Nothing Is New!

The market continues to climb higher as many market participants continue to ponder on when it will rollover and experience a sizeable correction to remove the excess. Many have put forth technical corollaries to point out the similarities from the past and the consequences it might hold. Numerous price derivative indicators highlighting excessive overbought have been published to support the cries for a correction from these market participants.

Back In Sync

Yesterday I warned about the negative divergence that the market has been displaying for the last couple of trading sessions, and this negative divergence needs to be resolved or another extended pullback such as the one we have experienced from May 19, 2015 to February 11, 2016 could appear.

Caution!

The market has been holding on to a negative divergence in the last couple trading sessions. Today, the market sent a non-confirmed recovery high with negative breadth message to warn of potential change in direction. Until this divergence has dissipated, be very cautious on overly extended toward the long side. If this negative divergence does not get resolved soon, be prepared for a possible extended downward move. Last time the market sent out this similar message was on May 19, 2015, and the Dow Jones Industrial did not see a higher high since and only on February 11, 2016 when the Dow Jones Industrial put in a non-confirmed low to start this recent rally. Will today’s message result in a similar outcome as the May 19, 2015? We just have to wait and see.

Just a reminder, tomorrow the FOMC will announce its latest decision on interest rate, and Chairwoman Yellen will hold a press conference after the FOMC meeting. Beware of potential increase in volatility!

Coming Through

The market is coming through the level we've been monitoring, the September 2015 FOMC pivot high. Last week, market did a minor pullback after five consecutive up days and then it resumed it's upward move toward weekly OpEx. Next week, FOMC will hold its March meeting and the anticipation is there will not be another rate hike in March. As the meeting approaches, the market could experience an increase in volatility. Therefore, one should remain cautious and do not attempt to trade in front of the FED as anything can happen. Always expect the unexpected.

Time For A Pause

The market has been up for four consecutive day and it could be time for a pause before it continues to move higher.

In this video, a review of the market’s price action along with these momo stocks: AAPL, FB, NFLX, TWTR, AMZN, GOOGL, TSLA, and the crude oil, gold, long term treasuries and the US dollar futures.

Resolved

Today’s rally has resolved the concerns that I have expressed in the post "Likely To Go Higher". The divergence between the DJ Industrial and the DJ Transportation has been rectified and the Dow Theory non-confirmed low remains to be valid. More importantly, the breadth indicator that did not provide the confirmation came through with a validation that the current upward move is supported by market breadth.

Here are the updated charts for DJI, DJT and SPX. The levels below the price are potential supports and levels above the price are potential resistance/target.

Likely To Go Higher

One thing I have learned a long time ago is that the market will never ring the bell to inform us it has made a top or a bottom, or it has changed direction. I also have learned the market never hides its intention and it will always let us know what it plans to do. What it doesn’t tell us is where, when and how.

Market Still Hanging On

The market still hanging on after a nice bounce off the recent low near 1800. Although the SP500 did not get above the potential double bottom pivot, it hasn't collapsed back to the recent low. It could be simply digesting some of the recent gains before it makes another attempt to break above the pivot high and move to retest last September FOMC meeting level near 2020 on the SPX.

In this video, a review on what the crude oil, gold and the stock market did last week and what to monitor for the coming week. In addition, a review of the following MOMO stocks: AAPL, FB, NFLX, TWTR, AMZN, GOOGL & TSLA.

It's Not All Magic!

Sometime things do appear to be magic, but do not be fooled, there is nothing magically about the market. The market is a reflection of the human emotion; how it react to various news announcements, geopolitical events, rumors, etc. If one simply focus on the price action and how it is being auctioned up and down, then one can see there is nothing magically about the price, it is all about what the market participants perceived as value.

In this video, we will look at the futures for crude, gold, bonds, US dollar, the indices along with the cash indices to get a sense where it might be headed in the near term. In addition, we will look at these MOMO stocks: AAPL, FB, NFLX, TWTR, AMZN, GOOGL, TSLA, and see what they might do in the near term.

The Magic Of Symmetry

The world operates in a mysterious way. There are things that just can’t be explained and act as it is magic, and one of those things is the Fibonacci symmetry.

A Negative Start

February started with a negative tone. The SPX ended the week by losing 60.19 points or -3.1%. New low still outnumber new high, but the advance/decline is holding up while the index is making lower low. This slight positive divergence could be signaling a near term bounce.

Move On Up

After Friday's rally, many market participants were disappointed on Monday by a lack of follow through rally. Instead of a rally, the market sold off on Monday and that prompted many market participants to question once again whether the market is entering into a bear market.

Magic Carpet Ride

Here is what has transpired for the SPX, ES_F and the SPY. Hope you are enjoying the magic carpet ride!

The Magic Continues

The market continues to hold above its 1/20/2016 low and appears be headed higher in the near term. Take a look at the following charts and observe how the price converges toward a particular level, sometime it seems like magic!

Still Being Built

Do not be spooked by today's FOMC announcement selloff. The play has not changed, the right shoulder for the SPX is still being built. These two posts discussed the potential head & shoulder pattern and the forming of the right shoulder: "Fibonacci Magic" and "What Did The Market Do?" Here's the updated intraday chart for the SP500 emini futures and what price actions to watch for the coming days.

Fibonacci Magic

Last Sunday, I put up a post "What Did The Market Do?" which I presented a possible scenario on what the SP500 index might do in the coming days or weeks. In this video, I will present how the current potential relief rally might lead to the scenario I have presented for the SPX using the SP500 Emini Futures.

What Did The Market Do?

Last Wednesday, January 20, 2016, many market internals reached extreme on the negative side. The U/DVOL was more than 20 to 1 favoring the downside during the flush, the A/D line was almost completely dominated by the decliners, and the new high-new low fell below August 24,2015 level. It was like a panic flush. Go back and take a look at the 1/20/2015 morning TICK and see for yourself how many of them dipped below -1000.

Valiant Effort

The market gave a valiant effort on trying to recover from its session loss but fell short at the end. The breadth showed improvement as the buying starts to accelerate and squeezing out some of shorts. The rotation from the A/D line once again gave the clue to be on the lookout for a reversal. The NDX was positive for a brief period with a slight positive breadth. But at the end, the momentum just wasn't there to carry it through with a positive close. Remarkably, the RUT closed with a small gain of +4.45 points.

During the trading session, extremity in the U/DVOL, A/D and new high-new low occurred. This casts doubt on any sustainable rise for the market. Any rally should be viewed as oversold or dead cat bounce until a confirmed low has been made.

AAPL Setup For Earnings

Since the end of last July, AAPL has been on a skid. Recently, lots of talk about AAPL could disappoint on the upcoming earnings report due to Iphone sales slowdown.

Holding On

The market continues to hold above the last August low. The SP500 opened strong, then it faded as the A/D line started to reverse and went negative. Downside momentum dominated throughout the session until the last hour of trading, then the A/D started to reverse a bit and the tick started to show some buying coming into the market. The SPX printed an inside bar spinning top candle, showing indecision. For the non-short term traders, one might consider staying on the sideline until the market give more clarify on its near term intention.