Friday, September 6, 2013

ImageSince the 9 count TD Sell Setup that was recorded yesterday on the S&P 500 (SPX), the opening 20 point and recovery may all be all we can expect from this timeframe. The SPX is still under the 1662.71 TD Propulsion threshold but with today’s open and closing bar higher then the 9 bar, odds are growing that the 2 hour chart will draw into a 13 count TD Sell Countdown. ImageThe 4 hour timeframe is the designated timeframe to watch. What would be ideal for the bears is for the market to trade sideways to incrementally higher preferably under the TD Propulsion level or even the 50 day moving average (1665ish) and record a 9 count. This is scheduled for next Monday as bar 8 and 9 will finalize as long as the SPX closes above 1653.01 today. ImageImageImageImageWeekly charts are somewhat rosy after the close of today. This opens the door for a higher retracement perhaps to the 1680 area for the SPX. If so, it does setup for a head and shoulders pattern. The Dow Industrials (DJI) may have bottomed out for awhile. The Nasdaq Composite (COMPQ) has a real good chance of hitting new highs. The Russell 2000 (RUT) does not look as constructive which helps paint the overall bearish picture. 


Positioned neutral. Experience was my best guide today. Entered short when the SPX went negative which is also near the level where the 4 hour SPX chart would produce bearish price flip. Average True Range for the SPX is around 16 and when the SPX drops 20 handles under 30 minutes, it made sense to cover and wait for a better re-entry point that never came. Plan going forward is to stay neutral unless SPX closes below 1653.01 today.  (updated intraday)

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One Response to Friday, September 6, 2013

  1. DavidDT says:

    Monday’s September 9th SPX close will be higher than today’s close, but high of the day will be lower than today’s.

    Therefore perfect short trade’s entry was today right after 2PM EST, but positions can be added on Monday’s “higher close”.
    If Monday’s close will NOT be higher – then Tuesday’s higher than today’s close.
    We NEED higher close in order for wave B to print on daily SPX.

    IF that is NOT going to happen – then it is even MORE BEARISH SCENARIO, because wave A will extend into lows on SEPTEMBER OPEX and then B will print at the end of September, may be as high as 1675 and vicious C down will rule entire October. (chart patterns lovers may calculate downside based on, in this case, materialized head and shoulders 5/22/2013-8/2/2013-9/27/2013

    I went short after 2PM today with slightly more than 1/2 of intended position and will press on Monday if it plays out the way I see it.

    This entire counter trend move (and trend is DOWN from Aug 2nd) from 8/27 closing low was contained in 33% extension of the channel of DWave 5 from closing low on 11/15/2012 – the last attempt to stay with that wave and break of 33% line will be similar to June 18th “3 days bear market”.

    Downside target by Sep OPEX is somewhere between 1595 and 1575, but as most of you know – price is secondary for me.



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