The DJIA 200 dSMA and long term uptrend continue to hold however today's low close does not favor the bulls going into next week. Interestingly, the volatile down/up/down price action during the past three sessions resembles the three day price action immediately preceding the simultaneous 200 dSMA and uptrend break during October 2014 as follows; 10/7/14 -269, 10/8/14 +288, 10/9/14 -340 vs. 1/28/15 -211, 1/29/15 +221, 1/30/15 -252. The next days close on 10/10/14 confirmed a simultaneous uptrend/MA break and within days per an intraday basis the DJIA declined 700+ points. Break or Bounce? Early trade action next week should provide the answer.
-100, +100! Can't help but notice those gargantuan gaps and I presume, reluctantly, that professional money managers hold this security overnight. Yet another example of pure bubble mania price action.
Yes, it's the same old routine and you mentioning it made me laugh, thank you... BTW: I've observed that profiting from predictability makes boredom significantly more tolerable.
Is this starting to look like 2008? Yes, it somewhat does. The SPX is positioned directly on a rather significant uptrend line that has held since ~ March 2013 and it's also nearing its 200 DSMA. The long term uptrend remains in tact however a break of these support zones could lead equities into an aggressive selling phase. The current situation may somewhat resemble November 7th 2007 when the SPX broke the 200 dSMA followed shortly after by a long term uptrend line break in January 2008. The 200 dSMA was re-tested with failure from underneath on 5/19/2008 and the rest is history as the US equity markets declined over 50% within 6 months.
A break and close below the 200 dSMA @ ~ 17,000 will not bode well for US equities but so far the markets are holding and the long term uptrend remains in tact. Pay attention to the closing prices today and tomorrow as they could be an indication of lies ahead near term. A confirmed support break may lead the markets into an aggressive liquidation phase which would likely target the October 2014 lows.
Tom O'brien at TFNN seems to suggest that a downside resolution is likely followed by a test of the October 2014 lows. His conclusion seems based primarily on volume comparisons.
Watching support @ ~ 17200 and today's close. An intraday reversal remains a possibility. FOMC results may determine near term market direction. Expecting a strong move to either direction, but favoring a bullish resolution as the markets continue to advance within a well established long term uptrend.
True, but the VIX dropped to 11.50 on 9/19/14 and in less than a month the SPX declined ~200 points, 9/19/14 ~ 2019 to 10/15/14 ~ 1820 -- the VIX peaked above 31. The US markets are in the middle of a trading range and the FOMC meeting results will likely be the resolve.
Indeed, the markets have bounced and when considering today's robust rally the general sentiment should be nothing less than bullish. The DJ transportation average appears primed to make new highs but that verdict is still out. As mentioned in previous posts this could all change on a dime, but until then the rally hats are on...
Looks like a bear wedge pattern may be developing with current prices at an apex though WHR continues to maintain a medium term uptrend. A downside break could happen any day, supported by several recent bearish daily candlestick patterns. Examples: 1/9/15 doji, 1/12/15 bearish engulfing, 1/20/15 dark cloud cover, today (closing dependent) another doji. Resolution should be known very soon.
Primarily agree however upside resistance may occur at the previous high per 12/29/14 @ ~2093. If the SPX breaks out making new highs then the 2130 projection seems a reasonable target as it is within the upper boundary of an uptrending channel pattern. On the downside it's clear that the 2000 price level is a significant support zone. Some are anticipating an inevitable break of this zone followed by a market descent to the October lows. e.g. Tom O'brien @ TFNN. Thus far the SPX continues to trade within near term support and resistance while the long term uptrend remains in tact.
It will be interesting to see the markets reaction tomorrow. Will they sell they sell the news? If so then all has been priced in and the markets will likely break key support levels and test the October 2014 lows. If the markets bounce here, then the bubble continues to bubble.
Probably down a fraction pre-market and early trade followed by an intra-day reversal transitioning into a continued rally for a couple days in anticipation of the Jan 22nd ECB QE announcement. In the near term a break and close below ~ 197.86 will not bode well for the SPY and general US equity markets. This rather significant support level is the result of the following lows: 12/16/14 (197.86), 1/6/15 (198.85), ~1/14/15 (198.57). If this primary support level breaks the next likely target for the SPY will be @ ~ $190 (3/14 - 5/14 resistance zone and 8/7/14 support level). And of course if this last support zone cannot hold the SPY should then test the 10/15/14 lows @ ~ 182.
The DIA and general markets have closed beneath their aforementioned uptrend lines favoring lower prices near term. A breach of the 1/6/15 and 12/16/14 lows would then target the 200 dma. Trading beneath this range should lead the markets into a test of the 10/15/14 lows. Conversely, support at the 200 dma or higher could create a bullish consolidation pattern but this scenario will likely only develop after an initial near term down-move.
Break or Bounce: The bounce scenario appears to have unfolded. A continuation of the current uptrend should initially target the 12/5/14 high @ 17991. If this level is breached then the most recent high of 12/26/14 @ 18103 should be challenged. A breakout of these levels will place the DJX/DIA and general US equity markets into new highs but all may find resistance at the price levels originally mentioned at the beginning of this thread ~ DIA 183-185. In the meantime a reversal pivot price level is currently the low of 1-6-15 @ ~ 17262.
Currently the DIA has broken the intraday lower trendline per 10/15/14 and 12/16/14 session lows. A close below the line will favor a continued descent initially targeting the 12/16/14 intraday low @ 170.74 then the 200 dma @ ~ 169. If these levels are confirmed broken with conviction the next likely support will be the 10/15/14 intraday low @ ~ 158. An intraday rally above the trendline today 1/6/15 would favor a bounce scenario and would likely initiate the next leg up. Today's close is important.
If one plotted the following intra day session lows: 10/15/14; 12/16/14; and 1/5/15, one could observe that the DIA, NAZ, and S&P are positioned virtually on top of their respective bear wedge lower trend lines. Though the higher resistance levels prediction may not occur, the bear wedge pattern may unfold. Trading action near term should be telling as a close beneath the lower trend line will not bode well for the US equity markets while support at the line may indicate a continuation of the current uptrend.
The DIA trend continues to advance however a possible bear wedge pattern is developing per the 10/16/14 and 12/16/14 lows and 9/19/14 and 12/5/14 highs targeting ~ 183. If this price level is surpassed, further resistance may occur at an upper trend line per the 5/28/13 and 12/31/2013 highs at ~ 185. A possible near term outcome involves a continued DIA advance to the 183-185 price zone that should occur within 2-4 weeks at which time market conditions will be overbought naturally triggering another correction. It would seem improbable that the general markets can continue higher without yielding to some form of correction in the near future.
Another pull back to ~$27 on VXX could be a great volatility buying opportunity. The chart pattern would be interesting appearing to be a non inverted head and shoulders bottoming formation. It's highly likely I will take a VXX long position if such price action unfolds especially if it occurs during early to mid January 2015. I will follow up on this post as time progresses.