• 518 days Will The ECB Continue To Hike Rates?
  • 518 days Forbes: Aramco Remains Largest Company In The Middle East
  • 520 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 920 days Could Crypto Overtake Traditional Investment?
  • 925 days Americans Still Quitting Jobs At Record Pace
  • 927 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 930 days Is The Dollar Too Strong?
  • 930 days Big Tech Disappoints Investors on Earnings Calls
  • 931 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 933 days China Is Quietly Trying To Distance Itself From Russia
  • 933 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 937 days Crypto Investors Won Big In 2021
  • 937 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 938 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 940 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 941 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 944 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 945 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 945 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 947 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

Bull meets Bear!

In my August 19th update I stated:

"Looks like we now have the last finishing touches of an impulse leg from either the Aug 10th or 11th low. Along with that I have a SPX-VIX sell signal into the close and we are up against a lot of resistance as seen in the chart below. Combine the three, and we have the ingredients for a healthy consolidation/pullback into the next week. Besides, this leg seems to be ahead of itself timewise. After that pullback, I expect to see additional gains as the SPX and Dow try to make a new high for the year. We will be monitoring that pullback very carefully, as we want to make sure that we didn't just finish an extended ABC up to Friday's high."

Below is the updated SPX chart that shows how we did indeed consolidate the following week after finding resistance at that midline of a 2-year-old fork. The market then went to test my Fib support at 1290.50 twice, before making this weeks advance. As many traders were shorting into yet another trap, our members had no trouble getting long once the SPX made that double bottom on 1290.50!

Finding support at that Fib level caused the SPX to slowly grind up into Friday's high taking out the midline off the fork, the .786 retrace level, and also the weekly parallels we have been watching since the start of the year.

We now have resistance above us at a 1317 Fib level. If we take that out, the 1360 level will look very realistic! Until we do take out 1317, I'm a bit cautious since many things that we monitor are finally flashing caution. We also need to watch the possible repeat of the 2000 top, where it made a high in March and then a lower high the day after Labor Day.

The easiest thing for the market to do next week is to rally, and then fail, putting in a reversal day. Even then, you need to make sure it's not another pullback within the rally from June. A turn next week, that finds support into my CIT date of September 22nd, might just set up that last blast. If not, you might be seeing a top next week. Sentiment readings still argue that a final top isn't in yet.

The next chart is an update of the OEX that caused me to turn bullish several weeks ago. On Friday, this market reached the lower band of our resistance at 605/615. You can also see that the RSI has now reached its trendline resistance as well, but is not diverged within this move. I'm sure this market will also find resistance next week, but the RSI could also be hinting that another high might be ahead of us.

The bottom line is, this is where the market will make a decision to what the May high was. Don't be fooled by the last 2 weeks of sideways action, the market is about to get very interesting. In the next few weeks the bulls will try to push to new highs, as the bears will try and sell it into the 4-year cycle low.

Sign up for a FREE TRIAL and decide if you can use our service as the markets gear up for a wild September.

The markets now request constant analysis of their chart patterns and we continue to do that everyday. We cover a variety of markets such as the U.S. and European Financial Markets, Currencies, Metals, Energies, Stocks and Commodities. We use methods like Elliott wave, Gann, Delta, and many proprietary indicators.

 

 

Back to homepage

Leave a comment

Leave a comment