Traders' Library Blog

Stocata S&P 500 Analysis: March 29, 2014.

Last week I wrote: 
"The index made a very small higher high, creating a wave 3.11. I consider  11 up swings as quite extreme. Of course this does not mean that wave 3.11 is finished. I see 1900 still as a possible target with a move towards the upper side of the up moving pitchfork and the R1 pivot resistance. On the other hand, moving down will create a nice double top in the daily chart. while indicators are divergent and in a down move. Who will be winning next week? Bulls or bears? Personally I do expect a lower start of the week".

As expected a lower start of the week and also a lower close of the week. There is a negative divergence between the index and the indicators with room for a further down move. We should expect support from the PP monthly pivot level and the 100 day simple moving average around 1820. If we move below the previous reaction wave 2, we will have a new wave 1, the start of a new 123 down wave. A possible alternative is that we start an up correction move already now, turning down before a new wave 3 is formed. That would have the same effect, a 123 wave down, in first instance to the 100 simple moving average. Remember that a definite downturn, with a lower high, followed by a lower low will probably be the start of a longer term down move.

Find more comments with the weekly chart HERE and with the monthly chart HERE. Follow-up comments on the EUR.USD HERE.

Sylvain Vervoort   http://stocata.org/

Stocata S&P 500 Analysis: March 22, 2014.

Last week I wrote: 
"Apparently not enough bull power left to bring the index to 1900. Have we started the longer term down move? We will have to wait for a lower top and basically a lower bottom before we can confirm this. We can see a negative divergence between the index and the fast stochastic RSI, possibly confirming a more serious correction coming up. The next expected move is one downwards to the median line of the up moving pitchfork, the 50 day average and the PP pivot support level. Eventually a move down to the 100 day average. From that point there will be an up retracement. If that one creates finally a top below the wave top 3.10, then we are most probably on the way for a larger correction. Anyway, for the moment I would not take any new long position and carefully watch using a stop for any open long positions.".

The index made a very small higher high, creating a wave 3.11. I consider  11 up swings as quite extreme. Of course this does not mean that wave 3.11 is finished. I see 1900 still as a possible target with a move towards the upper side of the up moving pitchfork and the R1 pivot resistance. On the other hand, moving down will create a nice double top in the daily chart. while indicators are divergent and in a down move. Who will be winning next week? Bulls or bears? Personally I do expect a lower start of the week.

Sylvain Vervoort   http://stocata.org/

Stocata S&P 500 Analysis: March 15, 2014.

Last week I wrote: 
"Last week I wrote: It looks that there is some more room for the move up towards the upper side of the volatility band with I guess with an absolute top of 1900". After a reaction on Monday, we had a further move up towards the upper side of the up moving pitchfork and the upper side of  the volatility band. We came already close to 1900 which I think will probably be the long term top for now. Pivot resistance R1 is also waiting around 1900. I have to repeat: with the level we are reaching now, we must expect a long term reaction any moment. For next week there is of course a chance that the 1900 level will be reached".

Apparently not enough bull power left to bring the index to 1900. Have we started the longer term down move? We will have to wait for a lower top and basically a lower bottom before we can confirm this. We can see a negative divergence between the index and the fast stochastic RSI, possibly confirming a more serious correction coming up. The next expected move is one downwards to the median line of the up moving pitchfork, the 50 day average and the PP pivot support level. Eventually a move down to the 100 day average. From that point there will be an up retracement. If that one creates finally a top below the wave top 3.10, then we are most probably on the way for a larger correction. Anyway, for the moment I would not take any new long position and carefully watch using a stop for any open long positions.

Sylvain Vervoort   http://stocata.org/

Stocata S&P 500 Analysis: March 8, 2014.

Last week I wrote: 
"Last week I wrote: "We got the further move up towards the upper side of the up moving pitchfork and the upper side of the volatility channel , creating a new top with wave 3.10. The fast stochastic RSI is diverging with the index. It looks that there is some more room for the move up towards the upper side of the volatility band with I guess an absolute top of 1900. On the other hand, after the long term up move and the level we are reaching now, we must expect a long term reaction any moment. Just like the weekly chart, technically we are still in an up move. We will need a lower top before we can assume a change in trend, and the first one in the daily chart will normally be valid only for the short term".

Last week I wrote: " It looks that there is some more room for the move up towards the upper side of the volatility band with I guess with an absolute top of 1900". After a reaction on Monday, we had a further move up towards the upper side of the up moving pitchfork and the upper side of  the volatility band. We came already close to 1900 which I think will probably be the long term top for now. Pivot resistance R1 is also waiting around 1900. I have to repeat: with the level we are reaching now, we must expect a long term reaction any moment. For next week there is of course a chance that the 1900 level will be reached.

Sylvain Vervoort   http://stocata.org/

Stocata S&P 500 Analysis: March 2, 2014.

Last week I wrote: "A consolidation and not yet a new high wave 3.10 while reaching the median line of the previous pitchfork. I created a new last upward pitchfork. We may have a further move up towards the upper side of this pitchfork for a new high wave 3.10. But for now, I would say there is an equal opportunity that correction wave 2 is finished and that a wave 3 down will be started. In that case I expect a move down towards the low side of the BBS band, the median line of the up  moving pitchfork and the support of the 50 day average".

We got the further move up towards the upper side of the up moving pitchfork and the upper side of the volatility channel , creating a new top with wave 3.10. The fast stochastic RSI is diverging with the index. It looks that there is some more room for the move up towards the upper side of the volatility band with I guess an absolute top of 1900. On the other hand, after the long term up move and the level we are reaching now, we must expect a long term reaction any moment. Just like the weekly chart, technically we are still in an up move. We will need a lower top before we can assume a change in trend, and the first one in the daily chart will normally be valid only for the short term.

Sylvain Vervoort  http://stocata.org/