CurtisM

$SPX Daily, 04/10/2014: Bearish rising wedge confirmed.

INDEX:SPX   S&P 500 Index
356 9 6
Down on the day on heavy volume . Down on the week, the month and the year. Is there a message here?

I'm treating today the same way IBD would call a bottom. First you have strong move up and then within 3-5 days, or so, you have a rally of close to 2% to confirm the up move. Obviously, I'm looking at the inverse of this with today's 2% decline confirming the large moves from late last week and Monday. To me this is saying that traders should expect lower lows from here as we are witnessing a change in trend.

The bearish rising wedge on the $SPX             daily chart is confirmed with three closes below the lower line. This sets up a measured move of 120pts which takes $SPX             back down to the 1740 area. This will also bust $SPX             down and out of the rising price channel on this chart, which is anchored on the lows from November of 2012. And this is likely only the beginning of what I believe is going to be a major correction. The last time we had any type of major correction was back in May of 2011. That correction lasted 5 months. I believe we are going to see something similar and perhaps worse.

In the short term, the $TRIN closed at 2.18 so is oversold. $NYUPV closed at 83 and is also oversold. There are a couple of other breadth indicators that also moved into oversold territory today so don't be surprised if we bounce or maybe just pause for a day or more before the next leg down begins.

Be careful & GL
stockSMASH
2 years ago
Real value in your post. I truly expect a bounce in the morning. as we are at the convergence of 2 major moving averages. But, it is and will be short lived and the selling will be awesome. Your assessment is fair warning and appreciated. Unlike the past, rallies should be sold in the coming weeks and weeks. The drops will really rip at people. They are so conditioned to bounce after powerful bounce. We are due for something bloody red and with the force and relentless surge up without pullbacks in the past 16 months, this one ... this correction may be one for the history books. Days of 300 and 400 down will come in chuncks. You are respected and I hope readers/traders who see this take this seriously. Please continue to send your updates.
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CurtisM stockSMASH
2 years ago
biff, just remember that the market is always two steps ahead so we could see another two day pop like we did on Tuesday and Wednesday. But, as soon as signs of weakness appear then the selling is likely to resume, IMHO.
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2use CurtisM
2 years ago
I won't call a change in the trend until it breaks from the trend, so down+up+up may mean nothing indeed unless it is out of trends resistance line
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jasonexcel
2 years ago
Could you also do same analysis to QQQ? You didn't update it for a while. I am waiting for your point of view. Thanks.
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CurtisM jasonexcel
2 years ago
jason, I've updated my Q chart.

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stockSMASH
2 years ago
Good Morning! Upon review, your rising wedge correct and validated. Dow will prob fade to 15700ish ...spx to 1805ish... Then a bounce, perhaps energetic, and after a few days of enthusiasm, more selling and yelling. QQQ and IBB and TNA flush under bollingerband and another day of that will trigger buy bots. I am setting up for small term bounces there... What is your stuff telling you? Thank you for your time and response.
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CurtisM stockSMASH
2 years ago
biff, we're certainly not going straight down so bounces will come and go. Right now in the Q's daily chart we have positive divergence in the CCI and the RSI plus the Aroon Oscillator is at -100.

In the 60min time frame, the RSI for Q's, IWM, SPY, & DIA are either just below 30 or right at 30.

All of the above suggests that we are short term sufficiently oversold enough for a bounce. I'm guessing here, but if we're going to bounce, then that bounce should start Sunday evening in the futures.

GL
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Louise
2 years ago
Which software program do you use for your chart? Please.....
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CurtisM Louise
2 years ago
If you're referring to those charts I linked in the QQQ post, that is Ninja trader. You can download and use that package for free. You get end of day data only but that's good enough for my needs.

GL
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