The bulls went to town again today with another 20pt. run. Per Zerohedge, this has been the best run in 13 months. There are a few things that make me skeptical of the run thus far even though it has been rather impressive. First up is the Russell 2000. This has been the go to chart for me for the past week or so as it is showing weakness compared to the other indices and has the potential to outperform to the downside if/when this thing lets go. Needless to say, this is my vehicle of choice when the bus crashes. It is currently set up nicely with what would appear to be at present a nested wave (2). Anything above 1144 and I'll have to concede to the bulls on this one.
This was a fun little chart and some keen observation by one Mr. Dundies over at Deep Wave Analytics today. He noted that every oversold condition on the RSI had been met with new highs since mid year of 2013, except for this one. Oversold and still a good ways from new highs.
Lastly is our S&P 500 Short term chart. While an impressive rally, just because it is fast doesn't make it impulsive. We're coming up on a confluence of things that has a decent potential to kick off our next larger wave C decline into the 1600's. At the 1827 area we have wave c equaling wave a which is a common Elliott Wave target for corrective waves. Also in that area there is a gap from back on 24JAN14. Lastly the 78.6% Fibonacci retracement level also finds itself parked right in the middle of the other two creating quite a coincidence area. The elevator drop could be special from up here.
A little caution has to be warranted for both sides, so have your gameplans ready and don't deviate. Good luck peeps.
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Good work BA!
ReplyDeleteWhile I'm still patiently awaiting the decline into Big 4, a TSP move starting at the lows of 4Feb14 is looking better in retrospect. A good, pre-deadline turn, +/-85 S&P points with nary a pause, and some upcoming well-defined resistance levels to identify an exit. Of course, that would exhaust the available moves for the month, and who knows how quickly the market would drop/recover, and if the whole thing would be done before 1Mar14... But, you've tracked what could have been a fairly straight-forward and profitable move. Well done, Sir!
GoF!sh