I like your analysis and your comparison with the ’87 crash period and would like to add to it if I may. I’ve observed that since 1931 we seem to have been running approx. 20yr EW cycles from start of W1 of one cycle to the end of a significant bear market retracement of the entire index and the start of W1 of the next cycle. This may have something to do with our generations, I don’t know.As we look like we are approaching (or maybe reached) the top of this rally I thought I would update my chart and analysis.
Now breaking it down to a daily chart.
This is the pattern I currently think could play out.
A test of support at 4500ish a quick rally to test 4700ish and fill the gap and then down she goes before finally making a lower high.
The lower high will be the key indicator of the start of the next decent move down imo. But like I said in my post above there is the possibility that support at 4200-4300 becomes the base that we consolidate at and we don't retest 3700 but I do favour a retest of 3700 but it is pure speculation at this stage.
Very strong buying in the 'overnight' S&P500 futures (ES). Moved up 4 points or so after the earnings announcement from Alcoa, but in the last 10 mins or so has moved up another 6-odd points. These are big moves in the overnight ES at this time of day (not huge, but unusual enough to rate a mention). Trying to see what I can find out about the move in the last 10 mins.
imo alot of stops exploded, Blame aus employment figuresWe're being watched as a world barometer.
You might have said that in jest, but might be more accurate than you think?
The surge in the ES came about 5 minutes after the Aus figures. I think you are right about covering shorts. From 1058.50 to just under 1064 in less than 30 seconds, on volume of about 6000-odd contracts. For this time of day, that's big.
Had a similar move a couple of months ago during earnings season, turned out to be short-covering as earning came in better than expected.
BTW - posting this in this thread for its obvious implications for the Australian market.
http://www.bloomberg.com/markets/ecalendar/index.html
Jobless claims announcement tonight and Non-Farm payrolls on Friday. I think the reaction to these sets the tone for what happens next.
There seems to be a lot of talk of people waiting for a pullback to get in. But on the flipside we appear to be (and according to the perma-bears) at a potential turning point. Given that the last few bearish patterns have failed what's to say that we won't;
1) Just melt higher into the end of the year
2) Go straight up from here again
My guess is that because everyone is expecting a major pullback, it probably won't happen.
In reaction to previous comments 'the market is so overbought' blah blah, PE's are too high. So what? when did a stock market run on logic?
I'd be really interested to hear what Trembling Hand has to say. He's been spot on with the last couple of calls he made.
Also note that some people were talking about oil decoupling at the start of the week. Well look today it still is, but I'd say not in the direction people were thinking, it's back over $70 today.
BTW holding a long GBP.AUD position, oil and in and out of SPI.
Well i forecasted this in previous posts of the downturn in momentum on the xao,I was 1 week early tho in my forecasts tho im happy im in a 100% cash portfolio,futures on the dow are at currently at 130 points down,Altho ppl will rush in to say it's to early,its been 4 months since large downturn in confidence(in terms of futures).
The U.S just announced a further 273 000 jobs lost,alot higher than than forecasted.Well if this plays out on the dow as a another sharp sell-off,The resistance of 4525 on the xao will be tested.Seems the w correction maybe in play now.Well when i get time will add in graphs on resistance lvls on dow/xao this weekend.Well it's time for the bears to come out of the caves it seems.
imo alot of stops exploded, Blame aus employment figuresWe're being watched as a world barometer.
100% cash - well I guess the interest rate rise will push that along a littlehehehe Well I can't talk actually - I was in the process of selling out. Just lucky that I had not gotten to far into it.
Now breaking it down to a daily chart.
This is the pattern I currently think could play out.
A test of support at 4500ish a quick rally to test 4700ish and fill the gap and then down she goes before finally making a lower high.
The lower high will be the key indicator of the start of the next decent move down imo. But like I said in my post above there is the possibility that support at 4200-4300 becomes the base that we consolidate at and we don't retest 3700 but I do favour a retest of 3700 but it is pure speculation at this stage.
A quick update.
We've pushed up through the resistance line but it has been anything but convincing. I still favour a move to the downside or at least a decent consolidation period but with the US seemingly determined to move higher it will probably drag us higher. If we do see some weakness overseas it will be interesting to see how the markets here handle it.
I've also noticed a few resource stocks are starting to give me short signals or have short plays setting up.
We are certainly at an interesting juncture in the market.
A quick update.
We've pushed up through the resistance line but it has been anything but convincing. I still favour a move to the downside or at least a decent consolidation period but with the US seemingly determined to move higher it will probably drag us higher. If we do see some weakness overseas it will be interesting to see how the markets here handle it.
I've also noticed a few resource stocks are starting to give me short signals or have short plays setting up.
We are certainly at an interesting juncture in the market.
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