Yesterday, I said that the index was at the steep downtrend line again. And that bulls had to keep hitting at it to break it. It finally gave way and the index move above that line.
Breadth was good, volume was good, and the overall move since the low of December 5 looks impulsive
S&P moved above the neckline of the inverse Head & Shoulder we have been discussing. In doing so, it finally made a higher high.
It is overbought on shorter time frames. On daily, however, it has a lot of room to go if it truly wants to get overbought. I am going to wait and see how index behaves off its short term overbought readings before making a decision on whether I would take some long positions or not.
VIX is still sitting at its trend line
Daily VIX looks like it is setting up a symmetrical triangle, if so, the higher probability is a break to the upside, but it’s not a 100 percent thing, and I am just mentioning it so that we are aware of the dangers.
Technically the index is on mid-term buy signals. Since last Monday’s frightening drop, it has been acting very well. Not only momentum, breadth and volume have been positive, wave structure has been nice and clean as well.
It looks like a 5-wave structure, so odds are for a pullback.
In order to show why I am still cautious, other than the symmetrical triangle on the daily VIX, I will show you this count that argues we do not have a completed Primary A yet.
There are other ways that this incompleteness can be counted, important thing is to be aware of the fact that we do not have an uptrend yet, and there still are some important pivots that the index needs to capture.
I am not sure why so many are fascinated with picking tops and bottoms. I am even less certain about reasons why so many are afraid of losing a rally or a drop. things usually, if not always, develop in gradual steps. S&P has been gradually turning its technical profile from negative to positive. Let's hope it keeps doing the right thing.
Technically the index is on mid-term buy signals. Since last Monday’s frightening drop, it has been acting very well. Not only momentum, breadth and volume have been positive, wave structure has been nice and clean as well.
It looks like a 5-wave structure, so odds are for a pullback. I have been playing my pivots, in conjunction with waves and momentum, and they have served me well.
Three very important levels to me are 912 to the upside, and 850 and 770 to the downside. It should not be rocket science from here. If index behaves well and takes 912 and hold it, I may become a bull for a change. The onus, as I have repeatedly said, is on the bulls to prove themselves worthy of my capital on the long side of the market.
Three very important levels to me are 912 to the upside, and 850 and 770 to the downside. It should not be rocket science from here. If index behaves well and takes 912 and hold it, I may become a bull for a change. The onus, as I have repeatedly said, is on the bulls to prove themselves worthy of my capital on the long side of the market.
In order to show why I am still cautious, other than the symmetrical triangle on the daily VIX, I will show you this count that argues we do not have a completed Primary A yet.
There are other ways that this incompleteness can be counted, important thing is to be aware of the fact that we do not have an uptrend yet, and there still are some important pivots that the index needs to capture.I am not sure why so many are fascinated with picking tops and bottoms. I am even less certain about reasons why so many are afraid of losing a rally or a drop. things usually, if not always, develop in gradual steps. S&P has been gradually turning its technical profile from negative to positive. Let's hope it keeps doing the right thing.
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