Category Archives: Bulls/Bears

Disrupted Week

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I’m having a very disrupted week this week as my wife has a big deadline and I’m covering. Normal service will resume next week, but I will be absent from my desk a lot over the remainder of the week.

The nice bear setup yesterday morning fell apart quickly and, if there is no significant support break here, then SPX is still heading up with an obvious target at wedge resistance in the 2130 area. If bears can break below yesterday’s low at 2103.75 and sustain trade below it then I would now have a target in the 2087 area, but I’ll be waiting to see that happen before thinking that the bears might get a serious shot today. SPX 60min chart:

150303 SPX 60min Rising Wedge

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Getting Close Now

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SPX is approaching wedge resistance and broken trendline support, and those should intersect in the 2130 area tomorrow or Friday. Ideally the next short term high will be made there in that timeframe. I’m not expecting any overthrow because I’m expecting this high to retested and exceeded within a few weeks. That is when we may see an overthrow as SPX tests main resistance somewhere (by then) in the 2150-2200 area. SPX daily chart:

150225 SPX Daily Rising Wedge

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Minority Reports

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I’m ready to do a projection of what I am thinking may well happen on SPX over the next twelve months. My main scenario is this, and variants of the same scenario. It’s a good fit with the pattern structure, and the first month indicator for 2015 that indicated strongly that 2015 would at best be a flat year.

Does this match any other forecasts that I’m reading? Well no, most are far more bullish and they could be right, but I posted an even more minority view projection for bonds at the start of 2014 to general incredulity, and price followed my arrows very well for the next six months as everyone betting on the almost universally expected big bonds decline got a very nasty surprise. We’ll see whether this projection fares as well as that one did. SPX daily projection 150224:

150224 SPX Daily Projection 150224

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Support at the 50 Hour MA

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SPX didn’t make it to my minimum retracement target at 2080 as it made a perfect touch of the 50 hour MA and reversed hard there. That does tend to be solid support in uptrends until they are into the topping process and, as I was saying on Friday morning, this uptrend doesn’t look finished yet.

I am considering the possibility that a rising wedge from the October low is still forming and have drawn in that possible rising wedge support trendline in blue dotted line on the chart below. If that is the case then there is a very obvious target in the 2120-5 area at the intersection of the original wedge support trendline and the wedge resistance trendline. That is the first area of resistance that I am watching. SPX 60min chart:

150223 SPX 60min Trendlines BBs MAs

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