ORIGINAL POST:

We just tagged the two harmonic targets discussed yesterday: the 1.618 of the smaller, red pattern (from 1334 to 1266) and the .707 of the larger, purple pattern (1422 to 1266.)  In so doing, we’ve gone about as far as we can within the (red) rising wedge here at 1377.

The wedge must either break out or break down.  They usually break down; but, either way, it should be enough of a move to flesh out the small (purple) channel some.

The trend remains up, but I will look for any weakness to scalp a few points on the downside, with an objective of 1367 and stops at 1380.  Absent any weakness, I’ll hold long.  Prices often move sideways just prior to options expiration day. (more…)

When we last left off on July 2, COMP was pointed toward a forecast of 3044 — the .886 retracement of the most recent decline from 3085 to 2726.  Since then, the slightly larger pattern has begun to look more well-formed; that is, the drop from 3134 to 2726.  This puts a Point B very close to the .618 on July 5.

continued…

(more…)

ORIGINAL POST:  9:33 AM

SPX reacted off its .786 yesterday exactly as expected.   For those who played the Gartley Pattern and shorted at 1364.24, I don’t think this dip will be significant.  The potential Point D’s when we’ve put in a Point B at the .618 are:  Gartley at the .786, Bat at the .886, and Crab at the 1.618.

Of course, if we get much of a reversal at the .786, it opens the door to that Point D at .786 being shoved into service as a Point B in a Butterfly pattern — which gives us a potential Point D at the 1.272 as well.

In other words, a .618 Point B opens up the possibilities of the next reversal being at practically any of the higher significant Fibonacci levels!  The trick, with a smaller pattern like this, is to examine the various Point D targets and see which is most likely.

continued… (more…)

We last focused on the NYSE composite on June 3.  The index had fallen almost 1,000 points in a month, closing just below our 7340 target and earning us a quick 7% since our previous forecast.  It was catch-a-falling-knife time:

It also appears from the RSI and channel charts I’ve drawn over the weekend that a slightly lower value would be the perfect fit… though the daily RSI tags on that dotted white TL, combined with the positive divergence, argue that we’ve bottomed already…. A bounce off the fan/channel would likely retrace to the .886 Fib…

We did indeed bottom out during the following session.  Since then, NYA has climbed back nearly 10%, up to the Fibonacci .618 (so far) of the previous decline.  It’s taken longer than anticipated, but we’re generally following our previously forecast path (the dashed blue line.)

In that June 3 post, we raised a number of important issues relating to the ultimate target.  The chart above, for instance, shows a large potential H&S pattern forming.  That pattern, in turn, is vying for the job as right shoulder of a much larger H&S pattern.

In the short run, NYA presents a very straight forward chart.  There are a pair of channels to consider — along with an Inverse H&S target that intersects them as early as the next few days.

We also have the makings of a Gartley or Bat pattern.  Note the July 3 Point B at the .618 retracement of the March – June decline and a tentative Point C within the red channel.  Gartleys complete at the .786 after a .618 reversal.  Here, that signals 8091.24.  And, Bat Patterns complete at the .886, or 8201.

But, the intriguing price level is that of the Inverse H&S target at 8033.  It’s 3.066% higher than today’s close.

If SPX were to tack on 3.066% to today’s close of 1363, it would reach 1404 — which just so happens to be the upper end of our target price range.  Of course, then we’d have to decide whether there’s more potential upside or not.

To be continued…

ORIGINAL POST:  9:20 AM

Yesterday, we got the back test of the white channel line as expected, putting in a low of 1348.51 before rebounding 5 points to close at 1353.64.

Pebblewriter.com is dedicated to forecasting markets.  Since I’ve been fixated on the same upside targets for almost a month [see: Fed Up Yet? and OPEX Games], I thought it would be interesting to see what evidence still supports these targets.

continued… (more…)

We got the close above 1350 we were looking for Friday.  As discussed then, the next important test is the trend line connecting the April 2 1422 high with the last interim high of 1374 on July 3.

While the market seemed to have plenty of momentum coming out of Friday, this TL might not be a pushover.  It has many cousins who’ve proven their mettle over the past year or two.

continued…

(more…)

Going long again at 1327 is paying off nicely [see: Shakeout or Fakeout], with SPX currently trading at 1353.  We had a nice reaction off the Fib .382 at 1326.19 and have obviously broken out of the little red channel that was guiding the downside. (more…)

ORIGINAL POST:  9:00 AM

There comes a time in the construction of every channel when the market either obeys a presumed channel boundary, morphs it into something else or breaks it entirely.

We’ve had a very well-behaved channel off the 1266 bottom on June 4.  I’ve had to make small adjustments to the channel on the daily chart a few times.  But, the 60-min chart shows just how precisely yesterday’s low fits with the previous lows. (more…)