Traders' Library Blog

Stocata S&P 500 Analysis: August 30, 2014.

Last week I wrote: 
"Last week I said: "It looks like the indicators were right favoring a further up move. Already Monday the possible hanging man candlestick reversal was not confirmed showing a further up move towards the R1 pivot resistance of the month. Since that was the only resistance there, it was too weak to stop that move up. And believe it or not we have once more a higher top with wave 3.17. However, we are closing the week below the previous top. We also see a step down candle pattern. And we may have a nice double top reversal pattern. So, at least I expect some downward reaction now. One thing is that the move is still convergent between price and indicators, that may be an indication that the final top has not been reached yet."

No double top, no downward reaction, but closing a bit higher in a week with limited moves. We are now closing above the 2000 level with 2003.37. With 2003 we reach a Fibonacci target level. Basically I would now expect some pullback to create a reaction wave 2, possibly after first a limited continuation of the up move (2010?). My expected minimum retracement level is 1970. This may take more than one week.

Have you noticed that the BBS Band Break System used on the weekly chart took a long trade August 17 2012 at 1418.16 and that we are now closing at 2003.37 on August 29, 2014. A profit of 585.21 or 41.2%.

Sylvain Vervoort  http://stocata.org/

Stocata S&P 500 Analysis: August 23, 2014.

Last week I wrote: 
"Last week I said: "The Friday pullback is I assume the start of an up retracement for a wave 2 correction towards the 50 day SMA, a 50% retracement of the wave started from the top 3.16 and the PP pivot level". This is clearly where we are now. Have we reached the top of the wave 2 retracement? We have a hanging man reversal candlestick pattern, but we need a confirmation the coming week to be sure the reversal has started. Indicators seem to be in favor for a further up move, but that is not abnormal with a retracement in a down move. "

It looks like the indicators were right favoring a further up move. Already Monday the possible hanging man candlestick reversal was not confirmed showing a further up move towards the R1 pivot resistance of the month. Since that was the only resistance there, it was too weak to stop that move up. And believe it or not we have once more a higher top with wave 3.17. However, we are closing the week below the previous top. We also see a step down candle pattern. And we may have a nice double top reversal pattern. So, at least I expect some downward reaction now. One thing is that the move is still convergent between price and indicators, that may be an indication that the final top has not been reached yet.

Have you noticed that my BBS Band Break System used on the weekly chart, took a long trade August 17 2012 at 1418.16 and that we are closing now at 1988.44 on August 22, 2014. A profit of 570.28 or 40.2%.

Sylvain Vervoort   http://stocata.org/

Stocata S&P 500 Analysis: August 16, 2014.

Last week I wrote: 
"A pullback on Monday was followed by a further move down to the S1 pivot support of the month, the 100 day SMA and a 50% retracement of the larger up move since the beginning of April. This probably concludes a first new wave 1 down. The Friday pullback is I assume the start of an up retracement for a wave 2 correction towards the 50 day SMA, a 50% retracement of the wave started from the top 3.16 and the PP pivot level. Be careful, the up move now is most probably just a reaction move and will be followed by a further move down the coming weeks."

Last week I said: "The Friday pullback is I assume the start of an up retracement for a wave 2 correction towards the 50 day SMA, a 50% retracement of the wave started from the top 3.16 and the PP pivot level". This is clearly where we are now. Have we reached the top of the wave 2 retracement? We have a hanging man reversal candlestick pattern, but we need a confirmation the coming week to be sure the reversal has started. Indicators seem to be in favor for a further up move, but that is not abnormal with a retracement in a down move.

Sylvain Vervoort  http://stocata.org/

Stocata S&P 500 Analysis: August 9, 2014.

Last week I wrote: 
"The evening doji star candlestick reversal pattern is confirmed. The index moved down not only to the level of the 50 day SMA, but went on to the support of the 100 day SMA and reaching the low side of the volatility channel and the new S1 pivot support of August. There may be some consolidation, but we must expect a further down move first to the historical 261.8% Fibonacci projection at the same level as the S2 pivot support at 1890. Below that we have the low side of the up moving pitchfork and the 200 day average. I assume we will reach that only after a pullback. The expert system turned black."

A pullback on Monday was followed by a further move down to the S1 pivot support of the month, the 100 day SMA and a 50% retracement of the larger up move since the beginning of April. This probably concludes a first new wave 1 down. The Friday pullback is I assume the start of an up retracement for a wave 2 correction towards the 50 day SMA, a 50% retracement of the wave started from the top 3.16 and the PP pivot level. Be careful, the up move now is most probably just a reaction move and will be followed by a further move down the coming weeks.

Sylvain Vervoort   http://stocata.org/

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

Last week I wrote: 
"As I wrote last week: "We have a hidden divergence with lower bottoms in the SVESRSI indicator and the index with higher bottoms. This is basically an indication that we should expect an index above the previous top 3.15". And yes we have another higher top wave 3.16, close to the R2 pivot of the month, the upper side of the up moving pitchfork and the upper side of the BBS channel. We now have an evening doji star in the daily chart. This is a candlestick top reversal pattern. For now we can see the start of a rounding top price pattern. We should expect a lower index the coming week towards the 50 day simple moving average and the PP pivot level. On the other hand there is of course the magic number 2000 that close by..."

The evening doji star candlestick reversal pattern is confirmed. The index moved down not only to the level of the 50 day SMA, but went on to the support of the 100 day SMA and reaching the low side of the volatility channel and the new S1 pivot support of August. There may be some consolidation, but we must expect a further down move first to the historical 261.8% Fibonacci projection at the same level as the S2 pivot support at 1890. Below that we have the low side of the up moving pitchfork and the 200 day average. I assume we will reach that only after a pullback. The expert system turned black.

Sylvain Vervoort   http://stocata.org/