4 replies to this topic

[Alton]

I've noticed some DeMark skepticism since his call for a pause earlier this year went bad. I guess he's the only seer who's been wrong. - sarcasm.gif Yesterday's (5/23/2013) close finalized a confluence of TD Sequential Setup completions for the SPX, NDX and RUT. This is a sell setup. Although the confluence is notable, in theory it's not necessarily bearish. The signals may be followed by a Countdown phase to allow consolidation and/or distribution before the market decides its future course, or a Sequential continuation (recycling) can occur if the market chooses to continue its relentless incline. What I call a Setup completion, Geomean calls a "price flip." The RUT signal came on Wednesday's downtrust after a +14 count; NDX also arrived Wednesday following a +21 catch-up run, SPX flipped yesterday after +15 days. These elevated Sequential numbers remind me that the TD 9-counts are only thresholds, signaling, "yes, we seem to be trending." Waiting for the completion (or price flip) is a somewhat surer way to believe the signal has validity -- even though you give back profits on the flip -- and that's what we have here. As for the current situation, I've noted the bots and bashers like to pound the market in the direction of the original sequential move after a completion, perhaps to punish those who buy (or sell) in response to a Sequential Setup completion price flip; so that would suggest upward movement might be in the cards, even if this cluster of signals turns out to be right. I follow the Demark Sequential Setup & Countdown using a simplified mechanical method. I call this simplification the TD Hitchhiker as it doesn't follow all the rules set forth by DeMark. Rather than ask any questions about the method, I recommend read DeMark's 1994 "The New Science of Technical Analysis" if you're interested. Geo has offered some other sources from time to time. I don't have any positions for this, but I can say I'm a skeptic for the 1900 calls I've seen recently on the web. A more elegant top would be 1744. But now we have this little TD confluence. Well, here I am...another head for Gentle Ben's trophy case. Insight, incite, or insanity – dunce.gif Alton

Edited by Alton, 24 May 2013 - 02:08 AM.

[dasein]

nicely written Alton - thanks for the heads up.

[arbman]

I think an automatic buy setup due to momentum will show up and a rally into summer is a given to 1700+, especially if we see a volatile consolidation into June... I doubt it will be the same as last June, but probably a round bottom this time due to QE, perhaps similar to last July... I am pretty sure we will see higher due to the steeply rising moving averages though, the next high with breadth and momentum divergences can correct pretty steeply into the cycle lows due in October... Just my 2 cents...

[Geomean]

Great post, Alton. Very explanatory. My charts print completion of the TD Sell Set Ups precisely as you outlined, with bearish TD price flips, i.e. a close greater than the close four bars earlier, immediately followed by a close below the close 4 bars. That flip bar is the start of a prospective TD Buy set up. Given that the reference is to the closes 4 bars earlier, this represents, in effect, a rolling week. However, another flip in the opposite direction would cancel the pending buy set up and signal a change in market character. This illustrates the utility of TD Set Up to help determine whether a market is exhibiting a trading range, or is trending. All of the bars within these set ups completed above the prior TDST resistance (i.e. the low of the prior buy set up (i.e. the one in the opposite direction) which is the TDST line). Most would call this trending, of high thrust. I already print exhaustion down signals in the Compx NDX and SPX dailies so key reversals might be a good signal here. Completion of a pending buy set up or a flip above the current TDST line which is at 1582 on the SPX would be a low risk entry zone. Interestingly, we are at various stages of TD Combo's countdown completions and TDSEQ countdown completions, so this next turn up could see some choppy consolidation, maybe the proverbial hard to trade wave 4. But, eg RUT has a 1076 TD Wave price projection.

Edited by Geomean, 24 May 2013 - 05:50 PM.

[Alton]

nicely written Alton - thanks for the heads up.

Thanks Karen. I value your opinion. In part it was a rewrite of prior posts which made it easier....

I think an automatic buy setup due to momentum will show up and a rally into summer is a given to 1700+, especially if we see a volatile consolidation into June... I doubt it will be the same as last June, but probably a round bottom this time due to QE, perhaps similar to last July... I am pretty sure we will see higher due to the steeply rising moving averages though, the next high with breadth and momentum divergences can correct pretty steeply into the cycle lows due in October... Just my 2 cents...

Arb, interesting and detailed picture you paint. I'll try to interpret only the first part in DeMark Sequential terms. The earliest possible Buy Setup date on the S&P would be June 6 if the TD9 threshold is the extent of downward momentum. This would be followed by a Countdown phase (which could offer a rounding bottom and may or may not reach the full 13) and/or a Sequential rise to carry us into the 1700+ area you mentioned. I don't know if you intend it as a forecast, but it's a reasonable scenario. My thought is that we may not get the full Buy Setup count. I suppose we'll see how it progresses, probably different from the way either of us imagines.

...
That flip bar is the start of a prospective TD Buy set up. Given that the reference is to the closes 4 bars earlier, this represents, in effect, a rolling week. However, another flip in the opposite direction would cancel the pending buy set up and signal a change in market character.

This illustrates the utility of TD Set Up to help determine whether a market is exhibiting a trading range, or is trending. All of the bars within these set ups completed above the prior TDST resistance (i.e. the low of the prior buy set up (i.e. the one in the opposite direction) which is the TDST line). Most would call this trending, of high thrust.

I already print exhaustion down signals in the Compx NDX and SPX dailies so key reversals might be a good signal here.

Completion of a pending buy set up or a flip above the current TDST line which is at 1582 on the SPX would be a low risk entry zone. Interestingly, we are at various stages of TD Combo's countdown completions and TDSEQ countdown completions, so this next turn up could see some choppy consolidation, maybe the proverbial hard to trade wave 4.
...

Geo, your use of the DeMark concepts exceeds my simple tracking of TD Sequential. From your post I understand that TDST support exists at 1582, and TDST resistance at 1655, and an upward flip between these two would be a low risk entry. And I gather you think the flip will happen sooner than later. I would rather buy closer to support, but I like the simplicity of buying either on the flip above support or with a TD Buy Setup. I hope you continue to post on DeMark as you have a more comprehensive understanding of the various tools and concepts. I realize some of the difficulties in using a toolset which often tries to call turns in the market.
-- Alton

Edited by Alton, 27 May 2013 - 02:17 PM.