Thursday, January 31, 2013

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A daily close under S&P 500 (SPX)1502.96 will validate a TD bearish price flip albiet it it doesn’t seem bearish as the market is not trading down impulsively. SPX probed as low as 1496.96 hitting short term micro targets. The total Put/Call ratio registered 1.10 roughly at the same time.  Extreme number like that will likely contain the downside. What needs to happen and tomorrow may be the catalyst is for the market to gap down hard and causing market participants to buy the dip which actually fuels the downside. The flip side is the bears finally capitulate with a gap higher making the them too scared to short. If this market continues to slow drip, another move to a higher high is probable.

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As the market is meandering around, this would be a good time to address different DeMark platforms to use. As far as I know, Think or Swim is the only free trading platform that has DeMark indicators built into their study set under “Sequence Counter”. It is a bare bones TD Sequential that does the job but I have noticed it is not perfect as shown by the PowerShares QQQ (QQQ) chart. For those looking for an advanced DeMark platform, you can go to http://www.marketstudies.com/ and there is a better array of DeMark services there but at a cost. For Bloomberg users, the DeMark platform is quite impressive, especially the TD Re-Search which scans the whole market universe for results. If you are a Bloomberg user, I would beg and plea to your purchasing department for the Bloomberg DeMark add-on. One other item. A big advantage of notating manually as you may noticed on some charts is sometimes the 8 count matters than the completed TD Setup 9 count. On the built-in packages, if there is no compete TD Setup, the whole count disappears off your screen. I rather see some 8 counts remain on the screen just for for reference. There is value in eight counts as early DeMark analysis started out with 8’s and 13’s to keep in line with the Fibonacci sequence but later settled with a 9 as it worked better.

Going to stay with the plan but it is tough to stay short as tomorrow’s jobs number could be a difference maker between a quality selloff or one capitulation wave higher. This is why it is called trading. (update mid trading day)

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