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CURRENT MARKET TREND: Up 5/27/16 @ 2090
Stop-loss 2026






Thursday, September 19, 2013

An Apology to the Readers

I wanted to apologize to the readers of this blog. Although I caught the lows on the SP-500 and DJIA almost perfectly, I took profits and re-shorted way too soon without an confirmations from my favorite indicators. I had wave 2 blinders on and focused more on what I believed to be the correct count and not enough on the indicators. The charts were clearly displaying buy signals on September 3rd around 1651 which means I should be 100 pts in the profit instead of stopped out of short positions for losses.

All of the daily indicators at this point are still bullish, but many are becoming overextended. Let's go through them.

SP-500 MACD:


The MACD gave the buy signal and is rising back to overbought conditions. It is also testing a downward trendline connecting the former two MACD tops. A market top may be near.

SP-500 RSI(14)


Again, the RSI gave a CIT (Change in Trend) signal, with positive divergence, and has now risen to an overbought level. A break of the upsloping trendline will give another CIT.

SP-500 Stoch RSI 34:


And again, the Stoch RSI gave a buy signal both when it broke the downtrend line and when it crossed above the 40 level as annotated on the chart. It is now firmly in the bullish zone and only a break below 66 will cause a sell signal.

SP-500 ADX:


And my favorite indicator rolled over near the 35 level implying a trend change was happening, a buy signal. The ADX didn't correct down too much before starting to rise again, showing the strength of this current uptrend. It is, however, getting close to the signal area, so any rollover in the next week or two I will sell into.

Again, I apologize for the terrible trading this month. By looking at your past mistakes you can avoid them in the future. I usually don't get overly involved in an Elliott Wave count and ignore everything else, but on these trades it happened. My objectivity was blurred and I will do my best not to let it happen again.

Moving on.

We are at a crazy confluence of time and cycles. There is a OPEX high/low cycle that has been close in picking tops and bottoms. The last cycle was a low, so this cycle should complete as a high. There is also a VIX cycle which bottoms near 9/20/13. On the charts above there are vertical lines which have marked some significant highs in the past. The next vertical line in this series shows up tomorrow, September 20th. We also have the Autumn Equinox taking place and equinoxes have proven to reverse current trends in the market. Finally, the One Indicator chart is definitely looking a little shaky.

Equinox:



Similar Conditions (One Indicator):


The other charts are located on another computer, so I will publish them tomorrow.

VIX Cycle:


OPEX Cycle:


5 comments:

  1. Interesting stuff.

    Yet...the market has never seen a significant drop whilst QE continued.
    --

    The current setup is NOT analogous to Sept'2012, when there was no QE-pomo (started Jan'2013).
    --
    Regardless..good wishes,

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  2. Great charts Geno (just wish I had better eyesight :-)

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  3. Hi, I' m new to this blog, but I think I will follow it for a long time because it seems pretty good to me and I' m not a novice in this business. I just wanted to say....no need to apologize I think. Your market analysis is pretty good imo and mistakes once in a while are part of the game. Thanks for this blog. I will always sign as ''andr'' because I don' t have a google profile and don' t need to create one. In the upper part you will see ''anonymous'' but at the end of my comments you will see ''andr''. To make you know it's me....Thanks again

    andr

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