26 replies to this topic

[Trend-Signals]

Noted 7/19 as July top as markets have reached targets, and 9mo cycle top based with Mar 2007 as 9mo cycle low.

4yr cycle low was Jun-Jul 2006 as noted at that time with the bottom call.

Now, we have extremely negative and prolonged market breadth and falling price momentum without intraday bounce.

This is not a sign of a start of a new bull market any time soon. Price momentum was showing extreme divergence from market breadth for the last several months; and, now, price action is confirming the market breadth as commented that we will see sharp sell-off.

This market correction is entirely different characteristic than that we had during the last two correction, i.e. Jun-Jul 2006 and Mar 2007 bottoms because of the economic cycle and because of parabolic price actions which we have seen.

Considering the last couple of days of sell-off, breadth actions, and price momentums, I do not think that we will start a new bull market any time soon.


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http://www.traders-t...l=Trend-Signals

Hi TT:


Hope that you are doing great. Was off from the board because I was traveling during the last couple of months, but was posting on my ihub board.

Commented on $SOX/SMH 7-mo trading range breaking during April 2007; and now we have a confirmation and traded to targets.

Also, Qs traded to target, 50 +/-.

Dow traded to 14000 target.

SPX traded to SPX 1550 target

http://www.traders-t...hl=SOX breakout
http://www.traders-t...hl=SOX breakout

During early May, the initial vst/ST sell-signals resolved in consolidation and have broken out from RST/megaphone formation which I commented during the last couple of months while I was traveling.

http://investorshub....p?board_id=8800

Commented on the negative breadth which is not confirming the SPX 1550 breakout and noted that the vst/ST "W" formation breakout targeting SPX 1600.

Because we have strong trend, it is difficult to time the ST top as I have changed unconfirmed top formation call on 7/10 with vst intra-breakout retest rebound.

Since markets are in control than ever before, MM does have greater capability to control the market direction.

Anyone thinks that $USD will trade below 79?

Good trades




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http://investorshub....amp;txt2find=mo

Posted by: __1Best__
In reply to: None
Date:7/10/2007 8:10:35 PM
Post #of 1750

ST Top, 4yr-8yr Cycle: We have a very nice run since Jun-Jul 2006 low with "WWW" formation. All targets set during Jun-Jul 2006 have met. Considering various factors such as meeting targets, seasonality, breadth, etc., forming a ST Top going into traditional Sept/Oct bottom seems to be rational. This will provide a good buying opportunity and will reset Breadth negative divergences as commented that markets are showing sequential lower/low breadth while prices are advancing. Since markets have broken out of LT resistance, e.g. Qs broken above LT RST upper TL resistance, markets are favorable for LT with a good possibility of breaking above SPX 1540. This is consistent with the cycle comment during Jun-Jul 2006 low as 4-yr cyclical bottom within 8yr up-cycle.

Qs met 49 target for Apr 2007 breakout with Cup & Handle formation. Because of high volatility which I have seen during early Jun 2007, I issued "Sell/Take Profit" on Jun 7; then, a vst buy on Jun 8 with a note, "Higher Risk/Reward with high volatility" - the triple buy signal followed by reiterating 49 +/- target which it was initially 50 +/-, noted during March 2007 bottom. The note was based on the China sell-off followed by a sharp bounce off even though U.S. markets have not traded in similar fashion with high volatility as we have seen on $SSEC, it was prudent to be cautious.

As shown on the Qs daily chart, while it met 49 target, it has broken above the daily RST formation. I commented that Qs has broken above LT RST resistance as shown on the Qs weekly chart; hence, breaking above daily RST TL resistance was expected.

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SPX has traded under SPX 1540 +/- LT top resistance, as shown on SPX monthly chart, during the last six weeks after making SPX 1540 high on Jun 4. It has formed ST Triple Top formation with the third "W" formation since the Jun-Jul 2006 low. After reassessing the market actions, it is likely that Markets are forming "ST Top" going into the traditional Sept/Oct low. My cyclical analysis also indicates that Mar 2007 low was the 9mo low and the next low would be the traditional fall low which is a 3-mo pull back from the current level to SPX 1440 +/-. This will reset Breadth N.D. and will provide a good buying opportunity.

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$NYA traded to above 10100, new high, yesterday. As shown on the $NYSI breadth chart, it is continuing to show negative divergence, making new low on weekly. Neg Divergence can last long as we have seen it for the last several months. Having 3 months pull back into Oct 2007 low will set up a good buying opportunity after resetting N.D.

http://www.investors...age_id=21100050
http://www.trend-signals.com/


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http://www.trend-sig.../07Jul14_22.htm

Thursday, July 19, 2007 MSN Summary || Yahoo Finance || iHub Financial Board

DOW closed above 14000 which is a significant advancement, 1000 point rally since April 07 13000 breakout. SPX is trading near 1550, closing at 1553.08 and as commented before, the next target is SPX 1600. However, market is due for a correction as we can see it is showing significant negative breadth. Until we see that market is forming a ST top, shorts need to be careful. Market is advancing by squeezing shorts.


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http://www.stockchar...09398&r=568.png
http://www.stockchar...77535&r=859.png
http://www.stockchar...40300&r=617.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=60&yr=0&mn=2&dy=15&i=p73797548221&a=79285156&r=517.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=9&dy=0&i=p22232131775&a=76929034&r=724.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=W&yr=4&mn=8&dy=0&i=p49229126946&a=78987374&r=825.png
http://www.stockcharts.com/c-sc/sc?s=$INDU&p=D&yr=0&mn=10&dy=0&i=p31631774778&a=76966992&r=329.png
http://www.stockcharts.com/c-sc/sc?s=$INDU&p=W&yr=4&mn=3&dy=0&i=p72794457382&a=76929550&r=647.png
http://www.stockcharts.com/c-sc/sc?s=$COMPQ&p=D&yr=0&mn=8&dy=0&i=p21609042622&a=76909044&r=764.png
http://www.stockcharts.com/c-sc/sc?s=$COMPQ&p=W&yr=4&mn=3&dy=0&i=p53935525265&a=77295648&r=218.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=M&st=1990-01-01&i=p55891233677&a=87776994&r=893.png

Edited by Trend-Signals, 27 July 2007 - 09:33 PM.

[mmm]

Just to let you know my models show a similar picture but they differ in that we should see one more marginal new high in the NDX and a double top in the S&P before a deeper decline begins. My Fractal models show an end to this decline by some time in November similar to your 9 month low. I suspect the S&P will bottom around 1380 or so by the November bottom. Good Trading

[Trend-Signals]

As shown on the weekly charts, price momentum is just beginning to show a correction. At best, the current correction is a correction as a part of the current bull market cycle, not a new bull market cycle.

Based on the 4yr cycle low, Jun-Jul 2006 low, we are in the second year of the second 4-year bull cycle in 8 yr cycle which noted during Jun-Jul 2006 low.

Based on the 2nd year of 4yr bull cycle with Jun-Jul 2006 low, I would expect better market breadth to continue the 2nd year of 4yr bull cycle. The recent up price momentum was based on extremely narrow market breadth which is extremely unhealthy market.

Considering the extremely narrow breadth and unhealthy price momentum which we have seen, it is unreasonable to expect that we will be entering a new bull cycle any time soon.


http://www.stockchar...40300&r=617.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=W&yr=4&mn=8&dy=0&i=p49229126946&a=78987374&r=825.png
http://www.stockcharts.com/c-sc/sc?s=$INDU&p=W&yr=4&mn=3&dy=0&i=p72794457382&a=76929550&r=647.png

http://www.stockcharts.com/c-sc/sc?s=$COMPQ&p=W&yr=4&mn=3&dy=0&i=p53935525265&a=77295648&r=218.png



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MMM,


Your assessment is reasonable than thinking that we are going to enter a new bull market as shown on weekly charts, it is just showing a slight pull back, even with the recent pull back.

The sharp pull back which we have seen since 7/19 is a start of a major correction or a minor correction of the current 9 mo up momentum - that I can see.

There is no way that we are going to see a fresh new bull market any time soon with the current market condition.

At best, we could see the scenario which you have described, "Retest" of the high SPX, and start a major correction.

The breadth action is too horrible to think that we will start a new bulll market.

Just to let you know my models show a similar picture but they differ in that we should see one more marginal new high in the NDX and a double top in the S&P before a deeper decline begins. My Fractal models show an end to this decline by some time in November similar to your 9 month low. I suspect the S&P will bottom around 1380 or so by the November bottom.

Good Trading

Edited by Trend-Signals, 27 July 2007 - 09:57 PM.

[Trend-Signals]

This is extremely unhealthy market as shown on breadth chart, NAMO, that the prolonged divergence is quite alarming.

I warned about a sharp pull back during the last week; however, the last two days sell-off is showing too extreme, out-of-control market action.


http://stockcharts.com/c-sc/sc?s=$NAMO&p=W&yr=5&mn=5&dy=0&i=p31247762430&a=84024263&r=403.png

Edited by Trend-Signals, 27 July 2007 - 10:11 PM.

[stocks]

SPX has traded under SPX 1540 +/- LT top resistance, as shown on SPX monthly chart, during the last six weeks after making SPX 1540 high on Jun 4. It has formed ST Triple Top formation with the third "W" formation since the Jun-Jul 2006 low. After reassessing the market actions, it is likely that Markets are forming "ST Top" going into the traditional Sept/Oct low. My cyclical analysis also indicates that Mar 2007 low was the 9mo low and the next low would be the traditional fall low which is a 3-mo pull back from the current level to SPX 1440 +/-. This will reset Breadth N.D. and will provide a good buying opportunity.

$NYA traded to above 10100, new high, yesterday. As shown on the $NYSI breadth chart, it is continuing to show negative divergence, making new low on weekly. Neg Divergence can last long as we have seen it for the last several months. Having 3 months pull back into Oct 2007 low will set up a good buying opportunity after resetting N.D.

T-S,
Impressive website. One of the few which is a 'must read'.

I see another 4% down next week and then a wide trading range until the fall.
Next year is up big.

[Trend-Signals]

Thanks, stocks

But why do you think that we will do 10% correction from Jul 19 top?

I think that it is extremely negative to sell off 10% in two weeks. Insanity and extreme manipulation.

Trying to put this diplomatically....

PPT is crashing market, that's sin! Greed is a root of all evil. laughing

T-S,
Impressive website. One of the few which is a 'must read'.

I see another 4% down next week and then a wide trading range until the fall.
Next year is up big.

Edited by Trend-Signals, 27 July 2007 - 10:24 PM.

[xe2dy]

Trend Signals, I too really like your comments and charts. Thanks and have a nice weekend.

[Trend-Signals]

Trend Signals, I too really like your comments and charts. Thanks and have a nice weekend.

Hi Xe2dy, thanks

You have nice weekend as well.

[Trend-Signals]

With the prolonged negative breadth which I have seen and the extreme divergence price momentum in narrow breadth will not change because we had 10% correction in two weeks. It will just create "Public Fear" and "Negativity" since I, for one, will not believe that the 10% correction in two week as a bull market correction. A bull market correction is a sharp correction with normal market breadth, not a dramatic 10% correction in two weeks after having prolonged sickly market breadth divergence. The first week of August with 10% correction in two weeks is just another sickly market in which not many will believe that we are in new bull market. Losing confidence in "PPT" that they are doing their job since 10% correction in 2 weeks is nothing more than creating "Public Fear" for maximize profit as usual. Who is going to jump in buying market in the middle of summer after having sickly market breadth? It is like "Killing Sickly Bull" in the middle of summer for good as far as I am concerned. Furthermore, killing any confidence that PPT is created for public good instead of maximizing their profit. Market sentiment will not get better after 10% correction in 2 weeks, it will only get worse. Now, we will have over-sold, sickly market in which many will be afraid of and lost confidence in.

Edited by Trend-Signals, 27 July 2007 - 10:54 PM.

[Trend-Signals]

As shown on the charts, markets closed at major supports. As noted earlier, I expect a sharp snap back rally under normal bull market correction.

Note) If we see 10% correction in 2 weeks, it is like "PPT" is creating "911 public fear", if they indeed exist and do what they suppose to do.

Will post correction targets, I will try to post those tomorrow.

http://www.stockchar...09398&r=568.png
http://www.stockchar...77535&r=859.png
http://www.stockchar...40300&r=617.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=60&yr=0&mn=2&dy=15&i=p73797548221&a=79285156&r=517.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=9&dy=0&i=p22232131775&a=76929034&r=724.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=W&yr=4&mn=8&dy=0&i=p49229126946&a=78987374&r=825.png
http://www.stockcharts.com/c-sc/sc?s=$INDU&p=D&yr=0&mn=10&dy=0&i=p31631774778&a=76966992&r=329.png
http://www.stockcharts.com/c-sc/sc?s=$INDU&p=W&yr=4&mn=3&dy=0&i=p72794457382&a=76929550&r=647.png
http://www.stockcharts.com/c-sc/sc?s=$COMPQ&p=D&yr=0&mn=8&dy=0&i=p21609042622&a=76909044&r=764.png
http://www.stockcharts.com/c-sc/sc?s=$COMPQ&p=W&yr=4&mn=3&dy=0&i=p53935525265&a=77295648&r=218.png

Edited by Trend-Signals, 27 July 2007 - 11:37 PM.