SP-500 DAily

As of now, the RSI has broke it's uptrend line and the StchRSI has broken below the trigger sell point.

SP-500 Daily StochRSI Signal

I have updated the StochRSI chart to include the signal line. Breaking below the horizontal line will be a hint that we have topped.

SP-500 Daily Update

The SP-500 has entered into the low end of it's Fib Resistance Zone by reaching 1770. The zone runs from 1770-1820 and is where I expect a correction to form. As of publishing after the close, all daily indicators are still on buy.

Charts:

 The negative divergence in the +DI has disappeared. The ADX is approaching the zone where a rollover will either mark the top or the top will form within 20-40 pts. of the rollover. This indicator gives better signals when the rollover occurs above the yellow line. I will be watching this daily since we are also inside the FRZ.

 The MACD is approaching the top of it's uptrend channel. I don't really care about that. I want to see it break it's uptrend line or put in a -div.

 The small break in the original RSI uptrend line was exactly what I thought it would be. A pause before a new uptrend line and higher levels. Once the new uptrend line is breached we should be short again.

StochRSI is in bullish above territory and on it's uptrend line. There should now be a horizontal line at the prior low of the StochRSI and I won't short until that is at least broken.

Good Luck!

Jim

SPY Update - Stopped Out

I was stopped out of my SPY short on the close @ 175.95. Flat SPY.

SP-500 Daily UPDATE

The SP-500 is again getting overextended. I looked for long positions back on October 9th and am now focusing on getting some short positions going. Looking across the daily indicators, the SP-500 remains in bullish territory. I did get a short term trend change to down, but short term signals are rarely reliable.

Let's look at the charts.

The ADX is still trending up, which is bullish. The +DI has entered overbought territory. A negative divergence in the +DI would be a great place to get short. Or I'll be shorting a rollover of the ADX which hasn't been entering the 35-40 range recently to mark highs and lows. We must adapt this indicator and jump the rollovers.

 Based on the MACD readings I am adjusting the daily count. The green 3 on the chart will be moved to the right and take the place of the white b. This makes the count an ending diagonal for green wave 3. The green 4 is still in the correct position, and we're now rallying in Green wave 5. The MACD is suggestive of a triangle from June to October. This still doesn't change the count much, but I like having things correct.

The RSI broke the uptrend line already, but at that time I pointed out how is has done this in the past and go on to reach new highs (circled on the chart). It did it again. This time it has broken the new uptrend line. We need to follow this indicator to see if it's going to produce a new uptrend line or not.

The StochRSI is close to breaking its uptrend line, but remains in the "bullish above" territory. Again, we will follow the indicator to see what it has in store.

The Strong FRZ lies at 1770-1820. Expect this area to cap the move up and cause at least a 200 point correction.

SPY Update

SPY has taken out it's previous swing low at 174 so the short term trend has changed to bearish while below 175.94. In other words, I am now short SPY with a 175.94 stop-loss on the trade.

Chart:

DJIA - First Batch of Puts Entered

DJIA ATR is hinting at a high today by dropping down to the 30 level and reversing. The prior times are marked on the chart.

Chart:

Position:

Entered at 10:24 when the DJIA was trading @ 15,514.

ST SPY Update

Last week SPY retraced to the minimum level for what I have labeled as wave B, which was the 23.6% retracement level.

Previous Chart:

I currently have today as wave iv of C. All daily indicators are still on buy. A drop below the 67 sma on the 10m chart will probably be the conclusion of the wave iv of C then a new all-time high will be wave v and shortable. Will keep you posted.

Updated Chart:

USD/JPY ***NEW TRADE ALERT***

I have entered limit oco orders in to sell USD/JPY @ 99.054 with take profit level open for the time being. and Stop-Loss level of 99.80.

The area I'm selling into contains wave 5 = wave 1, wave 5 = .50(waves 1 + 3) as well as the .618 retrace of the move down off the highs. The two fib resistance zones are highlighted in the setup chart.

Setup Chart:

I'll set my initial take profit level at 96.00 the figure, but it may turn into greater downside. Will monitor.

SPY & USD/JPY Intermarket Analysis

SPY and USD/JPY look like they're ready for a pullback after completing 5 waves higher from the lows. In SPY I currently have the rise from the lows labeled as an A wave which means I'm expecting a B wave lower. B waves tend to hold within a 23.6 and 38.2 retracement of the move higher, hence the box location on the chart. We'll monitor how it reacts to those levels and trade accordingly.

Charts:

Buying Next NEW lows in DJIA and SPX

....

EUR/GBP - Long Term Trade Alert

I am setting a long term buy on EUR/GBP. Be careful with this one, pip values are $15.90 vs. the typical $10 (or $1.59 vs. $1 for mini's). There is a possible inverse Head & Shoulder pattern setting up, along with and Elliott Wave count that looks correct. 

I am buying at current levels - .84700 with an .8330 stop-loss and a .9200 take profit level, which will probably be adjusted UPWARD as time goes on. I plan on leaving this trade open for a long while, therefore, I suggest reducing the amount of money you use to typically enter a trade. On these long term trades we look to make a lot of money from a minimum investment. If you typically trade 1 standard contract, I suggest you trade 2 or 3 mini's on it, etc.

RISK: .8330 or 140 pips or $2226 per standard contract.

REWARD: .9200 or 730 pips or $11,607 per standard contract. 

I will be trading 5 Standards on this trade.

Charts:

Monthly:

Daily:

Hourly:

SP-500 Daily Count

I'm still expecting a higher level once this correction finishes, but we always need to adapt to the market, not the other way around.

Currency Update

Sold EUR/USD and GBP/USD ATM, added to USD/JPY long and adjusted stop-loss up to 96.50

USD/JPY

Yesterday I got long USD/JPY @96.76 which is currently green by about 30 pips, nothing to brag about yet. Looking to the daily chart we have what seems to be a triangle and that's the way I'm playing it for now. This has bullish implications for the SP-500 since these two markets have been highly correlated in the past. USD/JPY is well within it's upward channel still and has entered the buy zone shown by the two horizontal white lines 3 times now.

There are two counts I'm following. The first says the move from the high is a major A wave followed by a triangle B wave. If that count is correct, we are terminating the D wave and should head up to the 100 level. The other is the more bullish picture I painted above where the whole correction is a 4th wave triangle and we should head up to the 105 area in the 5th wave. Under that count we are finishing the E wave of the triangle.

This wave lower consists of an ABC W wave which was a typical zigzag, followed by and expanded flat X wave, a wave up, b wave that went below the start of the a wave followed by a c wave which ended much higher than the a wave. The last wave of the formation, the Y wave, seems to have formed an ending diagonal triangle and broke out overnight.

All of this is happening within a Fib Support Zone of at least 6 Fibonacci levels that should support this pair at least in the short term.

Best of luck,

Jim

SP-500 UPDATE

I still believe the SP-500 is in a flat or extended flat pattern for the green fourth wave before another thrust higher. The index is still within it's red upward channel and should find a low near 1627 or 1597. All daily indicators went on sell Monday, September 23rd and have stayed on sell up to tonight. There hasn't been much downward pressure on the market, but I am watching a few other indicators to get a sense of what's going on. 

The MACD on the SP-500 is still in a downtrend, and will only give a buy signal once it breaks above that line. As you can see from the chart, the MACD is far from being oversold with larger corrections dropping below the -8.00 line and put in a triple negative divergence on it's last high, which is extremely bearish. We need a large move to the downside, and soon, for the SP-500 to maintain downtrend status.

The same negative divergence showed up on the EWOsc, and like the MACD, which this indcator is based off anyway, it too is far from oversold. In fact, it has yet to even cross the zero line.

The RSI is getting close to oversold, but more often than not, after crossing below the 30 green line level, the market will produce a lower level with positive divergence. We should not look buy until that happens or we get a buy signal across the other indicators.

The StochRSI is still within it's downtrend channel and has finally reached the bearish zone, where it will reside until the market should be bought. The buy signals come from breaking over the downtrend line AND breaking above the "Bullish Above" line near 40. Again, we need to watch how all indicators are acting at that time.

The ADX is showing the whipsaw range of the market. The last 4 signals have not reached the yellow caution line on the chart, but buying or selling the rollover is still working. The -DI is still above the +DI but one day can change that. The ADX is showing NO TREND being under the white line at 20. When the ADX reaches these low levels it means a big move is coming soon. To take advantage of that move we watch the DI's once the ADX starts making higher levels. If the -DI is still above the +DI after two consecutive uptick days in the ADX we sell the market, if the +DI rises above the -DI after two consecutive uptick days in the ADX we buy the market. I will be watching and keeping you posted.

The BPSPX gave it's first red bar on the Renko chart today. The previous red bars are shown with the vertical blue lines on the chart.

The current markets conditions are mixed. Per the previous signal we should be short from September 23rd, but the downward action is less than stellar. It is prudent to preserve capital while the market whipsaws until we have a clearer view of what it wants to do.

If you're short, I would maintain the short position. If you have no position I would sit on my hands. If you're long, your odds of being correct are less than 50%.

FB: Losing 20% Over the Next Few Months

FB got close to it's price objective of the 1.618 extension of wave 1 and is in the topping area for this move. Over the next few months we should see a retracement of the 3rd wave move up down to the 37.50-40.75 area where there are the 38.2 and 50% retracement levels of the third wave.

Chart:

EUR/USD Open Trade

Adjust stop-loss to 1.35400 locking in 45 pips of profit.

Chart: