Bull Market Gone Bad

Based on my Analysis over the weekend the Weekly Charts of the Trans, SPX, Naz, and Dow are beginning to convince me we are definitely rolling over to the down side.....The markets are showing signs of weakness in all sectors and the US Dollar appears to be in the beginnings of a rebound........With all that , I am moving to a sell the rallys mode . I am still cautious of suprise up spikes... so for this week small size trade placement will stay in effect.....if spx remains below 1040 after Monday close I feel confident we will continue to further broader market weakness...

Market TAO Week Ahead 10-25-09

The Bulls fought very hard to hold this lower triangle trend line at the close on Friday. This is a significant place ..

As you can see failure to hold above and break out of the Triangle to the up side will most likely see the Gap below filled .....

Triangles are difficult to trade... use small amounts and tight stops to trade the interior body.... be nimble...

we will most likely know the direction of the break by end of week.

More Up to the Market Ahead

We are very close to a peak in this current leg. Spx 1120 area looks to be the target over the next 7-10 trading sessions.

The general optimism of earnings expectations will hold markets up for the next few weeks and bullish sentiment will continue to buoy prices.

Corrections develop two ways. A pull back in price or a sideways movement over time to absorb the momentum of the rally.

Every one is expecting a traditional retracement from the peak but there is much more misleading data today than the typical economic environments we have seen in the past.

Technically, the analysis suggests a near term turn to the down side. Traders are nervous and don't want to commit to the up side but are not eager to to sell . The Mutual fund managers are running out of gun powder as well. They got in late which explains the run up in the last leg and cant sell until the end of the year.

Foregoing a significant shock , less than luke warm earnings or disappointing guidance, I don't see enough bearishness or bearish media coverage to sustain any meaningful push down. Nor do I see any additional conviction of the buyers to move the the ball further up the hill.

I think the Market will move sideways in a range for the next quarter.
This level will present significant resistance over the next 3-4 months.
Ultimately investors will seriously begin to question and expect performance. When they realize true progress is not forthcoming the melt down will begin.

The Week Ahead 9-20-09

Spx 500 Chart
Price has popped out above the riseing wedge upper trend line. This could mark the usual over shoot typical of the climax of wedge tops.

The Ascending Triangle in last two days is a head scratcher here. This could signal a final push up. The market is clearly headed for the Dow 10,000. The Transports are leading the way and the Spx will most likely follow along in the same general direction. Earnings will begin to trickle in next week and the Big Houses are in pump mode with all the upgrades last week ....expect more.

The dark blue oval is the upper target the orange dotted line is the long range trend line off the all time high 1576 on Oct 07 .

It's hard to say how price will get there in the next 7-10 days. The ovals are the probable reaction areas for price corrections and direction change.

I Think the market is topping out up here but it may take a few more weeks before we see Mr. Market's real intent.

• The Markets are at extremes for now.
• The Bullishness is at 2004 levels.
• Vix is at the 10 year low trend line.
• There are a record number of stocks above the 200 day moving adverage ...
• The Us Dollar is at 18 month extreme lows.
• Side line cash is moving out of money markets and more in to better intrest and dividend earning vehicles and not as much is avaliable to go into common equities.

Untill the fever breaks ,if you want to be in the market, it is safer to remain in a buy the dips mode with tight stops.

Weekly Naz 7-5-09 Comparison

Above is a weekly (look at the Earth from high altitude) zone and Harmonic trend analysis. I see is the Turtle and the Hare story unfolding.The Naz jumped out ahead of the S&P and Dow as much as 10% in May and June. Also notice the similar Market structures in Oct- Nov 07 and May - Aug 08...This all agrees with Mr.Trader's analysis of AAPL Boston Wealth Management.com. I am expecting a 2.5 to 4% decline in the Naz to Equalize the market over the next 4-6 weeks. Be sure to look at the hourlys to find a good interday rally to sell.

ProphetCharts: ESU9

Next week I am going to take all my buy and sell signals for the SPY from the ES futures S & P 500 mini .This is my own brand of harmonic trend analysis with key support and resistance zones. all this works if the Monday buy is at the green dot with a stop below 889 . If ES Futures gets a bounce Monday, this should set up a 3 wave push in the SPY over next week before the big down trend resumes . These corrective moves are real zig zaggy and it's a real dog fight all the way up. this is where you hold your nose with one eye open and push the buy button then watch it all unfold. Also I am only going to use half my regular position size. This is the Bulls last stand so I think they will be out in full force. Besides, I want a little money on the table just in case they succeed.
Keep a sharp eye on the US Dollar. I expect it to show some weakness after it's big run Thursday.
Update: Check Out Morties Secret analysis for Monday and Tuesday 7-6-09

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ProphetCharts: SPY

This is a very Critical support line if SPY breaks down here, there is not much to stop the drop to the target zone....if we bounce we could reach the upper target in 2 days .......also notice the potential for an decending triangle if we do bounce up .....we also have a possiblel Double Top to consider ....

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ProphetCharts: SPY

Beginning with a pattern of 5 up and 5 down days , we now have the possibility of a 3 up 3 down days pattern completing.

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ProphetCharts: SPY

Markets run in cycles .....this chart suggests a continuation of that cycle to nex bottom in next 4-5 weeks

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