Oct 14, 2014: 10:06 AM CST
After failing at two key support levels very recently, the S&P 500 and broader US Equity Markets have one more major support test and potential bounce as another downside target is fully achieved.
Let’s see the support target and note the positive divergences developing into this level:
We’ll quickly note that the 1,925 price confluence (rectangle) then the recent confluence of the rising 200 day SMA with the 1,900 “Round Number” level also failed to stop the bearish action.
When support levels fail, it often sets up great trading opportunities to play short (bearishly) into a fast-moving market, as has been the case recently. Continue Reading…
Oct 13, 2014: 12:26 PM CST
At the halfway point today, we’re balancing the odds of another bullish reversal off support against the possibility of a continuation of the persistent selling pressure we’ve seen lately.
We’ll start with our chart of the S&P 500 for clues:
For additional commentary, see this morning’s update on “Planning Another Possible Intraday Reversal from Positive Divergences.”
The main idea is that we may see another repeat performance of what we saw October 8th when price touched a new low against “triple” positive market internal divergences.
There’s no guarantee price will once again rally higher but do focus on this potential bullish outcome.
The market would be an outright, aggressive short-sale under 1,900 again.
Oct 13, 2014: 11:59 AM CST
Let’s take a moment to view a “Big Three” Market Internal Chart of the S&P 500 to note yet another positive divergence and possible “intraday reversal” outcome.
Here’s the current picture and price pathway:
First, take a look at my intraday update post (just like this one) from October 8th which showed a near-identical pattern.
Mid-day October 8th, all three Market Internals showed a clear positive divergence (the indicators were making higher lows at the same time price traded to a lower low) and the forecast indicated a likely intraday reversal.
That was indeed the correct call as the market reversed higher off the 1,935 level to rise roughly 45 points higher into a negative divergence at the 1,970 target level.
Quite simply, we’re seeing a similar positive divergence – compare the yellow highlights – to October 8th. Continue Reading…
Oct 10, 2014: 1:53 PM CST
Price continues to trade within an intraday downtrend as the sell-phase continues.
There’s a clear pathway developing, but no guarantee price will follow it.
Let’s chart the pathway and highlight the top trending stocks of the session:
Today we saw a (near) test of the 200 day SMA as I highlighted in this morning’s update.
Beyond that, we’re still in this game-planning mode of “Will the market repeat an intervention pattern or will this time be different” which frames our short-term strategies in this broader context.
Nevertheless, the intraday pathway is lower but price is testing the lower boundary of the falling range.
This would suggest – at least short-term – that buyers could rally the market again toward the falling upper trendline near 1,960.
However, a touch of additional selling could collapse the market straight down – even after all the selling we’ve already seen (reference July 2011).
Oct 10, 2014: 11:08 AM CST
Both the S&P 500 and Dow Jones Indexes are challenging major support levels that demand our attention.
Let’s quickly assess the situation, highlight the inflection points, and adapt our strategies accordingly.
The chart above shows the S&P 500 retracing strongly – similar to January 2014 – toward the rising 200 day SMA target (1,900/1,905 confluence).
We’ll focus all our attention on this level – buyers are favored above this level and short-sellers (bears) would strongly be favored beneath it.
Should the market break under the rising 200 day SMA, it would be the first time in 2014 to do so. Continue Reading…