06/29/12 – BUY THE DIP – QUALIFIED BUY © ™
INDEXES & INDICATORS
CHART LINK – at StockCharts.
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TWITTER UPDATES
MY TWEETS – If you follow my blog you should also follow my tweets as I’ll make important tweets in between blog updates. My tweets will contain buy/sell signals and up to the minute comments. If necessary, I’ll use multiple concurrent tweets to make my point. My twitter name is @BobsWaveCounts
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LAST BUY/SELL SIGNAL
Buy the next dip
Sold on ???
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LONG TERM – Up in black 3, chart #10.8
INTERMEDIATE TERM – Up in blue 3, chart #10.6
SHORT TERM – Up
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WHAT’S HAPPENING
Last time I said: “If we don’t significantly break the prior low (June 4, 2012), we should be in for a good rally back to the prior highs (or higher).”
We didn’t break the June 4th low and we didn’t work off the overbought. If we continue to rally in an overbought situation, we could be in for one of those lengthy constantly overbought advances. Those are the really good ones. If this turns out to be the case (???), we could rally straight to the election and then start a big correction (or worse). Lotsa bad things are possible but that’s a long ways off. If we are going to rally into the election, there is a possible target figure on chart #30.9 of 1555 or 17% above yesterday’s close. This is all a possibility until we are assured that the advance is solid.
On my last update, I was intrigued by the bottom that was posted on the next to last Fibonacci line. I have often seen this take place and expected the decline to finish on this line. The only thing that held me back on the last update was the overbought market. It now appears “POSSIBLE” the we could be entering an extended overbought advance. We should know the answer to that possibility soon. If the market turns and fades too far, too fast, the whole buy signal will be negated.
We do need to overcome the 1355 to 1360 SPX closing level. Until then this is a qualified buy the dip scenario.
If we see only two good looking steps down before resuming the advance, that’s what I call “I can’t wait advance”. It doesn’t form a completed 3rd step, or often the 1st step will be a higher high before turning down into lower step 2 and step 3. When this happens, it solidifies the idea that we are in a strong advance.
06-29-12 SP FUTURES 19 MINUTE BARS
Looking at the above chart, it appears that we completed 1st step up which was followed by a double bottom June 25th and June 28th.
06-29-12 SP FUTURES 155 MINUTE BARS
The above chart shows the complete decline and wave count since April 1st to the present. We likely have only completed step 1 up from June 4 through June 19. We should be entering step 2 up.
JEFFREY SAUT
Listen to Jeff’s Friday comments. We’re in agreement as usual.
Be patient, it’s almost 9 minutes long and take awhile to download.
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Jeffrey Saut of Raymond James is a very savvy guy and one of the few people that I follow. I found Jeff among the talking heads on CNBC, which is normally filled with worthless bobble-headed people. When I saw Jeff the first time, he was telling the audience different ideas than what everyone else was regurgitating. Immediately this catches my attention because I’m ALWAYS interested in anyone that has a mind apart from Wall Street. After listening to him over time, I realized this guy is smart, insightful and normally right on the mark. I find people like this very infrequently.
The website for Raymond James Investment Planning
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CONTACT INFO
Bob@Market-Trend-Observations.com
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Explore posts in the same categories: JEFF SAUT, SELL - BUY, UPDATE
Stock-Market-Observations 
July 2, 2012 at 8:19 AM
I don’t really have any valuable thoughts on fundamental problems as I gave up on fundamentals a very long time ago. My fundamental opinions are just guesses formed to work with my technical outlook. My guesses are usually wrong if my technical outlook is wrong also.
The decline, which came right on schedule has been well contained so far. We have 3 well formed steps down since last night and we just entered 4th step down, or are we in a double bottom rally??? Gotta wait and see about that one. The decline after 1st step was 20 points and 4 days. This one is only about 12 points and very quick.
Bob
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July 2, 2012 at 7:32 AM
Bob ISM came in at 49.7, first time under 50 since June 09. Your thoughts?
http://mam.econoday.com/byshoweventfull.asp?fid=451495&cust=mam
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June 29, 2012 at 11:40 AM
And we are now at the 61.8% retracement level from the April high to the June low. Seems like a good resting area, especially as we are drawing close to the 1355-1360 SPX overhead resistance area. This is a key level we must break through. The easier we cut through this area, the better things will look.
Bob
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June 29, 2012 at 11:20 AM
And today is obviously a “trend day”. Every hour is higher than the previous hour.
Bob
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June 29, 2012 at 11:06 AM
It “could” be useful. I would rather see what it shows on the next dip. It might not be useful to indicate a buy point because the market might never get oversold. The +DI or -DI might only return to the mid-point. It’s really an unusual overbought/oversold oscillator.
Presently, the 60 minute +DI is in the overbought area but the -DI is not on or below the limit line. I think the -DI is showing there isn’t a complete lack of selling, which would indicate skepticism and skepticism is good. The 20 minute ADX -DI is on the limit line presently. We could have a short correction on Monday or Tuesday setting up the buy point but we’ll see how that works out for real. The +DI or -DI lines don’t signal until they reverse direction and even then there can be many false moves as it oscillates near a temporary top.
I think a buy the dip is something everyone has to judge for themselves. Some people are content to buy in and hold for the longer term and others try to do the near-impossible and buy the bottom. Occasionally we get lucky and hit it right but it’s just whatever feels right for you. Most important is to not miss the boat if the advance resumes.
STOPS are always in place to protect you against making the wrong move. In this case it would be buying and having the market continue to fall negating the buy situation.
This whole thing can still be a flash move and next week will tell the tale. The blog buy was a warning to dust off your money and stand by for action.
I had a friend buy on Wednesday because he thought the Supreme Court was going to toss out Obamacare. How is that for falling into it and coming out smelling like a rose??? The big problem with what he did was buy on an emotional viewpoint and that is always dangerous. But lucky is often times better than being good.
Bob
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June 29, 2012 at 10:38 AM
Hi Bob the ADX 60 minute chart is in the sell area. Would you use this chart to determine -buy the dip?
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