1618: and that alone deserves to be relieved
2016-01-14 16:33:52 fib1618: as that's about as high of an imbalance we usually see before we're "FORCED" to move the other way in an attempt to relieve the pressure
2016-01-14 16:34:17 fib1618: just typical bear market action all in all
2016-01-14 16:34:29 fib1618: where we see sharp and short rallies
2016-01-14 16:34:36 fib1618: and once exhausted
2016-01-14 16:34:41 fib1618: prices just fall apart under the weight of the market default
2016-01-14 16:34:51 fib1618: take the Small Caps for example
2016-01-14 16:35:47 fib1618: the key to liquidity and its relationship to stock prices is that is needs to be plentiful enough to where even the "less deserving" see their fair share of money flow
2016-01-14 16:36:01 fib1618: or better said...investment capital
2016-01-14 16:36:12 fib1618: as these stocks have little but the hope of future growth
2016-01-14 16:36:23 fib1618: so with their moving to lower MCO lows last week
2016-01-14 16:36:51 fib1618: this tells us, without any kind of hesitation, and with substance, that liquidity levels are currently less and less ample to support prices
2016-01-14 16:37:08 fib1618: now...whether they're moving into other asset classes
2016-01-14 16:37:16 fib1618: or whether this capital is moving to cash
2016-01-14 16:38:05 fib1618: is not as important as it is to know that stock prices can not move against the bear market default unless there is more than enough fuel to break the bounds of this all consuming pull of (market) gravity
2016-01-14 16:38:19 fib1618: this is then why
2016-01-14 16:38:30 fib1618: when we do see small caps and secondaries leading to the upside
2016-01-14 16:39:12 fib1618: this then re-enforces the idea that there more than enough liquidity to where it can move into riskier areas of investment
2016-01-14 16:39:38 fib1618: and not stay within the myopic compounds of just the multi national issues that provide market value
2016-01-14 16:40:13 fib1618: no one here should be at all surprised of this early year stumble
2016-01-14 16:40:31 fib1618: remember how the OEX MCSUM was weaker than the SPX?
2016-01-14 16:40:46 fib1618: and common stocks suffered
2016-01-14 16:40:59 fib1618: the NASDAQ Composite was weak
2016-01-14 16:41:10 fib1618: but the higher weighted NDX issues were not
2016-01-14 16:41:26 fib1618: anyway...let's move on
2016-01-14 16:41:56 fib1618: the NASDAQ breadth MCO challenged its August lows yesterday
2016-01-14 16:42:13 fib1618: and just missed by 4 points from breaching that level
2016-01-14 16:42:30 fib1618: problem here though
2016-01-14 16:42:37 fib1618: is that price is not at a lower low
2016-01-14 16:42:50 fib1618: and this is going to be a problem for the bulls for the next several days
2016-01-14 16:43:03 fib1618: as even though the downside price targets have been met
2016-01-14 16:43:08 fib1618: and a reflex is likely
2016-01-14 16:43:33 fib1618: we're going to need clean divergence across the board before this intermediate term correction has run its course
2016-01-14 16:43:38 fib1618: and right now
2016-01-14 16:43:43 fib1618: we have "sloppy" divergence
2016-01-14 16:44:23 fib1618: note also that the 10% Trend of the NASDAQ MCO also moved below the -200 level yesterday
2016-01-14 16:44:43 fib1618: so we're just realizing this tension
2016-01-14 16:44:45 fib1618: now...
2016-01-14 16:45:03 fib1618: if we don't take out the blip resistance level here
2016-01-14 16:45:20 fib1618: prices will remain vulnerable to sharp sell offs given the amount of thrust (fuel) we've already seen to the downside
2016-01-14 16:45:40 fib1618: "thrust" works in both directions
2016-01-14 16:45:48 fib1618: but when it's on the sell side
2016-01-14 16:46:03 fib1618: it gives that much more "heaviness" to the price pattern
2016-01-14 16:46:12 fib1618: from where accidents can happen
2016-01-14 16:47:01 fib1618: let's also note that the NASDAQ breadth MCSUM took its horizontal support level today seen back in October
2016-01-14 16:47:33 fib1618: so those who may believe that today's reversal bar is something important as it applies to low points in the pricing structure
2016-01-14 16:48:12 fib1618: are likely to be disappointed again (like they were earlier this week) as short covering exhausts itself
2016-01-14 16:48:21 fib1618: and there isn't any fresh buying to carry on the momentum
2016-01-14 16:48:33 fib1618: for now
2016-01-14 16:48:52 fib1618: tops beneath tops control the NASDAQ breadth MCSUM structure
2016-01-14 16:48:58 fib1618: and until this is violated
2016-01-14 16:49:12 fib1618: the path of least resistance for prices, on an intermediate term basis, remains to the downside
2016-01-14 16:49:24 fib1618: "keep it simple"
2016-01-14 16:49:40 fib1618: and respect what money is showing us on a trending basis
2016-01-14 16:49:46 fib1618: the MCO being the short term trend of money flow
2016-01-14 16:49:55 fib1618: the MCSUM being the intermediate term trend
2016-01-14 16:50:05 fib1618: and until both are on the same side of zero
2016-01-14 16:50:16 fib1618: even if the MCO moves into positive territory
2016-01-14 16:50:32 fib1618: it's now going to take the MCSUM a couple of weeks to confirm
2016-01-14 16:50:35 fib1618: and because of this
2016-01-14 16:50:41 fib1618: prices will likely move sideways at best
2016-01-14 16:50:57 fib1618: so there's no rush here to climb on board on the anticipation of a price low
2016-01-14 16:51:04 fib1618: maybe a swing trade
2016-01-14 16:51:08 fib1618: but nothing more than that
2016-01-14 16:51:11 fib1618: and...
2016-01-14 16:51:16 fib1618: as we have seen over the last week
2016-01-14 16:51:20 fib1618: unless you're nimble
2016-01-14 16:51:47 fib1618: you might as well stand aside until things settle down a bit from where you can find a proper cadence to work with
2016-01-14 16:52:04 fib1618: I was watching the last hour of trading on Friday from my hotel room on CNBC
2016-01-14 16:52:19 fib1618: and watched how the Dow was up...I think 30 at the top of the hour
2016-01-14 16:52:29 fib1618: and you can feel it drip drip drip lower
2016-01-14 16:52:40 fib1618: and the point moves were large
2016-01-14 16:52:49 fib1618: like a 15 to 20 points at a blink of an eye
2016-01-14 16:52:54 fib1618: don't know about you
2016-01-14 16:53:07 fib1618: but that takes a cast iron stomach to trade that
2016-01-14 16:53:14 fib1618: and very deep pockets
2016-01-14 16:53:23 fib1618: again...it's what we're all comfortable with
2016-01-14 16:53:35 fib1618: but implied (no less actual) volatility is very high right now
2016-01-14 16:53:55 fib1618: and if your trading options...good luck on your Delta
2016-01-14 16:54:21 fib1618: you can lose half your profits in a blink of an eye
2016-01-14 16:54:29 fib1618: onward
2016-01-14 16:54:58 fib1618: OK...here's some good confirmation that we're likely to see upside follow through for the next couple of days
2016-01-14 16:55:13 fib1618: as the NDX breadth MCO moved above its blip resistance point today
2016-01-14 16:55:33 fib1618: while providing some good divergence in the pattern
2016-01-14 16:55:44 fib1618: problem here though
2016-01-14 16:55:59 fib1618: is that the NDX breadth MCSUM moved down and through its -500 level today
2016-01-14 16:56:23 fib1618: and though a continued effort for a zero line snapback in the NDX MCO is likely
2016-01-14 16:56:51 fib1618: this may only be a pause point as the NDX breadth MCSUM approaches its horizontal lows of late September
2016-01-14 16:56:55 fib1618: in other words
2016-01-14 16:57:14 fib1618: if the rest of the general market doesn't also eclipse its blip points
2016-01-14 16:57:35 fib1618: a snapback to the zero line in the NDX would be a great entry point for a short
2016-01-14 16:57:46 fib1618: maybe in the Q's
2016-01-14 16:57:53 fib1618: just something to watch for
2016-01-14 16:58:45 fib1618: looking at last Friday's lows in the NDX, they did diverge ever so slightly with the August lows
2016-01-14 16:59:41 fib1618: so this increases the odds that it's going to take some time now to pull things back together again to where a more stable structure can be constructed for the market bulls
2016-01-14 16:59:51 fib1618: all corrective at this point
2016-01-14 17:00:01 fib1618: more to the point
2016-01-14 17:00:05 fib1618: today was a counter trend bounce
2016-01-14 17:00:25 fib1618: looking at the price chart
2016-01-14 17:00:40 fib1618: until we take out yesterday's intraday highs
2016-01-14 17:00:56 fib1618: the odds are high that we're going to continue to see lower price lows
2016-01-14 17:01:20 fib1618: but taking out the blip resistance point is a good start in that direction
2016-01-14 17:01:41 fib1618: we just need to see more market uniformity...especially in the NASDAQ Composite
2016-01-14 17:02:23 fib1618: divergent structure is also noted in the SPX breadth MCO
2016-01-14 17:02:34 fib1618: but until we take out the blip resistance point in the pattern
2016-01-14 17:02:49 fib1618: we can't actually refer to this as being an important turning point
2016-01-14 17:03:11 fib1618: looking at the 10% Trend component of the SPX MCO
2016-01-14 17:03:28 fib1618: and it would appear that this is more of a technical bounce from a deeply "oversold" market condition
2016-01-14 17:03:42 fib1618: than it would be a exhaustion point for the sellers
2016-01-14 17:04:03 fib1618: note how we had to dip below the -200 level twice before we found our legs
2016-01-14 17:04:20 fib1618: kinda shows how really weak the markets are right now
2016-01-14 17:04:33 fib1618: any bets on when the FED is going to reverse their rate hike?
2016-01-14 17:04:58 fib1618: we talked many times on how weak things had been
2016-01-14 17:05:15 fib1618: but I guess they had to follow through...or it would be a sign of weakness
2016-01-14 17:05:17 fib1618: then again
2016-01-14 17:05:49 fib1618: they were supposed to raise rates back in June...then September...guess they needed the jobs number to dip to 5% to justify it
2016-01-14 17:06:35 fib1618: showing some better near term strength in the OEX breadth MCO
2016-01-14 17:06:41 fib1618: as it moved above its blip resistance point
2016-01-14 17:07:02 fib1618: and telling us that the greater amount of buying today was that of the "cream" stocks (those that rise to the top)
2016-01-14 17:07:32 fib1618: we'll see if we can improve further above the -25 level or not
2016-01-14 17:07:59 fib1618: though the 10% Trend has now snapped back up to the 5% Trend on the OEX components
2016-01-14 17:08:15 fib1618: and that usually suggests a pullback for Friday
2016-01-14 17:08:52 fib1618: looking at the price patterns
2016-01-14 17:09:34 fib1618: and noting how our reference to possible bull flags turned into something that resembled a water fall decline
2016-01-14 17:10:00 fib1618: with the current structure looking corrective
2016-01-14 17:10:05 fib1618: a pause
2016-01-14 17:10:27 fib1618: boy...if it wasn't for January OPEX being next week
2016-01-14 17:10:38 fib1618: one would think that another shoe was about to drop
2016-01-14 17:10:49 fib1618: but we could just chop sideways into next Friday
2016-01-14 17:10:54 fib1618: and then pull the plug
2016-01-14 17:11:24 fib1618: the MID breadth MCO remains very weak here
2016-01-14 17:11:45 fib1618: but it currently has some strong divergence in place
2016-01-14 17:12:13 fib1618: just need to build on this for the bulls to have any chance of a multi week pause in the trend to develop
2016-01-14 17:12:40 fib1618: also note that we did take out the late August lows today in the MID breadth MCSUM
2016-01-14 17:13:06 fib1618: sure looks like an Elliott 3rd wave
2016-01-14 17:13:26 fib1618: don't know the degree
2016-01-14 17:13:32 fib1618: but it has the signature
2016-01-14 17:13:54 fib1618: as mentioned before
2016-01-14 17:14:03 fib1618: the SML breadth MCO did take out its August lows last Friday
2016-01-14 17:14:12 fib1618: so that would give us a new downside price target
2016-01-14 17:14:15 fib1618: let me check
2016-01-14 17:14:46 fib1618: ugh...we're there already
2016-01-14 17:14:53 fib1618: let me zoom out a bit
2016-01-14 17:15:37 fib1618: not good
2016-01-14 17:16:11 fib1618: still checking
2016-01-14 17:17:03 fib1618: well...the one thing we can have a high confidence in
2016-01-14 17:17:29 fib1618: is that the 600 level is not likely to hold now because of Friday's break
2016-01-14 17:17:53 fib1618: and downside targets are in multiples of 25 points
2016-01-14 17:18:07 fib1618: so let's look for 575 as an initial target
2016-01-14 17:18:26 fib1618: but if the rest of the market breaks the October 2014 levels
2016-01-14 17:19:00 fib1618: we have enough momentum now to move all the way back to 2012 levels at 450
2016-01-14 17:21:01 fib1618: in any event
2016-01-14 17:21:21 fib1618: that last hour on Friday looks to be one of those back breaking moments
2016-01-14 17:21:29 fib1618: and this may last now for a couple of months
2016-01-14 17:21:33 fib1618: maybe into April
2016-01-14 17:22:07 fib1618: if you zoom out to about 2012 in the SML
2016-01-14 17:22:27 fib1618: you can see how the price structure looks to be impulsing lower now
2016-01-14 17:22:47 fib1618: with a nice rounding top in the pattern
2016-01-14 17:23:08 fib1618: we may need to have more hurt now before we can get better
2016-01-14 17:24:25 fib1618: and it would appear that the TM breadth MCO is also working with a highly "oversold" market condition
2016-01-14 17:24:38 fib1618: but until we get back to the zero line
2016-01-14 17:25:04 fib1618: the Wilshire 5000 will be tilted toward the sellers over the next couple of days
2016-01-14 17:25:08 fib1618: so...
2016-01-14 17:25:28 fib1618: although we have many daily momentum oscillators at "oversold" levels
2016-01-14 17:25:48 fib1618: and the 8 day ADX showing this to be an area of "trend exhaustion"
2016-01-14 17:26:18 fib1618: there hasn't been enough money moving back in as yet to call that the decline from the beginning of the year has run its course
2016-01-14 17:26:35 fib1618: if one were to put an Elliott labeling on this
2016-01-14 17:26:43 fib1618: it would appear to be a small wave 4 in progress
2016-01-14 17:27:00 fib1618: which would then allow for one more panic selling wave to hit the markets over the next couple of days
2016-01-14 17:27:45 fib1618: boy...I sure don't' like the angle of descent on that triple top sequence seen in November and December on the daily
2016-01-14 17:28:10 fib1618: very similar to the one we had in July and August
2016-01-14 17:28:14 fib1618: with the same result
2016-01-14 17:28:17 fib1618: but this time
2016-01-14 17:28:27 fib1618: it doesn't appear to be finished
2016-01-14 17:29:08 fib1618: nothing indicating at this time that we have a price bottom that can be traded either
2016-01-14 17:29:19 fib1618: let me take a quick run through on the sectors
2016-01-14 17:30:10 fib1618: the XLY breadth MCSUM took out its October lows this week
2016-01-14 17:30:33 fib1618: and though we hit the downside target of $72
2016-01-14 17:30:57 fib1618: this appears to be a pause to refresh before we see another wave hit the coast
2016-01-14 17:31:25 fib1618: the XLP breadth MCSUM is trying its best to hold the -250 level
2016-01-14 17:32:06 fib1618: but any downside follow through tomorrow would allow prices to test the $47 level
2016-01-14 17:32:21 fib1618: poor XLE
2016-01-14 17:32:36 fib1618: it was just too far underwater to do much
2016-01-14 17:32:47 fib1618: and then collapsed under its low weight
2016-01-14 17:32:56 fib1618: let me see what the next target is there
2016-01-14 17:34:02 fib1618: well...I believe that we decided that any break of the $59 level would push us to $55
2016-01-14 17:34:04 fib1618: that's been met
2016-01-14 17:34:11 fib1618: next downside target is $45
2016-01-14 17:34:40 fib1618: where these a strong pattern support
2016-01-14 17:35:32 fib1618: so maybe a short at .10 below Wednesday's intraday lows for an entry
2016-01-14 17:35:46 fib1618: otherwise...I wouldn't chase this one
2016-01-14 17:36:05 fib1618: downside target on the XLF also met
2016-01-14 17:36:19 fib1618: and looking sick internally
2016-01-14 17:36:36 fib1618: sure smacks of deflation
2016-01-14 17:37:10 fib1618: even the XLV breadth MCSUM is now back below its zero line now
2016-01-14 17:37:32 fib1618: I think the downside target there was about $65
2016-01-14 17:37:37 fib1618: so a little short so far
2016-01-14 17:37:53 fib1618: looks like a consolidation in the price action
2016-01-14 17:38:16 fib1618: for all of these sector charts
2016-01-14 17:38:30 fib1618: it might provide better clarity if you went to a 1 MA close only format
2016-01-14 17:38:42 fib1618: that way you can get rid of that August intraday price bar
2016-01-14 17:39:07 fib1618: and under that scenario
2016-01-14 17:39:53 fib1618: a break below $64 would be anticipated
2016-01-14 17:40:08 fib1618: don't like that pattern structure there at all
2016-01-14 17:40:32 fib1618: we'll see if the -250 level in the XLV breadth MCSUM holds or not
2016-01-14 17:40:39 tuna: Just curious do you have any historical perspective
2016-01-14 17:40:54 fib1618: in what respect?
2016-01-14 17:41:09 tuna: on the first day year trading such a large gap down
2016-01-14 17:41:17 fib1618: you know
2016-01-14 17:41:20 fib1618: a date's a date
2016-01-14 17:41:43 fib1618: the thrust of any analysis is not so much when it happens but if it happens
2016-01-14 17:41:55 fib1618: last week could had been next week
2016-01-14 17:41:59 fib1618: all we know, and all we care about, is that there has been enough selling now to where price momentum can continue lower
2016-01-14 17:42:25 fib1618: to whatever that may lead us
2016-01-14 17:42:31 fib1618: it's sort of like "sell in May"
2016-01-14 17:42:37 fib1618: people still do that
2016-01-14 17:43:05 fib1618: but if you did do that in the last 2 years
2016-01-14 17:43:16 fib1618: you lost out on making a profit on the long side
2016-01-14 17:43:38 fib1618: it worked OK in 2012
2016-01-14 17:43:43 fib1618: but again
2016-01-14 17:43:54 fib1618: prices can only move in one direction or the other if money is moving in advance
2016-01-14 17:44:07 fib1618: now remembering back at the end of the year
2016-01-14 17:45:13 fib1618: and we talked about how we needed to get above the +50 level in the NYSE Composite breadth MCO if there were to be any chance of extending the bullish timeline out beyond the first week of January
2016-01-14 17:45:22 fib1618: and we didn't do that
2016-01-14 17:45:31 fib1618: and, in fact, we moved back to the zero line
2016-01-14 17:45:43 fib1618: actually moved below it
2016-01-14 17:45:52 fib1618: snapped back to the zero line
2016-01-14 17:45:57 fib1618: and then made a lower low
2016-01-14 17:46:01 fib1618: and that was our sell signal at the end of December
2016-01-14 17:46:36 fib1618: especially since the NYSE Composite breadth MCSUM was having its issues moving back above the zero line
2016-01-14 17:46:49 fib1618: so although the short term trend was fairly positive
2016-01-14 17:47:12 fib1618: there wasn't enough to convince the intermediate data to join the party
2016-01-14 17:47:17 fib1618: and down we went like a rock as the bears took zero line control
2016-01-14 17:47:37 fib1618: we also had several MCSUM's breaking down after showing Summation Failure patterns
2016-01-14 17:47:38 fib1618: so again
2016-01-14 17:47:59 fib1618: it's not surprising at all that the beginning of the year was a bad time for being in stocks
2016-01-14 17:48:24 fib1618: we commented on how the market was heavy as well
2016-01-14 17:48:47 fib1618: and though we can't know what will actually happen
2016-01-14 17:49:28 fib1618: it's better to be on the right side on where money is moving than to try to fight against this trend
2016-01-14 17:49:38 fib1618: sort of like trying to fight a rip tide
2016-01-14 17:49:55 fib1618: you'll likely drown than make any real headway
2016-01-14 17:50:03 fib1618: and..
2016-01-14 17:50:20 fib1618: the January barometer doesn't always work
2016-01-14 17:50:31 fib1618: as monetary policy can and does change
2016-01-14 17:50:49 fib1618: so it's good to look at history
2016-01-14 17:51:00 fib1618: but we shouldn't get caught up in it
2016-01-14 17:51:15 fib1618: it just so happens that this decline took place now
2016-01-14 17:51:18 fib1618: and not in October
2016-01-14 17:51:20 fib1618: or April
2016-01-14 17:51:22 fib1618: or June
2016-01-14 17:52:01 fib1618: but you have to keep the public interested
2016-01-14 17:52:08 fib1618: look at 2015
2016-01-14 17:52:22 fib1618: usually year 5 in a decade is the strongest
2016-01-14 17:52:32 fib1618: and all we did was come out pretty much where we started
2016-01-14 17:52:36 fib1618: now...historically
2016-01-14 17:52:45 fib1618: if all we did in a strong year was move sideways
2016-01-14 17:53:10 fib1618: the next year is probably not going to be as buoyed as some may think it might be
2016-01-14 17:53:14 fib1618: it's like cycles
2016-01-14 17:53:22 fib1618: as they creep to their apex
2016-01-14 17:53:34 fib1618: and when they start their right transition
2016-01-14 17:53:50 fib1618: the real force behind the declining cycle takes hold
2016-01-14 17:54:07 fib1618: so historical perspective is always nice to know
2016-01-14 17:54:24 fib1618: but means little unless the flow of money will allow this or that scenario to actually play out
2016-01-14 17:55:11 fib1618: the XLI breadth MCO is showing a bit of strength here
2016-01-14 17:55:28 fib1618: as its downside price target has also been met
2016-01-14 17:55:35 fib1618: the thing about price targets
2016-01-14 17:55:51 fib1618: as it is with the 250 multiples in the MCSUM and 25 multiples in the MCO
2016-01-14 17:56:03 fib1618: these are only areas in which support or resistance might be seen
2016-01-14 17:56:18 fib1618: and in no way provides a cinch that it will when all said and done
2016-01-14 17:56:22 fib1618: take the SML for example
2016-01-14 17:56:27 fib1618: it reached its downside target
2016-01-14 17:56:45 fib1618: but now has shown enough money moving out to where lower price projections can now be attained
2016-01-14 17:57:27 fib1618: so if we have other technical tools that forecast price moves provide lower targets from current levels
2016-01-14 17:57:47 fib1618: they can be now be made...all within the context on how much money has already left
2016-01-14 17:58:44 fib1618: this is why we don't really know for sure which level of $25 multiples will be the actual price low for this trending specific in the SML
2016-01-14 17:59:04 fib1618: we'll just have to use other pieces of analytical information to get this answer
2016-01-14 17:59:58 fib1618: the XLB and XLK breadth MCO's also moved above their blip resistance areas
2016-01-14 18:00:11 fib1618: but as we can see on the chart
2016-01-14 18:00:24 fib1618: the XLK breadth MCSUM did take out the lows of last August last week
2016-01-14 18:00:27 fib1618: and because of that
2016-01-14 18:00:36 fib1618: new downside targets are now provided
2016-01-14 18:00:38 fib1618: let me check
2016-01-14 18:01:27 fib1618: looks like $37.25
2016-01-14 18:01:49 fib1618: with $36.25 being critical to the longer term pricing structure
2016-01-14 18:03:15 fib1618: the top looks like a 3 peaks and domed house...but that October low messes up the symmetry
2016-01-14 18:03:33 fib1618: we'll have to watch that one
2016-01-14 18:03:49 fib1618: given that we have some heavy hitters in this group
2016-01-14 18:04:05 fib1618: hey...I hear Apple is going to go into the automotive business!
2016-01-14 18:04:20 fib1618: that should be fun
2016-01-14 18:04:51 fib1618: and the XLU looks interesting at this stage on the long side
2016-01-14 18:05:32 fib1618: especially if the XLU breadth MCO can get back above the +50 level
2016-01-14 18:05:53 fib1618: so...
2016-01-14 18:06:03 fib1618: it would appear that the market would "like to" bottom
2016-01-14 18:06:10 fib1618: but we don't have a majority rule on this
2016-01-14 18:06:21 fib1618: and with the recent tests of the lows in the MCO's
2016-01-14 18:06:37 fib1618: we have to be on guard to hard reversals to the downside at any time
2016-01-14 18:06:49 fib1618: let me check the OBV's and the TRIN and I'll get the BETS number
2016-01-14 18:07:18 fib1618: well...
2016-01-14 18:07:28 fib1618: STVO's and VTO's are now "oversold"
2016-01-14 18:07:40 fib1618: so if the CVI can back to above the +50 levels
2016-01-14 18:07:54 fib1618: we could then have a week of moving sideways
2016-01-14 18:08:32 fib1618: lots of volume today
2016-01-14 18:08:43 fib1618: they're trying to hold her here
2016-01-14 18:08:53 fib1618: they're being market participants
2016-01-14 18:09:13 fib1618: NYSE TRIN at .62
2016-01-14 18:09:17 fib1618: short covering
2016-01-14 18:09:34 fib1618: Open 10 now at 1.13
2016-01-14 18:09:48 fib1618: so it would appear that we're getting some bottom fishers here
2016-01-14 18:10:09 fib1618: NASDAQ TRIN at .69
2016-01-14 18:10:19 fib1618: Open 10 at 1.02
2016-01-14 18:10:25 fib1618: got to be careful here
2016-01-14 18:10:32 fib1618: lots of bottom pickers again
2016-01-14 18:10:45 fib1618: TM TRIN at .64
2016-01-14 18:10:54 fib1618: Open 10 at 1.08
2016-01-14 18:11:10 fib1618: look how deep the Open 10's moved this past week
2016-01-14 18:11:11 fib1618: wow
2016-01-14 18:11:28 fib1618: I would say bottom
2016-01-14 18:11:34 fib1618: but money is flowing out
2016-01-14 18:11:43 fib1618: so it just could be a temporary wash out point
2016-01-14 18:11:48 fib1618: so...
2016-01-14 18:12:09 fib1618: it would appear that there 's been a lot of technical damage since our last session
2016-01-14 18:12:39 fib1618: to the point in which we're now likely to see prices moving sideways to down for the next 3-4 weeks
2016-01-14 18:13:03 fib1618: making our next chance of a tradable bottom sometime around the beginning of February
2016-01-14 18:13:10 fib1618: let me check the BETS
2016-01-14 18:13:37 fib1618: OY!
2016-01-14 18:13:55 fib1618: look at all this pattern destruction!
2016-01-14 18:14:17 fib1618: -80
2016-01-14 18:14:29 fib1618: again tied for the worse number in history
2016-01-14 18:14:42 fib1618: let others hope
2016-01-14 18:14:58 fib1618: but it's going to take time before we get this ship righted again
2016-01-14 18:15:05 fib1618: anything else?
2016-01-14 18:16:56 fib1618: OK...if there's nothing else then
2016-01-14 18:17:00 fib1618: I'm going to take off
2016-01-14 18:17:09 fib1618: remember 3 sessions next week
2016-01-14 18:17:13 fib1618: and they should be good ones
2016-01-14 18:17:17 fib1618: everyone have a great weekend
2016-01-14 18:17:25 fib1618: and we'll see how things are doing on Tuesday
2016-01-14 18:17:26 fib1618: good night


__________________
Dave's LinkedIn Profile

Technical Watch Twitter Page

Technical Watch Facebook Page

"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

"An economist is someone who sees something happen, and then wonders if it would work in theory" - Ronald Reagan

"What we see depends mainly on what we look for" - John Lubbock

"The eye sees only what the mind is ready to comprehend" - Henri Bergson

“Answers are easy; it’s asking the right questions which is hard” - Dr. Who - 1977

"You know the very powerful and the very stupid have one thing in common - they don't alter their views to fit the facts, they alter the facts to fit their views (which can be uncomfortable if you happen to be one of the facts that needs altering)" - Dr. Who - 1977

0
Previous Topic | Next Topic
Print
Reply

Quick Navigation:

Easily create a Forum Website with Website Toolbox.






Copyright 2000-2020 Technical Watch