pebblewriter

Tag: bat

  • Going For It

    ORIGINAL POST:  11:15 AM

    In something akin to a recess appointment, the market is making a run for our target area (the rectangle in the chart below) during a holiday-shortened trading session.  We’ll look at the chances it has of getting there and the most likely impediments.

    First, the little pullback we had to the midline yesterday was the 10-15 points I’d been discussing.  I wondered whether we’d get something bigger, but this morning’s action lays that option to rest.  It does, however, open the door to a bigger pullback at the 1.272 coming up.

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  • Forecast Revision

    Note:  only six charter memberships are left as of EOD Thursday.  I’ll keep this going until they’re gone.  Congratulations to E.J., P.B. and T.J. for locking in today’s annual rate for the life of the site.

    * * * * * * * *

    Well, we got the rebound we were expecting…although it was a little unnerving.  As I posted at 10:30 yesterday — with SPX down 16 points at 1315:

    We had a similar dip the day before Q1 ended, too.  March 29 opened at 1405, dipped to 1391, and closed at 1403.  Money managers like to end quarters on an up note whenever possible.  This feels like a fake out.

    Sure enough, by late in the day we had rebounded to within 2 points of the opening, just like on March 29.  More importantly, we were right back on track with our forecast (the solid yellow line.)

    Likewise, the dollar caught up to our forecast (solid yellow line) in one fell swoop.  I was getting a little nervous, watching the growing divergence over the past few days.  The previous H&S was in danger of being busted; and, although we kept one foot on the long-term channel line, we were moving further and further away from the presumed right shoulder target.  No more.

     

    The pattern over the past 10 sessions suggests we’ll top out this morning at 1357.28.  That’s a Bat pattern retracement from the June 19 1363 high.  I’m also altering our forecast going forward.

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  • There and Back: June 27, 2012

    The market continues to follow our forecast nicely.  Recall we sold our longs and went short at 1330 on Monday’s opening, only to cover and go long later in the day at 1315 [see: Channel Watch].  Now, we’re back to 1332 and still long — as long as the channel holds.

    It’s been a wild couple of days, but we’re net 32 points ahead (yay!) versus just riding it out.  Looking at the bigger picture, I think we’re still well positioned.

    continued…

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  • Harmonics Scenarios

    Periodically, I like to go through and chart the various harmonic scenarios for both the upside and downside.

    It helps to pass the time while sitting and staring at the computer monitor, watching our forecast play out (so far, so good.)

    It’s also helpful in generating a set of potential outcomes for the market over both the near and longer-term.

    DOWNSIDE SCENARIOS

    Remember, all harmonic patterns begin with a significant reversal which we call Point X.  Over the past year, we can identify several obvious Point X’s, each of which generates its own set of Fibonacci retracements when paired with the recent 1422 high.

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  • 2nd Time a Charm?

    Taking another stab at VIX’s daily chart.   Yesterday’s low of 17.09 was just .03 off the .786 Fib level of 17.12 we mentioned a couple of days ago [see: The VIX is In].

    There are a couple of different interpretations.  Fist: that the smaller (red) pattern is complete at the .886 and should reverse strongly.  Second: that yesterday’s low is just a Point B in a larger pattern such as a Crab.  Third, That we should be looking at the larger scale pattern — which calls for a Point B reversal at the .786 of 16.67.  So, which is it?

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  • Fed Up Yet?

    ORIGINAL POST:

    As expected, the Fed threatened much but did little – extending Twist through the end of the year.  Stocks and commodities didn’t much like it; the dollar is up nicely.

    If the sell-off holds or accelerates at all, it will confirm the Point B we placed at 1363.46 yesterday — the Fib .618 retracement of the 1422-1266 drop. It might also confirm my suspicion that the daily RSI pop out of the channel was an aberration rather than a broadening of the channel, as seen in the following chart.  I keep coming back to the RSI chart below because of its import.

    A drop back into the channel to, say, the midline would probably result in a SPX pullback (Point C) to the channel line around 1340.  A drop to the other side of the channel would likely result in a drop to the other side of the price channel — say 1326.

    Even if we were to call the channel broken, we’d still be looking at a very extended rising wedge in RSI — also a sign of an overbought situation.

    If 1363 holds as our Point B, it leaves the door open for a Gartley, which completes at  the .618 (1389), or a Bat, which completes at the .886 (1404).   Either of these, especially if they come on the heels of a more significant dip now, would likely fit nicely with a VIX drop into the low teens, possibly below the 13.66 watermark.

    Note the smaller scale patterns all had their most common targets exceeded during yesterday’s rumor infused ramp job.  So, the possibility remains that the ramp just continues on up this acceleration channel, straight to our upside targets before turning back down.  That’s certainly what I would have expected had QE3 been announced.  But, I don’t think so.

    I think it’s more likely we get one of the paths below.

    While I’ve been typing this, SPX has recovered to almost even.  In fact, it stopped right at the .886 of yesterday’s highs, seen here on the 5-min chart.  BB’s upcoming appearance will be important.  The lack of a serious sell-off after the announcement should embolden them to leave well enough alone — which might be enough to get a little more downside going.

    I’m going to be traveling over the balance of the week, so posts will be a little spottier than usual.  I know I’ve received many questions and comments in the time it took to put this post together, and I’ll try to answer those after I get to LA this evening.

    Stay tuned.

    ********

    For those who’ve asked about the membership special I’m now running… let me clarify.  If you have any kind of membership other than an annual, you can upgrade to an annual for the next two days and I’ll rebate whatever you already paid.  Your annual membership starts the clock ticking again, so you basically get the past however many weeks you’ve been a member for free.

    This is an especially good deal for quarterly or semi-annual members, who can become annual members at very little additional expense.  And, for those monthly members who’ve been trying us on for size, this is the opportunity to lock in your price.

    Why am I doing this?  First, it’s administratively simpler to deal with one transaction a year than multiple ones.  Second, I’m trying to encourage more members to join.  We have six times as many page views each day as we have members.  So, I know a lot of folks are thinking about it.  And, there are less than 20 charter memberships left — where your annual rate is fixed for the life of the site.  I’d love for existing members to have first crack at them.

    And, perhaps most important of all, the more members we have on the site, the more time I can devote to it.  So, tell your friends and neighbors.  Remember, when they sign up as an annual member, you get an additional 3 months tacked onto your membership just for the referral.

     

     

     

     

  • Update on Gold: June 18, 2012

     

    GC soared over $1200/oz since losing 30% in sympathy to the global market meltdown in 2008.  Most of that rise took place in an acceleration channel.

    In the past year, however, the most prominent pattern has been the descending triangle (purple, dashed.)

    Continued…

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  • NYA Update – June 3, 2012

    The May 8 forecast for NYA was for the index to plunge from 7815 to 7340.  The forecast worked out well, as Friday’s low was 7286 (a quick 7% return, yay!)  As noted in that update, 7340 doesn’t really match up with any particular Fibonacci levels.  And, it doesn’t intersect with the rising wedge until early August (the highlighted oval.)

    I didn’t really see it taking that long to play out, and the market obliged for a change.  It also obliged by precisely tagging the fan line I had drawn off the Oct 2007 top (yellow, dashed) and one of the parallel horizontal channel lines (redrawn as red, dashed line E for emphasis.)

    We still haven’t landed exactly on a Fib level, so we either just overshot the .500 or haven’t yet reached the .618 target of  7145.  Deciding which it is presents some interesting questions.

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  • Channeling VIX

    VIX has very nearly reached the channel mid-line, Inverse H&S and Crab pattern targets I posted back on April 18  [see: VIX at a Crossroads], though we’re 2 days behind schedule.

    Our IHS target was 28.10 and the Crab pattern target was 27.12, expected to occur on May 30.)  Friday’s high was a very close 26.71.  It’s close enough to be considered complete, but a little follow through Monday morning would tie things up in a nice neat bow.

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  • The Road Ahead

    I’ve taken advantage of a relatively quiet morning in the markets to finish mapping the road ahead.  There are quite a few harmonic patterns in play right now.  My practice is to map all the apparent possibilities and look for confirmation (or lack thereof)  between patterns — and then look for ways in which they agree or not with all the chart patterns, channels and analogs I’m watching.

    It’s fairly exhaustive, so takes a fair amount of time.  I hope to post the results in the next hour or two.   In the meantime, the short-term forecast is still for increasing prices.  This morning’s chop does nothing to change that, but does illustrate the importance of using stops.

    Like yesterday, l will occasionally post short-term trading opportunities.  For traders so inclined, the idea of shorting at 1328 and buying back at 1298 is a great trade.  But, it requires a certain degree of vigilance.  For the buy and hold crowd who aren’t interested in 30 point blips, feel free to ignore such forecasts.

    Whichever camp you fall into, please remember to use stops at all times.  These are very precarious times, where unforeseeable events capable of moving markets are unfolding daily.  Please don’t get caught with a significant portion of your net worth hinging on any particular forecast — mine or anyone else’s — without protection.

    For those of you who who haven’t yet signed up, prices are going up at midnight tonight (PST.)   Current members are not affected, of course.  And, as before, the first 100 annual members are grandfathered for the life of the site.  If you’re a quarterly or semi-annual member, you might want to consider upgrading to annual.  To sign up, click here.

    Stay tuned.

     

    Update:  2:30 PM

    The 5-min RSI just broke out from a falling wedge on positive divergence.  If it can stay above the upper bound this morning’s decline should be erased, and then some.  Watch for a back test of the wedge, which would correspond with a back test of the little red trend line at around 1311.

    Still working on the longer term picture.  I’ll send a message as soon as it’s posted.  At this point, all members should be receiving an email within minutes of when a significant post or update is posted.  Please let me know if you’re not receiving these messages.

    I’ve put the texting option back in the sidebar to the right.  Just enter your cell phone and service provider and you’ll be notified of new posts.  Note:  it doesn’t notify you of post updates, just the initial publishing of a new post.

    UPDATE:  4:05

    That worked out pretty well.  The falling wedge paid off as advertised, turning an 8-pt decline into a 2-pt gain at 1310.50 — just a smidge below our 1311 target.  I hope readers were able to take advantage of it.

    Since I didn’t complete the longer-term picture before the close, I’ll work late this evening and try to get it up before turning in.

    BTW, I get a number of emails during the day from readers, and I’m good with that.  But, I much prefer that anything market related — questions about strategy, investment options, etc. — go into “comments” on the post.  I’m likely to see them more quickly, and more importantly, your fellow readers might benefit from the discussion.  Thanks!