Today is a follow-on from my monthly chart which shows we are close to an important level which could "Bring In The Bears" a little later this month. My Original Post has a level of approx 18100 however looking at the Daily I will be looking closely at around 17500 for a bearish signal, keeping in mind that the S&P500 is already at the major Upper Parallel of the MAJOR Monthly Pitchfork.
A few points to consider:
1. If prices continue up the first target is the upper RED dotted ML, If we play the probabilities that prices should reach the ML 80% of time and reverse, next we can look at timing ie. WHEN is it likely reach the ML.
2. If Pivot 3 is taken out & it reverses at the ML we'll have a completion of a 3 Drives and your out! pattern Terminating at P5!
3. Using Andrews Action/Reaction Techniques I have located a high probability Reaction Point where multiple lines are converging around the Median Line. The Action Point is also significant as it is passing through 2 Lows on the purple parallel as well as converging with the LARGER Lower Median Line Parallel which is still in Play.
4. Another Point to consider is that we have an Expanding Pivot on the Monthly ( Huge Megaphone Pattern ) and now potentially completing on the daily as well, with a 5 pivot count at the target 17500 area.
5. We also have Fib 0.236 Extension of the last DOWN swing terminating @ 17510.32
Note: If prices get close to 17500 look at the closes leading up to that point and attempt to identify at least 5 alternate closes, this is a clue that we may be at a significant P5 PIVOT!......Just look at the 0 Low Pivot and the previous High Pivot, they both completed 5 alternate closes before reversing:)
Hypothetical Plays could be as follows:
An initial long play on either a pullback to around 50% of Fridays Candle or on the open, ( Better R/R on a pullback however you may miss the entry ), and the Bigger second play would be to go Short at around 17480-17490 with a tight stop or on the lower close candle ONLY AFTER Hitting the Converging Lines or ML.
Alternatively a safer play would be to enter Short on a break of the Lower LMLH of the Green Upward pitchfork.
Targets:
I have my initial target 1 as a minimum if the DOW breaks down quickly, This is a good TP area, however this could be the beginning of a HUGE plunge that may continue so I will be observing the closes around these lines should we get this Reversal at P5. Past that the market should continue to Targets 2 & 3 and beyond if this ends up being the TOP that Terminates this impressive Bull Run!
Sincerely,
TIK
Comments
Timing_is_key
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Notice how the market tracked the RED dotted Median Line! After some refining, got this chart to sing at the reversal, question is....Did Santa bring us a Bear or a Bull for Christmas:)
Timing_is_key
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Has now cleared the median lines, and is following the white dotted line as it attempts to reach the extreme converging lines point for a potential 5 ( expanding ) pivot completion.
Timing_is_key
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The market has come down hard since posting, however it now at an interesting level ie. It has done a direct hit of the downward purple fork ML. It will now either bounce & reverse and test the all time high ( possibly do a double top around 17375 ) or if it breaks this current bars low and zooms through it will indicate more downside to next lower purple parallel at a minimum. Note: I have re-adjusted this idea to account for the last 3 day breakdown, will be interesting to see what happens tomorrow.
Sincerely,
TIK
Timing_is_key
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The price failing to reach the ML and 17375 is an ominous sign, Also on the larger scale fell short of hitting the upper fork parallel leaving a GAP which is unlikely to be filled, My S&P500 chart was the leader in this correction as it HIT the Upper Parallel perfectly .....Hold on to your hats this correction will be big.
Timing_is_key
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As predicted when price broke the downward purple dotted median line it carried to the lower parallel perfectly and got the bounce up.......How far will it go? I have reworked this chart and changed the count to reflect the new low pivot, let's see if it can complete the 5 pivot count and post a new high around 17650.
Thanks,
TIK
Timing_is_key
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Update: Price is following the white dotted arrow nicely and has broken through the 1st of 3 median lines in play & is now sitting on the 1st, there are 2 points of interest for the reversal based on my converging lines methodology, I have noted them on this updated chart.
Good call, lower purple parallel was hit precisely, looks like it's going to bounce, to where? Ideally I would like to see a completion of a 5 wave broadening Wedge. For that to happen I will have to go against all the dooms-dayers telling everyone the all-time top is in......., If we start to get a bounce up I will post another interesting chart calling for a new all-time high!! If it breaks the lower parallel and continues down, I'd say equities are in trouble,