Tuesday, March 12, 2013

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It needs to keep pushing a few more red bars for the combination of the TD Sell Setup and the TD Sell Countdown on the four hour S&P 500 (SPX) chart to claim success. Looking forward to getting more data to see how all this unfolds. 

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To extrapolate the primary outlook, there are two different forces at work. The first is what the DeMark indicators are saying. With completed TD Sequentials across daily and weekly charts and soon to be monthly charts, the DeMark red flags are getting redder and signaling the markets are free to fall anytime. From the Elliott wave picture, it’s a bit subtle. The rally from SPX 1485 looks more like three waves higher with a possible four wave starting now. If so, another high to challenge the SPX 1565- 1568 target should occur to complete the five wave package. This potential five wave structure will stay valid unless SPX 1525 is breached. If breached or even getting close to the 1525 marker, we can also explore different possibilities including a five wave truncation. 

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Facebook (FB) is in the Keltner/Bollinger channel where it measures the coiling effect before volatility is unleashed. Technically, there is also an unperfected DeMark TD Sell Setup. If FB can record a bar that is higher than 28.68, that would indicate an exhaustion point. However given the Keltner/Bollinger factor, an upward breakout would indicate FB will go into TD Sell Countdown rather than record a high equal/greater than 28.68 and head lower. (updated mid trading day)

 

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6 Responses to Tuesday, March 12, 2013

  1. Emrul Islam says:

    Learning a lot from your updates. Thank you. I do wonder, with a lot of DeMark and Elliott Wave followers participating in the market, who is buying up here and why? Cannot be technically clueless retail traders so I’m left wondering, could this be a turning point in market philosophy?

    • Art says:

      Great question. I believe that markets evolve and traders need to adapt to them. Remember when volume was a huge part of technical analysis. Now we have to speak in terms of relative volume. Even the AAII sentiment behaviour seems to be changing. I could see this becoming more of a coincident indicator in due time. I believe it’s the flow of information that is so widely available that eventually closes the gap between the perceived dumb money vs smart money.
      All that and the Algos running the show.

      • Emrul Islam says:

        So my gut feeling tells me that as we come up against traditional long/short points the behaviour is likely to get more erratic. Where we are currently is not yet attracting shorts (I guess few will be foolhardy enough to bet against the Fed POMO, an imminent EURUSD bounce and an imminent AUDUSD bounce in concert) and we some profit taking and potential buyers staying out because of all the indicators screaming ‘sell’.

        ….Watching this market is more compelling than most TV shows 🙂

  2. DanishDime says:

    Hi, how did the fibonacci target of 1565 come about?

    • Art says:

      There are a pair of them. The first Fib target was determined by the 161.8% extension from the SPX 1342 low to 1448 top to the 1400 secondary low. The second is also a 161.8% extension and starts from the 1485 low to the 1525 high to the 1500 secondary low. Both arrive at the 1565 pocket. I originally mentioned it in the March 6th posting.

      • DanishDime says:

        Thanks, saw it. Incidentally, this target is also in the vicinity of the 261% fib extension of the Apr 2010 top to Jul 2010 low. Seems like 1565 is a highly significant level.

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