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SPX 3 drive pattern. If you link back and look at the link on that post, it shows that a 3 drive pattern can end at the 1.27 extension.
I should have paid more attention to that area.
The second drive had a move up to the 1.618 and put in a double top.
Daily VIX maybe a spike to the 41-47 level is in the cards and would likely happen before the end of FEB.
SPX/NDX/DJI/TRAN/RUT daily charts.
Once again you can make a case that this is a typical pullback into the daily 50 EMA that we have seen many times before.
This SPX chart is where I got the idea that the market was most likely to peak closer to the end of Jan.
NDX looks like it could have topped in late Nov.
DJI still above the 50 EMA but forming a spike and channel pattern inside the bigger green channel. In my opinion a spike and channel pattern is also a topping pattern. The RSI is also diverging with the recent new high.
TRAN did not put in a new high along with the DJI and is also showing a potential Head and Shoulders topping pattern.
RUT did not put in a new high along with the SPX and the 50 EMA crossed below the 200 MA.
Big boy daily charts
You could make a case that some of these are getting oversold or at a trendline support or 200 MA support, however except for AAPL they pretty much are all starting to fall below the blue 50 EMA and the RSI on almost all of them is below 50.
So overall I don't like the looks of them and with the theory that breaking below the 50 EMA is a sell signal for many traders, it's not looking good.
FB
AMZN
AAPL
NFLX
GOOG
MSFT
NVDA
I honestly am on the fence right now. Looking at the 4 hour chart of the SPX I can easily make a case that this is a normal pullback back into the 50 EMA and a good place to buy the dip.
And EVERYTHING was red on Friday even the VIX was down 4.3% What's up with that?
Not to mention that we are still inside the long channel.
I posted this chart earlier. But I agree once we start to break the channel we are in for a bumpy ride.
I thought that the market was going to stretch this out until mid Feb with its uphill grind, but things are definitely on the edge of falling off the cliff.
I think we are in a topping process for at least a 10% correction. The big question is if they are done shaking the tree yet?
If you look at the time cycles on the RSI at the bottom of the chart, the blue flags are the center of the cycle and the red circles indicate times when we saw a quick dip and then a move higher.
Once again we are seeing that happen. Obviously this could go either way as always, but it's not something out of the ordinary.
Got lucky last night.
Right before bed I saw price hit what looked like a potential 345 target so I took 2 contracts at 4668 at the fib 1.618 and set two targets.
I am realizing that I do my best trades at night because I set it and forget it and let the chart do it's thing. Often times during the day I will second guess my decisions and start adjusting my targets or stop losses.
Ravi, that last post had a chart of a spike and channel and inverted head and shoulders on it. They both have aprox the same upside target of 4715.
However if they fail and take out the stop losses, there will be a bit more selling to come and a lower price.
Overnight price did hit 4668.
Still range bound. 15 minute chart still shows that the price is bouncing between the yellow lines.
I call the middle area at the purple line the no trade zone because price can bounce either way up or down.
Best trade would be to look for a move down and then look for a bounce pattern or look for a breakout to new highs.
This is what I have learned from the Wycoff theory. It is merely a time where the big boys are either reloading for a move up or selling for a move down.
Just like Elliott wave, could go either way. That is where patterns come into play for me.
Patterns give you an exact buy trigger/stop loss and profit target.
Even if you have some basic rules based trading strategy that just uses the 50 EMA and RSI
Wait for a bounce off the 50 in either direction with a bounce off of the 50 level in same direction as the trade off the 50 EMA
This is why I started to just do price action trading and have just about stopped watching all videos. Everyone has an opinion and way of trading.
SPX 4 hour time cycles & RSI
On the weekends I like to look at different things. Today I decided to look at time cycles on the RSI.
I marked the top of the time cycles with blue flags both on price and RSI
Then I put green flags on the high point of price before the pullback.
If you link back to my VIX chart I posted earlier, it suggests that the market could top around the end of Jan or early Feb, with a market bottom in the first to second week of march.
This next chart would suggest that the market bottom could be as early as Feb 15th - 16th and that would put a market top closer to mid to late Jan.
Again history has shown that a 10% pullback can only take as little as 2 weeks to happen and then it's off to the races again.
Also I am noticing that the RSI is starting to look like it's compressing more now going into this month, which could also suggest a bigger move is coming once it breaks out.
If the cycles come close to repeating, it would suggest that we still haven't reached the high price yet for this cycle since it has normally came after the blue flag top of the cycle.
Gaps and breakouts to new highs.
This chart shows that when price makes a new high above the yellow line, and there is a gap in purple under it and price is above the blue 50 EMA, then the gap doesn't often get filled right away.
This just suggests that you have to be careful in an attempt to play a gap fill on a strong bullish market.
VIX I have posted before that it looks like another VIX spike will be at the end of Feb.
With that in mind, I am also considering that the market may finally pull back by 10% as well.
From a time stand point, I would be looking for the VIX spike by end of Feb and history shows that a 10% drop can happen over a 2 week period.
So that would put a closer top in the market around the end of Jan to the beginning of Feb.