Traders' Library Blog

Stocata S&P 500 Analysis: January 25, 2014.

Last week I wrote: 
"Last week I wrote: "It looks like the S&P 500 wants to agree with my 1850 target I was predicting for a long time and that the 1849.44 we reached the previous week was not yet 1850 and so it made 1850.84 this week. This makes a nice double top and with a small higher high a new wave 3.9. For now I would consider this high as the upper side of a trading range where 1815 is the low side. If the turn down from top 3.9 is confirmed the coming week, we also have a divergence between a higher top in the index and lower tops in the indicators. So, again we may be at the start of a longer term down move, possibly confirmed in the weekly chart also. A lower index is expected the coming week. US markets are closed on Monday for Martin Luther King Jr. Day.".

As expected we got a lower index. The past week the double top was confirmed with lower prices with large downward candles on Thursday and Friday. The upper side of a new downward pitchfork formed resistance. A historical downward Fibonacci projection between top wave 3.9 and the wave 2 correction before, gave a 161.8% target at 1793. This level, also the S1 pivot support level was reached on Friday. The expert turned black. We have a new downward wave 1. For now there is room for a further move down towards the lower side of the up moving pitchfork, the 100 day simple moving average and the 261.8% Fibonacci target. Watch your open long positions, this may be the start of a long term correction.

Sylvain Vervoort  http://stocata.org/

Stocata S&P 500 Analysis: January 18, 2014.

Last week I wrote: 
"Last week I wrote: "The low on Monday came close to the PP median pivot level of the month and the low side of the smaller BBS channel. From that point we had an up reaction the rest of the week back to the upper side of the BBS channel. The expert is still black. I rather expect the index to move in a trading range the coming week(s). There may be small breaks out of this range. Long term the index is still moving up".

It looks like the S&P 500 wants to agree with my 1850 target I was predicting for a long time and that the 1849.44 we reached the previous week was not yet 1850 and so it made 1850.84 this week. This makes a nice double top and with a small higher high a new wave 3.9. For now I would consider this high as the upper side of a trading range where 1815 is the low side. If the turn down from top 3.9 is confirmed the coming week, we also have a divergence between a higher top in the index and lower tops in the indicators. So, again we may be at the start of a longer term down move, possibly confirmed in the weekly chart also. A lower index is expected the coming week. US markets are closed on Monday for Martin Luther King Jr. Day.

Sylvain Vervoort  http://stocata.org/

Stocata S&P 500 Analysis: January 11, 2014.

Last week I wrote: 
"Last week I wrote: "the index is now very close to the long time expected 1850. I believe there is a fair chance reaching this level next week. I may take profit on my short insurance call option with a strike price at 1800 the coming week". I closed the call 1800 that was bought November 15 at $26 for $52 on January 2. To add it to the results list, I treated it like a normal index trade. The total closed profit now becomes 131.7% since the start in March 2009. The option recovers some of the paper loss we have with the open short position. The index turned down against the upper side of the up moving pitchfork and the upper side of the volatility channel. The expert turned black. The indicators are moving down. Looking at the monthly, weekly and daily chart I do expect a further reaction down towards 1650. In the daily chart there will be support from the S1 pivot and the 50 day average around 1790 and next the S2 pivot and the 100 day average around 1740".

The low on Monday came close to the PP median pivot level of the month and the low side of the smaller BBS channel. From that point we had an up reaction the rest of the week back to the upper side of the BBS channel. The expert is still black. I rather expect the index to move in a trading range the coming week(s). There may be small breaks out of this range. Long term the index is still moving up.

Sylvain Vervoort   http://stocata.org/

Stocata S&P 500 Analysis: January 4, 2014.

Last week I wrote: 
"As expected, the index moved to the upper side of the volatility band, bringing wave 3.8 also close to the R2 pivot resistance and the upper side of the up moving pitchfork. With a high of 1844.9 the index is now very close to the long time expected 1850. I believe there is a fair chance reaching this level next week. I may take profit on my short insurance call option with a strike price at 1800 the coming week. I believe we are reaching the top and I think we must be prepared for a longer term reaction down that may start the coming weeks".

Last week I mentioned "the index is now very close to the long time expected 1850. I believe there is a fair chance reaching this level next week. I may take profit on my short insurance call option with a strike price at 1800 the coming week". I closed the call 1800 that was bought November 15 at $26 for $52 on January 2. To add it to the results list, I treated it like a normal index trade. The total closed profit now becomes 131.7% since the start in March 2009. The option recovers some of the paper loss we have with the open short position. The index turned down against the upper side of the up moving pitchfork and the upper side of the volatility channel. The expert turned black. The indicators are moving down. Looking at the monthly, weekly and daily chart I do expect a further reaction down towards 1650. In the daily chart there will be support from the S1 pivot and the 50 day average around 1790 and next the S2 pivot and the 100 day average around 1740.

Sylvain Vervoort   http://stocata.org/