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Sunday, December 5, 2010

No bad news in sight.

The one thing that is bugging me is that it seems unanimous that we are in 5 of 1 of 3 of p3 to the upside.  Every blog I look it is the same talk.  That is worrysome.  Yes we are rallying.  So I want to be cautious.  Markets have a habit of going from euphoria to busted balloon very quickly.  While keeping that in the back of the mind.  Markets closed up for the third day in a row.  After being down 5 points at 9.00 a.m. spx took off finished up 3.  Many important indicators are flashing bullish confirmation signs.  One more good positive day say of about 10 points there will be none that is negative.  
I have looked at the bank stocks little closely and we are not totally out of the barn yet.  FAS is hitting against the median line I would like to see it above that for clarity.  
The chart on the left is spx hourly.  The 180 hours for 5 which would equal to 1 of 180 hours finishes at the early part of 2nd week of January 2012.  A few ups and downs can happen before that and my calculation is for spx to be around 1320 (+or - 10 points).  
The chart on right spx daily.  This chart gives me a clearer picture.  After coming down to 2x3 line (this is my modification) spx is up trending towards 1x1.  The 1x1 line should be touched by spx around 1320 in the 2nd week of Jan.  I am not projecting what happens at that point.  The current trajectory points to that.  
The chart on left if weekly.  This is GANN's favorite.  He valued weekly more than others.  Here the last line in sand of 1x8 has not been penetrated.  There is also the 1257 the bottom of 1 on the decline from 1576.  There is that very small probability that 1257 may be a turn around point and this will be end of big 4  (and spx 4 won't go into 1) and 5 would take spx below 666. My dollar says these levels will be penetrated and 1320 is mostly likely top in 5/6 weeks.
The last chart is spx monthly.  It has a lot of useful parallel trend lines from way back to 1974 and 1982.  SPX is getting to point of high congestion.  The green parallel lines ; the red parallel lines ; median line of the current channel it spells trouble to me.  But the good news is it is not immediate.  Another important data point to watch.
So I am bullish and will trade that way.  My other charts on TNA, FAZ , TZA and RUT tell me spx has a last gasp rally that is not done yet.  Once that is over i will get a meaningful point of entry.  Meaning if we drop 30 points on spx I will go long  aggressively. 
Thanks for reading my blog and offering your encouragement.

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