here's a chart from
jtverron the blog, I'm posting it as a snapshot since some of you
probably can't see his dynamicl chart since you don't have
memberships to Stockcharts.com
Posted by paulguest on 16th of Jul 2009 at 11:03 am
Matt,
quick question for you. Does your chart for the S&p inlcude
pre market points etc. For exl the s&p hit 924.76 today. Could
this be categorised as a minor wave 4 pull back and then off to
minor wave 5.
no pre market hrs only in that SPX cash chart. Yes futures were
down, but futures and 'cash' index are different. I would look at
market hrs data for analyzing cash index
Posted by fkarlson on 16th of Jul 2009 at 11:02 am
I am wondering what our new near-term bull chartists have to say
about two failed H & S patterns, that as of yet, have not
materialized, but for which they believe will fail. I am speaking
of the current one with the head at 946 SPX and then the larger
inverted pattern with the head at 666. If we fail to go down from
here to at least the lower 800 area, we are without a right
shoulder on the larger inverted pattern. This would make two large
H & S patterns failing. From my perspective this new sentiment
began just a few days ago with the build of our second right
shoulder to 930. I remain sceptical at this point. After all, we
could still go up to around 950 and form a double top and then head
back down.
There are so many variables that must be considered. We have
been talking about these two H & S patterns for several months.
Now within less than a week we have a new scenario negating the
prior. Does EW trump chart patterns? how about economic
fundamentals? Do we have enough data as of yet to make a clear
call? We shall see, especially after options expiration next
week.
regarding your comment, "what about economic
fundamentals". This is a technical analysis website, if you
try to incorporate all that stuff, you won't be able to
trade.
Keep it simple, just trade the charts. Fundamentals are
fine to discuss, but honestly
stocks really don't trade
on fundamentalsin the short and intermediate term,
they trade on emotion of
the masses,and
technical analysis (chart patterns, trendlines, etc) is
quite simply the study/analysis of that emotion or mass human
psychology.
Also, stocks generally form major tops when the fundamentals are
the best i.e. highest earnings and analyst rankings, and on the
flip side, they often bottom and rally when the fundametnals look
awful. Too many variables, keep it simple, just trade the
charts.
Posted by fkarlson on 16th of Jul 2009 at 12:29 pm
I understand your answer about fundamentals, but do not for one
minute think any of us are ignoring fundamentals.
The two H & S patterns that I mentioned are technical
analysis and have been supported here for quite some time. Does a
short bull run to the height of a second right shoulder on the
current pattern cause us to drop entirely the probablility that
these two H & S patterns will fail? If so, why? Are we that
convinced of our EW reading? I remain more cautious and somewhat
sceptical about the newer near-term bullish reading. That is all I
am trying to say.
Previously posted by burkmere (Title: Not so fast,
bulls...) :(
toggle)
Ord's still bearish and notes the lack of volume..now, I've
mentioned before he's often wrong, but we'll see..this from
decisionpoint.com and it's a free site so I assume it's ok to post
Ord here..
"Today’s rally in the SPY came in at 184 million shares. The gap
between 7/1 and 7/2 came in at 212 million shares and therefore the
gap test came in at 16% lighter volume and a bearish sign. The
market rallied higher then the gap and tested the high of the first
Right shoulder that formed in late June and volume again came in
17% lighter. Gap tests and previous highs tests on lighter volume
suggest false breaks and implies at some point the market should
reverse. Volume need to be at least 212 million shares today to
confirm the uptrend and that did not happen. There is another gap
higher that formed on 6/15 and the 94 level and the market may try
to touch that gap before this Right Shoulder is complete. Either
volume picks up here and confirms the uptrend or the next down leg
is about to begin. Since volume was lacking today the downtrend
scenario is still in our favor. This H&D has a downside target
near 82 and a 50% retracement of the rally from the March low would
give a target to the 81 level. We have another down side target
near 74 that is also a possibility. We will see how the pull back
unfolds in the weeks to come. We are short the SPX at 883.92."
However, another site I follow and he does
daily video updates similar to Matt and Steve ( and
he's been very, very good).is still in the "right shoulder forming"
camp.....also notes the "spike" low in the VIX..etc, etc..
I guess I'm more in the bear camp, too..but we shall see...
The rally from monday's low at SPX 875 has been quite
strong, nearly 50 points in 48 hours. With today's high reaching
SPX 934 it overlaps the entire decline from 932 to 869. Not exactly
what one would be expecting for a continuing downtrend.
In fact, the NAZ has already put in a trend reversal
and is now uptrending. The market is extremely overbought short
term and due for a pullback.
The answer to your question is YES - EW analysis does trump
since it gives us a guideline as to the RULES of wave counts.
The fact that this recent rally exceeded the previous rally (in
number of points) AND took out swing highs greatly increases the
odds that a significant low is in place. (see me chart and
comments from earlier this morning). The prevailing H & S
pattern on the SPX is still the daily inverse head and shoulders
that measures up to around 1050 ish. The market is dynamic
and subject to change at anytime but I also provided the technical
reasons for supporting the move as well as the factors that remain
in question. There are ALWAYS two sides to the market - pick
your side according to your trading objectives and play it based
upon your own triggers.
Posted by fkarlson on 16th of Jul 2009 at 01:28 pm
Thank you for your replies, Steve. This blog is very interactive
and for that matter educational and I do appreciate that--far
superior to experiences I have had in the past with other advisory
services.
You mentioned that the inverse H & S with the target at
1000+ is still operational. Would this be true if there were no
right shoulder? or do you see something else that is sufficient for
this? I am unclear on this point. I tend to be a swing trader and
so I do weigh all possibilities.
At any rate, your prior answer seemed to say that you regard EW
as bearing more weight than a possible H & S pattern.
Thanks Matt and again, jtverr. I do have the dynamic
link, but this chart really illustrates the waves and bigger
pullback. Of course you can't predict when or the exact level
it's going to rise or fall to, but this gives a great general
picture.
SPX chart from jtverr on blog
Posted by matt on 16th of Jul 2009 at 10:45 am
here's a chart from jtverr on the blog, I'm posting it as a snapshot since some of you probably can't see his dynamicl chart since you don't have memberships to Stockcharts.com
thank you
Posted by rjay on 16th of Jul 2009 at 11:24 am
thanks to both matt and jverr
S&P chart
Posted by paulguest on 16th of Jul 2009 at 11:03 am
Matt,
quick question for you. Does your chart for the S&p inlcude pre market points etc. For exl the s&p hit 924.76 today. Could this be categorised as a minor wave 4 pull back and then off to minor wave 5.
thanks
no pre market hrs only
Posted by matt on 16th of Jul 2009 at 11:12 am
no pre market hrs only in that SPX cash chart. Yes futures were down, but futures and 'cash' index are different. I would look at market hrs data for analyzing cash index
I am wondering what our
Posted by fkarlson on 16th of Jul 2009 at 11:02 am
I am wondering what our new near-term bull chartists have to say about two failed H & S patterns, that as of yet, have not materialized, but for which they believe will fail. I am speaking of the current one with the head at 946 SPX and then the larger inverted pattern with the head at 666. If we fail to go down from here to at least the lower 800 area, we are without a right shoulder on the larger inverted pattern. This would make two large H & S patterns failing. From my perspective this new sentiment began just a few days ago with the build of our second right shoulder to 930. I remain sceptical at this point. After all, we could still go up to around 950 and form a double top and then head back down.
There are so many variables that must be considered. We have been talking about these two H & S patterns for several months. Now within less than a week we have a new scenario negating the prior. Does EW trump chart patterns? how about economic fundamentals? Do we have enough data as of yet to make a clear call? We shall see, especially after options expiration next week.
fkarlson regarding your comment, "what about
Posted by matt on 16th of Jul 2009 at 12:21 pm
fkarlson
regarding your comment, "what about economic fundamentals". This is a technical analysis website, if you try to incorporate all that stuff, you won't be able to trade.
Keep it simple, just trade the charts. Fundamentals are fine to discuss, but honestly stocks really don't trade on fundamentalsin the short and intermediate term, they trade on emotion of the masses,and technical analysis (chart patterns, trendlines, etc) is quite simply the study/analysis of that emotion or mass human psychology.
Also, stocks generally form major tops when the fundamentals are the best i.e. highest earnings and analyst rankings, and on the flip side, they often bottom and rally when the fundametnals look awful. Too many variables, keep it simple, just trade the charts.
I understand your answer about
Posted by fkarlson on 16th of Jul 2009 at 12:29 pm
I understand your answer about fundamentals, but do not for one minute think any of us are ignoring fundamentals.
The two H & S patterns that I mentioned are technical analysis and have been supported here for quite some time. Does a short bull run to the height of a second right shoulder on the current pattern cause us to drop entirely the probablility that these two H & S patterns will fail? If so, why? Are we that convinced of our EW reading? I remain more cautious and somewhat sceptical about the newer near-term bullish reading. That is all I am trying to say.
I have answered your question
Posted by steve on 16th of Jul 2009 at 12:32 pm
I have answered your question below - PLEASE READ. Also check your inbox. There is nothing wrong with taking your view - just trade it accordingly.
Some may have missed these comments
Posted by steve on 16th of Jul 2009 at 12:11 pm
Ord's still bearish and notes the lack of volume..now, I've mentioned before he's often wrong, but we'll see..this from decisionpoint.com and it's a free site so I assume it's ok to post Ord here..
"Today’s rally in the SPY came in at 184 million shares. The gap between 7/1 and 7/2 came in at 212 million shares and therefore the gap test came in at 16% lighter volume and a bearish sign. The market rallied higher then the gap and tested the high of the first Right shoulder that formed in late June and volume again came in 17% lighter. Gap tests and previous highs tests on lighter volume suggest false breaks and implies at some point the market should reverse. Volume need to be at least 212 million shares today to confirm the uptrend and that did not happen. There is another gap higher that formed on 6/15 and the 94 level and the market may try to touch that gap before this Right Shoulder is complete. Either volume picks up here and confirms the uptrend or the next down leg is about to begin. Since volume was lacking today the downtrend scenario is still in our favor. This H&D has a downside target near 82 and a 50% retracement of the rally from the March low would give a target to the 81 level. We have another down side target near 74 that is also a possibility. We will see how the pull back unfolds in the weeks to come. We are short the SPX at 883.92."
However, another site I follow and he does daily video updates similar to Matt and Steve ( and he's been very, very good).is still in the "right shoulder forming" camp.....also notes the "spike" low in the VIX..etc, etc..
I guess I'm more in the bear camp, too..but we shall see...
The rally from monday's low at SPX 875 has been quite strong, nearly 50 points in 48 hours. With today's high reaching SPX 934 it overlaps the entire decline from 932 to 869. Not exactly what one would be expecting for a continuing downtrend. In fact, the NAZ has already put in a trend reversal and is now uptrending. The market is extremely overbought short term and due for a pullback.
The answer to your question
Posted by steve on 16th of Jul 2009 at 12:08 pm
The answer to your question is YES - EW analysis does trump since it gives us a guideline as to the RULES of wave counts. The fact that this recent rally exceeded the previous rally (in number of points) AND took out swing highs greatly increases the odds that a significant low is in place. (see me chart and comments from earlier this morning). The prevailing H & S pattern on the SPX is still the daily inverse head and shoulders that measures up to around 1050 ish. The market is dynamic and subject to change at anytime but I also provided the technical reasons for supporting the move as well as the factors that remain in question. There are ALWAYS two sides to the market - pick your side according to your trading objectives and play it based upon your own triggers.
Thank you for your replies,
Posted by fkarlson on 16th of Jul 2009 at 01:28 pm
Thank you for your replies, Steve. This blog is very interactive and for that matter educational and I do appreciate that--far superior to experiences I have had in the past with other advisory services.
You mentioned that the inverse H & S with the target at 1000+ is still operational. Would this be true if there were no right shoulder? or do you see something else that is sufficient for this? I am unclear on this point. I tend to be a swing trader and so I do weigh all possibilities.
At any rate, your prior answer seemed to say that you regard EW as bearing more weight than a possible H & S pattern.
Beautiful Chart Matt
Posted by curtis on 16th of Jul 2009 at 10:51 am
Thanks Matt and again, jtverr. I do have the dynamic link, but this chart really illustrates the waves and bigger pullback. Of course you can't predict when or the exact level it's going to rise or fall to, but this gives a great general picture.
yes jtverr'schart is pretty, that's
Posted by matt on 16th of Jul 2009 at 11:00 am
yes jtverr'schart is pretty, that's why I wanted to post it so that you guys can see it
I don't have the dynamic,
Posted by rogerv on 16th of Jul 2009 at 11:05 am
I don't have the dynamic, so I appreciate the clean chart. Thanks Matt