The question that everyone has is whether or not the bull move off of the summer 2010 lows is over or not?  The saying goes … "they don't ring a bell at the top!!".  All we have to go by is our Spidey Senses our Nija Level 9 t-shirts and the charts.

So what do the charts tell us …

So far the chart from the past couple of months shows us that price has been giving us classic signs of nice tight trending candles higher and corrective overlapping candles/patterns lower.

Since the March Japan-driven crisis lows, the market has put in higher highs and higher lows … another feather in the bull's cap.

The Moving Averages all remain in a bullish stance … 20ema > 50ema > 100sma > 200sma.

The only real question mark will be answered this coming week I believe …  the chart below highlights that the moves higher since the late-April top have been "corrective" in appearance.  If the move lower is not over then we should not get a close above Thursday's high of $135.03.  To the low side if the ABC corrective move lower is over, we should not get a move below the 50EMA of roughly $133.00  It's a simple as $135 and $133 … until those levels are breached I think traders should be playing it safe.

The above analysis fits in with the look of the 60-minute triangle analysis that I posted on Friday … here is the chart from that post.

Summer of 2010

I thought it might be useful to look back to last summer to review the "look" of that corrective period …

Notice how the bigger waves are mainly overlapping in nature and most of the candles are overlapping in nature.  The 20 EMA crossed lower than the 50 EMA and the correction was not really over until a higher low was made and then confirmed when the 20 EMA crossed above the 50 EMA.  By this time helicopter Ben had all the printing presses warmed up and in perfect working condition.

In the end, people are not going to correctly "predict" the direction of the market based on Euro problems, housing foreclosures, or the price of rice in China.  The only thing people should really be watching is PRICE.  After all there is good reason why people say " PRICE IS KING".

Cheers … Leaf_West and @Leaf_West on Twitter

I'm going to repeat the blog post I made back on April 20th called "Goldman … Moving Averages".

"As the readers of this blog know, I often look at charts by stripping out the price candles and only looking at the moving averages.  I find that this type of analysis helps you focus on the dominate trend.  By knowing which way a stock is trending, you can increase your edge in trading by picking trades in the direction of the trend.

GS is clearly in a daily down trend and that suggests to me that if the market is going to fail at the 1340 S&P level, GS should be at the top of your short list.

Let's look at the updated GS chart including the price candles …

Goldman Sachs (Daily):

What a piece of doggy poop … some institution(s) are pounding this thing and want out.  Value buyers are showing no sign of being able to swing the balance of power back yet.  That will happen but it is best to not try and guess but to wait for the market to tell you it has happened or ideally is in the process of happening.

Cheers … Leaf_West

Before I start I would like to warn people that EWT is discussed in this post … I'm sure that it will bring out the haters but I would like to point out that the MOB/Elliott Wave driven target  of $135.00 – $135.25 was shown on Monday of this week and this morning's high hit right into the middle of the targeted optimal time zone to the minute (targeted time zone is the two vertical black lines in the MOB target).  So having said that bring on the ridicule …

(more…)

The more I look the scarier it becomes … LOL

Cheers … Leaf_West