Trading Environment-Short Term: Current Environment-Bearish
Hi Everyone, Futures are fairly flat this morning and the pattern in place is NOT calling for a drop, but rather another new high pending. It doesn't mean it has to hold above the new highs, just that new highs have much greater odds than the spx breaking down here. That is not an all safe to buy, but rather don't be shorting aggressively here, as 2970 or higher could be here sooner rather than later. We have spent 2 days in a simple consolidation pattern and that is why I am saying we see higher before lower, that is all. This is not the way ANY previous tops have formed and until we see a 20+ move lower, one has to look at this as consolidation and the bulls remain in full control.
There are warning signs that a top is near, like bearish divergences, resistance and wave structure, but as I said, I don't see it happening until we see what looks like consolidation, turn into support being busted to the downside. With that said, I do see a larger move down pending and if we do get new highs like the pattern is suggesting, I believe they will come with sell signals on the NYAD, which is what I base true tops off of. They are not in place just yet, but they also weren't in place when we made the previous all-time high. We did get a 200 point drop, but as the NYAD was suggesting, that was NOT the real top as we see now. Where am I going with all of this? Short term, the pattern is suggesting higher before lower. An little longer view or a 2-3 weeks, I do see a 100-200 point decline pending, which I also believe will find support as well as buyers. Let's forget about any crashes or bear markets, that really does nothing for us right now and take things one move at a time. Until the bears can push the spx below 2930, the bulls remain in control. I may end up being dead wrong with the pop higher first, but I can only look at the pattern and the way we have traded since making the top on Friday-and that is suggesting another pop higher.
Today range for the spx 2948 high and 2941 low. A break of 2948 the SPX should try for the spx should try for 2954/2960. A push below 2941 we could see 2930/2916. G-
Can The Stock Market Be Predicted? Below are a series of predictions we made from September. Take a look and you will see, yes they can and nobody does it better than Woody Dorsey!
February 14, 2019: Nominal tactical weakness has been due into 2/22. Now, to reiterate, “nominal tactical weakness” is not a “Sell” signal. It is just the timing profile. Again, as noted: “The Interim profile is still Bullish.” The December Low was excessive, and the rebound is becoming excessive too. If a corrective range is forming, another or, several 2-3 day declines may occur over the next two weeks. Now, the next nominal trading high is due near 4/10ish. That does not mean stocks are just going higher from here to there by any means. It makes the most tactical sense for stocks to correct or to become congested for a while. • Near Term Diagnosis: Sentiment is 83% Bullish today following a relatively rare 97% bullish yesterday. These are clearly cautionary. • Interim Term Diagnosis: The Interim Trend still allows for recovery rallies, by fits and starts, into at least early April or perhaps even into June. 10/16/18 Sentiment Timing Report: MARKET TIMING: A tactical trading low was ideally due last week and came in on 10/11 synchronous with the 0% Bullish. This week is messy with an upside bias due next week. Given the expansion of the range, it may all amount to not very much: “I still foresee a notable relief rally in November. That may be followed by more weakness than anyone expects into year end.” The code is for a nominal Recovery near 10/26 and, post-Election, engineer a decent upside episode into Thanksgiving followed by perhaps surprisingly robust downside in December. These codes may morph and become more, or less defined, so be aware of that. These are tricky times and “loco” maneuvers can occur. Comment: 09/13/18 Sentiment Timing Report: MARKET TIMING: A failure was expected in August. The expected correction is profiled to last into near 9/25ish but, “This Fall may see trading opportunities both ways.” How the market behaves into 9/25ish there will tell us all a great deal about the larger context. So far from the 8/29 High, there were 7 days down which have been followed by 5 days up. While it feels like the market is strong it really has been in a sideways price/time pattern. What fits best now is for another 6-8 day decline which would make it a somewhat symmetrical compound correction into the preferred low date. Under that pattern, today would be the last upside day.