Although the S&P rallied 0.1% on Tuesday, the overall action resulted in an inside day, i.e., a lower high and higher low than what was seen on Monday. Volume fell back below four billion shares (versus Monday’s 4.7 billion shares). Breadth was negative by a 4:3 margin but up volume outpaced down volume a by 6:5 ratio. The daily Coppock Curve still has a bullish bias for all 24 S&P industry groups.
S&P 500 Hourly
Given the inside day, there is not much to add to the comments of recent days. The daily Coppock Curve is likely to maintain a bullish bias for another 5-6 days, but has yet to confirm the recent highs. Meanwhile, the weekly oscillator is overbought and deteriorating. In addition, the rally from the November low is more corrective than not, which suggests that it is an ending pattern. The risk is that it is an ending pattern relative to the entire post-July rally. As a result, a breach of the uptrend from the early November low would be an early warning sign prior to a potentially important decline.
As for resistance, the downtrend line from the 2007 high is currently at 1109.10 on the weekly chart. A decisive breach of this line would clear the way for a full challenge of the 1121-1156 resistance range that we have regularly highlighted.
Last week’s test (at 1085) of the post-March uptrend line is first support. A break of that level would be further evidence that the rally from the November 2 low is corrective and would increase the risks for a test of the important 1029-1020 double-bottom.
"In addition, the rally from the November low is more corrective than not,..."
ReplyDeleteYour mkt blog is one of THE best that i have seen, but IMO that chart & interpretation is highly subjective (vis-a-vis impulsive versus corrective) as is Elliott Wave (unfortunately).
One of the most bearish things occurring currently is the stealth aggressive selling in GS.
Thanks for the compliment. I don't totally disagree with your "subjective" comment but after 30 years at this, I endeavor to look at enough evidence to take as much subjectivity out of the equation as possible
ReplyDeleteI have noted your non-Elliott Wave evidence & it is & has been much appreciated.
ReplyDeleteOrdinarily, i don't believe in metrics or measurables to judge the value of something. However, i think it would really be interesting to quantify how right one has been using EW for near or short-term forecasting.
IF one was only right, let's say 25% of the time, wouldn't it be a waste of time, effort, & missed opportunity (going the opposite way)? Increasingly, i think that EW is a waste of time other than IT/LT & then only used in a top down not bottoms up approach. IOW, used only NT/ST when the IT/LT forecast is coming to a conclusion, but NOT to build a case bottoms up.
I think EW for many traders is like crack or meth (i have no personal experience in this area, thankfully, BUT i do know how difficult it is to wean oneself away from reading a mkt blog no matter how wrong it has been for ever so long. And i am not referring to this one which I hold in high regard. In the past, i have regularly read PH, TB, CF long past when i thought that they actually knew anything.)
EW is something that it's very helpful to know something about & very harmful to use too much. It provides one with some insights few other theories do, but OTOH using EW one also hears the train whistle in the proverbial tunnel too often, too. In the end, using EW bottoms up on a daily/NT/ST basis may have less usefulness than Parabolic SAR which I haven’t looked at in over 25 yrs.
Nothing says that you can't use the SAR to help you count waves!
ReplyDelete