Monday, December 5, 2016
I've been having major internet connectivity and speed issues tonight, so after quite a bit of frustration, I've decided to forego the update today, since I can't get charts uploaded. There's no real change from the prior two updates anyway -- so far, nothing that's happened has been outside the realm of "normal rally correction" territory. That could always change today, of course, but as of this exact moment, nothing terribly exciting has happened in the past few sessions. Trade safe.
Posted by PretzelLogic at 2:59 AM
Friday, December 2, 2016
Some markets lend themselves to grand-sweeping predictions, while others are best off being allowed free reign, and thus better-served by being "reacted to" than predicted. This market is presently in the category of the latter.
As an example: RUT recently failed a back-test of a zone that bulls were hoping would act as support, and one could have used that failure (especially the retest from below) as an exit point for longs. One can now watch how RUT proceeds from here and react accordingly.
BKX is currently in the earlier stages of testing a similar zone:
INDU is testing resistance from below:
Near-term, SPX proved out the hypothesis I put forth in the prior update:
In conclusion, I don't have much to offer in the way of near-term predictions from the market's current position. Presently I'm primarily in "reaction mode" (for example, on Wednesday in our private forums, I suggested if 2204 broke, it would probably make a good exit point for longs, which saved folks some drawdown), and I'm avoiding front-running. In time, everything will clarify, like it always does -- so there's never any need to "force" the market to constantly fit into some preconceived idea or other. Traders need to have more than one tool in their arsenals. Trade safe.
Posted by PretzelLogic at 4:36 AM
Wednesday, November 30, 2016
The last couple session saw SPX plummet in an uncontrollable free-fall, ultimately dropping a total of more than 8 entire points on a closing basis. Panic set in briefly at the Fed, and Janet Yellen called a secret emergency meeting to brief Board members on what the color "red" meant. My sources tell me that she assured them it was only temporary, and was able to stave off the very real potential of mass suicide.
Looking at the charts, we can see that, so far anyway, SPX has simply back-tested the intermediate red line from above. Bears need to force a sustained breakdown at yesterday's low to create another Fed meeting:
Near-term, SPX pretty much ignored the lower trend line. This means that either we just witnessed a small-degree fourth wave, or that bears fired a warning shot. We start thinking warning shot only if there's a sustained breakdown at the aforementioned levels:
RUT has also tested a trend line from above:
In conclusion, the immediate levels bears need are at least clear. Those levels don't guarantee the correction will get much bigger, but they at least create the opportunity for a bigger correction, so they're certainly worth paying attention to, and can act as "complacency checkpoints" for bulls (as in, "check your complacency at the door below these levels"). Presently, though, all we have is normal back-tests of previous resistance -- and so far they have acted as support. Trade safe.
Posted by PretzelLogic at 4:06 AM
Monday, November 28, 2016
Well, I hope all my readers had a pleasant Thanksgiving, and remembered to give thanks for whatever it is that they're thankful for, in the spirit of thankfulnessicity. I do believe it was Napoleon Hill who taught that thankfulness/gratitude is one key to achieving and maintaining abundance. And (a few years before him) so did Jesus, for that matter, by saying: "For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath." My interpretation of that has always been that it makes the most sense in the context of attitude. (Apologies if I've offended anyone who associates the Bible with someone they may know who's particularly obnoxious -- that's like associating all of America with one particularly obnoxious citizen, and a bit too small-minded for my personal taste.)
So far, SPX has continued holding all relevant support levels, so there's as yet nothing for bears to get too excited about there, however, we do have INDU and BKX testing resistance levels -- and INDU is doing so in an extremely overbought condition, as we'll see on the upcoming charts. The problem bears do need to keep in mind is that, so far anyway, resistance hasn't done anything other than pause the rally each time. There's no such thing as permanent resistance in a bull market.
Let's start with SPX's near-term chart:
Bigger picture, SPX has recently cleared a trend line that came into play quite frequently over the past few months:
INDU reached its next target zone -- we'll see if that offers anything in the form of resistance:
And finally, BKX has now almost-perfectly tagged the intermediate confluence I mentioned a while back:
In conclusion, there's nothing to do in a market like this but follow the trend until such a point that the market says we shouldn't. So until we see an impulsive turn lower, there's no compelling reason for bears to come out of the shadows. Trade safe.
Posted by PretzelLogic at 4:39 AM
Wednesday, November 23, 2016
(Note: 5 charts today, so the update is continued on a second page...)
So there are "difficult" markets, and then there are markets like this one, which basically cater only to the "permas." By that, I mean they can be hard to trade if you think too much. If you're simply a perma-bull in your approach ("BTFD! Duh!"), then you're a "genus"! (And probably a "phylum" as well!). As someone whose name I'm too lazy to look up at the moment once famously said: "Don't confuse brains with a bull market." Or was it: "Don't confuse brawn with Chuck Norris"? No matter. The point is, markets like this reward the True Believers and punish everyone else.
That is, until they don't, of course -- at which point the True Believers get wiped out.
But for now, the True Believers are still reaping bragging rights, and maybe eking out some amount of profit here and there, depending on how many times they've given it all back by buying near the top and selling near the bottom, and how many times they've held through massive drawdown only so they could, in the end, say: "See? I KNEW it would come back! BTFD -- the only way for me! Yo."
SPX finally cleared its all-time-high, and INDU has broken above prior resistance (in any bull move, step one is to break prior resistance, step two is to hold that and for resistance to act as support. Step two has yet to be determined here.):
RUT has continued on a rocket-launch trajectory:
Posted by PretzelLogic at 4:29 AM
Monday, November 21, 2016
Well, on top of the fact that there's not really anything to add to Friday's update, my internet quit for a couple hours tonight, and while it's been back on for a bit now, it's slowed to an absolute crawl -- so today's update will be super-short.
Basically, just the updated SPX chart, which includes a note about the long-term potential in the event of a sustained breakout:
Wow, it just took 18 minutes to upload that chart (!).
Luckily there nothing else to add, really. Trade safe.
Posted by PretzelLogic at 4:32 AM
Friday, November 18, 2016
Today we're going to look at a few larger views of markets, but I'm going to let the charts do most of the talking.
Let's start with the long-term BKX chart, which I've only updated a handful of times since -- holy cow -- January 2013 (see bottom-most annotation). There may be a correction pending, since BKX is challenging intermediate resistance, but by all normal rights, it's hard to imagine this BXK pattern not ultimately continuing higher toward black V. So, even if there is a correction soon, odds are reasonable that it will be a buy op.
Next is RUT, which is also challenging intermediate resistance:
INDU is challenging a resistance zone as well:
And, of course, so is SPX, in the form of the all-time-high:
In conclusion, multiple markets are challenging intermediate resistance zones. Normally, we'd expect some sort of reaction from those zones, and thus be on the lookout for a correction to begin soon. As I've said for quite some time, though (sometimes directly, sometimes indirectly), it's worth a reminder that the odds are good that we're still in a larger bull market -- so, from our present vantage point anyway, it still appears that if we do have a correction soon, it will likely end up being a buy op in the long run. Though, if we are in the midst of fifth waves higher, maybe not such a great deal in the LONGEST run, if you catch my drift -- but buy ops for the directly foreseeable future, anyway. Trade safe.
Posted by PretzelLogic at 4:21 AM