Traders' Library Blog

Stocata S&P 500 Analysis: April 26, 2014.

Last week I wrote: 
"In this shorter 4 day trading week we got as expected a correction wave 2 up, which is not finished. The up pullback is now finding resistance at the level of the monthly PP pivot level, the upper side of the BBS band and price resistance around 1870. The spinning top on the candle pattern Thursday may be the first sign that wave 2 is topping. If the index turns back down it is forming a head and shoulder pattern. The coming week may be very important for the future. Making once more another top? I believe turning down has a good chance.".

As I expected last week, the up correction wave was not finished. The index went further up to the level of the left shoulders. Now falling back to the PP pivot level of the month, the median line of the up moving pitchfork, the support of the 50 day average and the low side of the BBS channel. Moving further down now will create a hidden divergence with lower tops in the index and higher tops in the stochastic RSI indicator. This should lead to a continuation of the previous swing down to below the last bottom in first instance. You never know, but that is what we should expect the coming week(s).

Sylvain Vervoort http://stocata.org/

Stocata S&P 500 Analysis: April 19, 2014.

Last week I wrote: 
"Last week I wrote: "We should now expect a further move down to the S1 pivot support, the median line of the up moving pitchfork and the 50 day simple moving average. This will possibly break the level of the previous wave 2 bottom, moving to the 100 day average and creating a new wave 1 down". This is exactly what happened. With the index now reaching the S2 pivot support. There is room for a further down move towards the low side of the up moving pitchfork, the S3 pivot support and the 200 day average. It may take more than one week to get there. A correction wave 2 will most probably create a pullback for the new wave 1 down before reaching that point. Very important now is to see if an up reaction wave 2 will make a lower top than wave 3.12, that would be a very important sign of a possible longer term trend reversal".

In this shorter 4 day trading week we got as expected a correction wave 2 up, that is not finished. The up pullback is now finding resistance at the level of the monthly PP pivot level, the upper side of the BBS band and price resistance around 1870. The spinning top on the candle pattern Thursday may be the first sign that wave 2 is topping. If the index turns back down it is forming a head and shoulder pattern. The coming week may be very important for the future. Making once more another top? I believe turning down has a good chance.

Sylvain Vervoort  http://stocata.org/

Stocata S&P 500 Analysis: April 12, 2014.

Last week I wrote: 
"Finally we got the scenario that I taught would not happen. A new top for wave 3.12 reaching the resistance of the R1 pivot of the month. But Friday there was a large down correction bringing the index back to the PP pivot support and the low side of the BBS channel. We can assume at least the start of a wave 2 correction. Keep in mind that we may be starting a longer term down move.".

Last week I wrote: "We should now expect a further move down to the S1 pivot support, the median line of the up moving pitchfork and the 50 day simple moving average. This will possibly break the level of the previous wave 2 bottom, moving to the 100 day average and creating a new wave 1 down". This is exactly what happened. With the index now reaching the S2 pivot support. There is room for a further down move towards the low side of the up moving pitchfork, the S3 pivot support and the 200 day average. It may take more than one week to get there. A correction wave 2 will most probably create a pullback for the new wave 1 down before reaching that point. Very important now is to see if an up reaction wave 2 will make a lower top than wave 3.12, that would be a very important sign of a possible longer term trend reversal.

Sylvain Vervoort   http://stocata.org/

Stocata S&P 500 Analysis: April 5, 2014.

Last week I wrote: 
"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.".

Finally we got the scenario that I taught would not happen. A new top for wave 3.12 reaching the resistance of the R1 pivot of the month. But Friday there was a large down correction bringing the index back to the PP pivot support and the low side of the BBS channel. We can assume at least the start of a wave 2 correction. We should now expect a further move down to the S1 pivot support, the median line of the up moving pitchfork and the 50 day simple moving average. This will possibly break the level of the previous wave 2 bottom, moving to the 100 day average and creating a new wave 1 down. Keep in mind that we may be starting a longer term down move.

Sylvain Vervoort   http://stocata.org/