The following four 3-Year Daily charts show the relative strength/weakness of the SPX compared with the WORLD Index.
Chart #1 shows a fairly steady climb of the SPX during the past three years. Recent action in October has put in a lower low and broken the uptrend on this daily timeframe. Lower lows have also been made in all three indicators (RSI, MACD & Stochastics)…hinting of further weakness ahead.
Chart #2 shows a more difficult climb of the WORLD Index once it broke above major resistance in January of 2013. This market topped out in July of this year, lost all of its 2014 gains, along with much of its 2013 gains, and hasn’t yet recovered. (more…)
You’ll pardon me if I pin the Gold Medal for Technical Analysis on my bare chest for my VIX prediction. As I said virtually every single day on TastyTrade for weeks, and as I said here countless times as well, I intended to stay aggressively short until the VIX reached “between 22 and 23″. Well, it peaked at 22.46 today, and that’s when I got out of any big shorts and – gasp – actually bought a bunch of stocks. The graph is fantastically glorious in its clarity. Thank you; thank you; yes, it is a beautiful thing. (more…)
The very strong decline yesterday caught me by surprise, as we had a very nice setup to retest the highs and a strong daily buy signal to back that up. I was expecting SPX to hold the 1940-50 area in line with fib retracement targets and that didn’t happen. So where does that leave us this morning?
Well in terms of the buy signal these are most immediately bullish in the context of a supportive pattern setup. We had one yesterday morning and we don’t have it now. The very nice double bottom setup is badly, and most likely fatally, damaged. I’m not a big believer in triple bottoms, which are rare, and tend to be raised as a possibility mainly when a possible double bottom is in the process of coming apart. The falling megaphone target back at the highs was only really interesting in the context of that double bottom. My megaphone targets as counter-trend patterns are the standard range of fibonacci retracements, and this one has already retraced slightly over 50% of the megaphone move. (more…)
Well I was saying yesterday morning that I was uneasy about the lack of a retest of Monday’s high and that there was still plenty of scope for surprises between 1935 and 1904 SPX, and we had a very impressive reversal yesterday after SPX made a marginal new low at 1925. That reversal was an amazing 45 points from the morning low to the closing highs, and brought to mind some pleasant hours I spent a while back in Las Vegas getting an adrenal gland workout at the High Roller, which at that time then sported the highest rollercoaster in the world among other terrifying rides. I was sad to read that this was all demolished in 2005, as I would have loved to do that all over again as and when I return to Las Vegas. Las Vegas – High Roller:
SPX put in a sixth day riding the daily lower band yesterday, with a touch of the lower band at the low and a hit of falling megaphone resistance at the high. SPX daily chart:
At the high we saw the test I was expecting of falling megaphone resistance, and that overthrew slightly at the high to test the 50 hour MA. After that the day was mostly downhill. So what does this mean? (more…)
Another whippy day yesterday, but one that, unlike the more superficially bullish Wednesday and Friday rallies last week, leaves the bulls in a very good position for a break up today. The daily lower band was tested in the morning, so that was either day three or day five of this sideways lower band ride, depending on how the second day with tests of both lower and middle bands is counted. The candle was a 60% bullish reversal hammer, and there are now possible bottoming setups across all the main US equity indices as well as some broken declining resistance trendlines. SPX daily chart:
It looks like we have another VXX shorting opportunity ahead of us. VXX touched the top of its downward sloping channel and fell away. If it breaks below that trend line we are set up for a nice trade. However, if we push higher this week, we are setting up for a very nice short trade.
VXX struggles outside of its channel.