Since the lows of 2009, every time the in the weekly time frame has climbed above 70, a pull back of one degree or another has followed. In the early winter and early spring of 2011 we had negative divergence and this preceded the largest pull back in the $SPX since the 2009. In December of 2013, the rose to 74 but since then each new closing high has come with a lower setting up negative divergence. So we've had the above 70 several times since December 2013 and are currently in an negative divergence situation. This suggests that the indecision doji's will be confirmed to the downside.
Further and in the , $SPX is in the grasp of a Squeeze as the continue to tighten. While the $SPX doesn't have to go into a multi-day pull back because of the Squeeze, it has on several previous occasions and I'm expecting $SPX to once again go into a multi-day pull back which will take it below the recent lows of 1862 & 1860.
Adding to the argument of a multi-day decline beginning next week is the fact that the Summation Index has already started rolling over indicating weakening . Next there is the fact that the 5EMA on the $VIX, thanks to some hard selling of $VIX call options late in Friday's session, has dropped to 12.62 and is deep in the froth zone. Also, and perhaps most importantly, the ( CVI ) has really not made a new high since April 2nd while $NYA has put in two more closing highs, the last one being slightly more than 80pts above the high from April 2nd which is more evidence of weakening . And finally, since the beginning of May, the $TRIN has closed above 1. xx on 9 occasions with 4 of those above 1. xx closes coming on green days evidencing that every rally is being sold into. This $TRIN situation is very similar to the way the $TRIN was behaving going into the mid-January high.
So, based on the above, I do expect the market to remain weak throughout the coming week and end the week below the 1860 area. However, and extremely important, the market likes nothing better than to make fools of those who attempt to divine its movements and so I could be completely wrong. In other words, do your own due diligence.
GL in the week ahead.
The numbers for this year so far (in millions):
For December 2013 margin debt was $444,931, so the latest number has dipped below that.
Meanwhile the market cuts its own throat with respect to tapering as the simpletons at the Fed will see no problems with this price action and will continue withdrawing liquidity.
They may be getting ready to pump $SPX to 1902 today so they can take off tomorrow and not worry about it over the weekend.
Today (5/19) the ES pushed through and closed above the 50% retrace of the range defined by the low of the sell-off (1859.00) from the contract high (1898.50). That fib was at 1878.75. The ES touched that level exactly today at 10:28 am, then pulled back and traded at or below it until it broke through 39 minutes later.
After the ES broke above the fib, it was tested as support multiple times. The lowest the sellers could push the ES was 1 tick below (1878.50 at 12:38-40). The other re-tests bounced right off it exactly.
Right now it's looking pretty solid but I want to see the overnight and early action tomorrow. If it continues to hold and the ES makes higher highs tomorrow I'm figuring the trend is up. It could not push through 1883.00 late. But if the fib holds and it decisively gets through 1883.00, then short and short-related positions are probably in for more pain.
So I'm giving this to the close on Wednesday or a solid close above 1902, which ever comes first.
Thing about charts is that charts don't make the market, the market makes the charts. Regardless of my chart analysis the market will do what it's going to do.
Thanks for your comment.