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






Wednesday, February 26, 2014

The SP-500, 1987 Projection Line and Monthly ADX

In the past the ADX has given early warning to extended market crashes. This time I don't expect it to act differently. 


In the chart above the Monthly ADX dropped below 40, or 35 in the case of 2007, prior to the final highs being achieved. When the monthly ADX gets above 35, only a close below 35 will issue a buy or sell signal. Once the ADX gets over the 40 mark, the 40 line becomes the buy or sell signal. Using this indicator on a longer term basis, while also following the weekly, daily and sometimes hourly indicators should keep me on the right side of the trend. Once the market broke above the upper red break line and the white 1982 projection line I knew it was targeting the 1987 projection, and this line only rises as time goes by.

In the chart above you can also see the markets reactions to previous trend lines. The market found it's 2007 high at the 1987 projection. It found it's 2002, 2010 and 2011 lows at the 1990 uptrend line. It found it's low in 2009 at the 1982 uptrend line. Once the market broke above the upper red break line and the white 1982 projection line I knew it was targeting the 1987 projection, and this line only rises as time goes by.

I am looking for the completion of the iii of 3 wave and I have a few cycle thoughts on that timeframe. The first comes from the equinox chart that shows market turns occur near the Spring and Autumn Equinoxes.


the Spring Equinox is March 20th, 2014. The VIX Cycle low is showing up March 10th, 2014. The 24th TD from the Q's low is March 11th, 2014. All these time signatures are aligning for something, what could it be? I'll keep you posted, but the charts ARE NOT reflecting a MAJOR decline at this time. I'll be looking for a drop to 1600 by July, 2014.

4 comments:

  1. Hello.

    So..the 1600s by the summer. Hmm, Well, I'm looking for that kinda level of course..along with a few other chartists, seeking a key econ-cycle low in the late summer/early autumn.

    From sp'1600s...what kinda upside are you looking for?

    I'm open to a hyper-wave, at least to the 2100/2300s..but maybe much...much higher.

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  2. Probably 2150-2350. We'll need to see where we end up on the drop.

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  3. Thanks for reminding me of the usefulness of the ADX. It is a very useful indicator that I often overlook and do not use enough. Nice simple rules and quite effective to track trend. I have noticed that you use it regularly. Do you have a preferred timeframe for using it or just daily and hourly?

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    Replies
    1. Got it - just had to re read your text;

      "Using this indicator on a longer term basis, while also following the weekly, daily and sometimes hourly indicators should keep me on the right side of the trend."

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