Thursday, August 29, 2013

ImageImageImageThere is a confirmed polarity shift today. Yesterday’s S&P 500 (SPX) low at 1627.47 was tested today and bounced off the standard 61.8% Fibonacci retracement from yesterday’s high of 1641.18. The 4 hour timeframe will flip bullish today unless the SPX closes under 1630.89 which is a tall order at this point. Keeping everything in context, unless the McClellan Oscillator show quality breadth readings, this rally should just be a counter-trend rally. There are two targets I am preliminarily keying on. From the SPX high at 1709.67 to the low at 1627.47, the 38.2% retracement stands at 1658.87. Confluent to that is the gap fill at 1656.02. Additionally, there is a revised TD Propulsion level at 1662.71. As mentioned recently, TD Propulsion serves better as a reference point to signal further gains if that level is taken out. If it does breach, then the bull/bear level at 1680 will likely be challenged. ImageImageNo doubt Tesla Motors (TSLA) is the momo cult stock of the year and it is painful to watch it go higher without being involved in it. Every recorded 9 count TD Sell Setup or 13 count TD Sell Countdown on the daily chart results in relative minor retracements. The daily chart is close to completing another TD Sell Setup and this time, there is additional confluence from the weekly charts. All this suggests a bigger retracement than what has been seen in the past.  The daily is on an ‘unperfected’ 8 count, and the weekly charts have clustering 13’s. A recorded TD Combo Sell 3 weeks ago and next week will likely record a 13 on TD Sell Countdown. We’ll keep this on the monitor list. 

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Initially everything looked ‘right’ in the beginning of the session but intuitively smelled trouble for the short side when the trading vehicles, IWM was ripping higher and SPY was closing their morning gap. I was forced to close my shorts and I am positioned long now through Friday unless SPX closes under 1640. If the situation in Syria would have mattered, the markets would not be higher when it is most vulnerable. (updated intraday)

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3 Responses to Thursday, August 29, 2013

  1. Bernardo says:

    Thank you for the insightful work.
    I would suggest you to, please, show the weekly and monthly charts after tomorrow’s closing trading day.
    We know that September tends to be the worst month for the equity indexes

    Best regards,
    Bernardo

  2. blackjak100 says:

    Art-

    This wave looks highly corrective from the impulse 1670-1627. Don’t think we get much farther than 1648-1649 if that.

    • Art says:

      I just felt as though the bears had every opportunity to step on the accelerator pedal and didn’t bite. Anyways to your point, that’s why I’m giving extra emphasis to the 2 hour TD Sequential chart.

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