1/23 - MACD Cross- Missed It!

Weekly MACD 12/18/09

Weekly MACD 1/12/10

DOW Daily

SPX Daily

Remember the top chart? I posted on this topic several times with the top one being the latest. Link to post here.

At the time of that post, I showed a cross had occurred (which turned out to be incorrect) but quickly followed up with a correction on a follow up post.

Well I dropped the ball because I failed to follow up on this. As it turned out, (see second chart), she finally crossed the week of 1/10-1/16.

***Note***: On my second chart, for some reason my charting software was not displaying all the data on the weekly. However, you can see where the MACD cross occurred.

Look what happened the following week (this past week) just like all the other weekly crosses I had highlighted. The market gave back 3.8%. Up until this past week, when a weekly MACD cross occurred, the average decline was 4.4% the following week.

I have included daily charts for the DOW and SPX. It is clear, SPX broke through that trend convincingly. The Dow has broken it as well however so slight.

What does all this mean? I would suppose it confirms a top in the wave count and that most likely a multi-month decline is underway. This of course assumes that price behaves the same way as all the other weekly crosses.

1/22 - EOD Update

Where's The Right Shoulder?

Wow! What a day today! The evidence continues to build for the bears. It was an interesting day in the CiL (See the chatroom link below).

This is my take for now. The waves are not quite complete yet. I think 1072 is a good target for minute [i] because there is an open gap down there. But keep in mind 1085 will be a strong support level to break first so we must keep an eye on that.

Watch out though because (iii) could extend since it's the most common wave to extend. There is reason to believe this may be the case because by the looks of today, the move down should be considered impulsive. An impulse wave normally consists of 5 waves.

I only show 7 waves so far, which would imply there is some type of correction in play, but again, I think it is safe to say the move down today is not corrective.

Based on EWP, pg 32, 9 waves would indicate there is an extended wave within the structure. It could be wave 3 or 5. Either way, I'm looking for 2 more waves to complete this impulse lower.

If wave (iii) or (v) extends, then 1085-1072 may be exceeded.

Taking the 1150.45 high and a possible target of 1072 low for minute [i] a 50% retrace is 1114. Price broke well below the 50 day moving average. And where does that now sit? 1114! I think any retrace next week may find it difficult to get back above this.

Something else to keep in mind, Cobra mentioned in the past that there are something like 16 (lost count)open gaps down below. We may be heading down to fill them all.

My bottom chart is an update of the Bearish H&S pattern I'm following. The blue H&S target is near 1080 (very close to 1072). If price plays out as highlighted, this would then setup the red H&S piece.

If so, the bounce would be minute [ii] towards the 50 day MA and previous blue neckline which should now act as resistance.

I should be posting more over the weekend. Check back later!!

1/22 - E-Mini AM Update

I don't know what happened to the data for the chart but my wave iii disappeared. Anyway the rest played out last night and so far it looks like the H&S target was met.

The way I'm counting it, this may only complete minuette (iii) with a minuette (iv) retrace back to the neckline (past support should be resistance now and it would make a nice 61.8% retrace). If the count is correct, it should not retrace past 1127.75 or we would have a 4-1 overlap. And if that were to happen, the case for my alternate count would grow.

By this count, minuette (iv) does not have to retrace back to the neckline either. It can also hit the minimum Fib retrace targets of 38.2, 50 and even 23.6.

If minuette (iv) does play out, we may possibly see sideways action for the rest of today, if minuette (iv) takes on a triangle formation.

1/21 - SPX BEARISH FORECAST

Keep in mind I do have a bullish count, however the second chart is my primary and preferred count. I know I just provided a similar count on the previous post, but I wanted to isolate this count here.

I updated the bearish labels on the second chart and I think it goes well with the larger (imaginative) count that I have. The smaller degree count potential, coupled with an 1130 resistance level, a 61.8% Fib retrace level and an ascending trendline resistance level supports this potential market path.

Tomorrow will be interesting!