Stock-Market-Observations

INDEXES & INDICATORS

CHART LINK – at StockCharts.

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CONTACT INFO

Bob@Market-Trend-Observations.com

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TWITTER UPDATE

BobsWaveCounts is my twitter name.  If I have a buy/sell signal and it’s late at night, I’ll tweet.

If I don’t blog or tweet, I’m busy or out of the loop.  Sometimes I elect to sit and watch instead of trying to trade.  This is where the Bressert long term core positions keep you in the market even when you drop out.

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LAST BUY/SELL SIGNAL

Bought on Thursday 5/11/12 at 2:36 AM EDT

Sold on Friday 5/12/12 (and shoulda shorted)

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LONG TERM – Up in black 3, chart #10.8

INTERMEDIATE TERM – Reversing Upward???  Is the correction after blue 2 up, chart #10.6 finished???

SHORT TERM – Reversing Upward???

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WHAT’S HAPPENING

The recent bottom (June 1) came as anticipated by the SPX trendline (page 1, chart #10.6).  In the chart below, note primarily the first chart, SPX, and the trendlines.  Two of these trendlines were drawn on the SPX chart a long time ago.  The lowest trendline was drawn after the one above it was penetrated in late May.  The lowest trendline was thought to be the last bastion and to date it has been the terminal point in the decline.

06-15-12 SPX DAILY BARS

The count appears to be correct for a downside reversal (see chart below).  Presently the rally has not broken the “look” of the downtrend.  Presently it looks like another rally in the downtrend.  If we have a completed and correct 3 count, the rally must be much bigger.  Naturally if we turn back down, the count will be classified an extended 5 count.

06-15-12 SP FUTURES 200 MINUTE BARS

Here is a close up view of the trendlines drawn on the above chart.

06-15-12 SPX FUTURES 45 MIN BARS

A scary long term chart follows.  Note the trendlines on the first chart, SPX.  The lowest trendline is the primary line connecting the bottoms.  The top trendline shows a “possible” long term peak around April 1st.  This is probably only a resistance area and will be overcome if we remain in a primary bull market.  Only a failure to achieve new highs will validate this trendline reversal.

06-15-12 SPX WEEKLY BARS

The verdict is that I expect more rally.  Is it possible I’m wrong, CERTAINLY.  And that’s the reason why there is no formal buy signal.  This is only the warning of a possible reversal in progress.

Presently the markets are expecting the FED to provide more stimulus.  The FED announcement is scheduled for next Wednesday.  If the markets don’t get the expected news (Wednesday or earlier), the reaction could be disappointment and an immediate selloff.  BUT . . .

“IF IT’S OBVIOUS, IT’S OBVIOUSLY WRONG” – Joe Granville

Disappointment in the FED would be ignition for a resumed decline but the Joe Granville quip could be the kicker here.  Of course if the FED doesn’t disappoint, the market will have ample reason to rally.  A scenario for the Joe Granville quip and disappointment would be an immediate sell off on Wednesday followed by an early reversal.  It would be another one of those false breakouts meant to suck the bears in.

The EU situation certainly looks like an explosive situation and how the market will rally in the face of a disaster is dubious.  Long term, it seems certain that some of the EU countries will withdraw from their support of the Euro.  So we watch elections taking place all over the world in the next few days.  It’s hard for me to see fundamental reasons for a rally but that has often been the case in the past.

These are only possibilities and quick reflexes are a must for anyone trying to maneuver this market.  Stops are always mandatory and these could easily be taken out by a false breakdown.  So be alert.

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This entry was posted on June 15, 2012 at 11:15 AM and is filed under SELL - BUY, UPDATE. You can subscribe via RSS 2.0 feed to this post's comments. You can comment below, or link to this permanent URL from your own site.