Friday, July 23, 2010

MACD - CENTERLINE CROSSOVERS, CONTINUATION PATTERN AND A BULL FLAG [7/25 UPDATE]

[7/25 UPDATE]

SPX INVERTED HEAD AND SHOULDERS


Don't the two structures/patterns on the chart look pretty similar? Both sport positive MACD divergences as well. 

The second pattern may have already broken through it's neckline but I would say the 200 SMA would be a better gauge. 

On the chart, the labels P1-5 represent the peaks for each structure. They are labeled according to their similarity to one another.  

Obviously this has nothing to do with EW but just about pattern analysis.


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SPX DAILY CENTERLINE CROSSOVERS

This is just an observation that may or may not be helpful. Since the March 2009 bottom, there have only been 5 daily MACD centerline crossovers, including one today.

Following those crossovers, I have highlighted the resulting closing highs and the associated point gains since those crossovers.

All the other crossovers since today have come from very shallow crossunders except for the March 2009 low. Notice that the latest crossover started from a deeper -30 reading almost similar to 2009. More importantly the signal line turned and formed a positive divergence not seen at any other time.

These should be consider a strong bullish MACD signal. Couple that with the bull counts (and all the other alternatives) that I have presented and this would make the case for some further gains to the upside.

Here's a follow up to this chart I posted on July 7. Looks like we may have a break to the upside.









TRANS BULL FLAG

I posted this one a few days ago as well. Looks like it broke out of the flag.






Of the blogs that I read, many of the blog's viewers are still very bearish in my opinion. Many still hope and cheer for a market crash that might not ever come. I'll give it up to them for their perserverance but will continue to treat it as a contrarian indicator.
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