Sunday, April 13, 2014
The weekly MACD has broken below the uptrend line from the March 2009 low. It really doesn't matter much to me, but it does show me I should be cautious. If you believe the move from 2009 is a large correction, the market has probably topped in an ABCXABC double zigzag pattern, which is marked as "or" then the wave label on the above chart. The cycle extended a bit just like in 2007.
If you are a bull, which is the wave count I'm following, you should be looking for a wave (iv) low to get long once again. that count is displayed on both the MACD and the chart.
To find where wave (iv) should bottom we need to use the fib ratios of the previous waves and look for a reversal zone. We also need to look at the time it took other waves to form.
The most obvious price for the SP-500 to find support is the 1750 area. When I look at charts of the Nasdaq and the Russell, both show a need to find support immediately, so who knows if the SP-500 can get that low.
Indicators on the Nasdaq and Russell have begun to enter areas where I start looking for reversals, the SP-500 and DJIA aren't even close. Therefore I will rely on the Nasdaq and Russell to find the turn and let you know when I see it.
Posted by James Genosky at 1:31 PM