thu. 12_1

DIA - made a lower low.  Tomorrow's open should determine whether the daily is diverging from the momentum indicator.  The hourly showing a small inverted H&S so a breakout from the neckline could see a move at least back to $159

IWM - Holding the 50-day MA with a small doji around the previous day's close.  A good example of the "XYZ - corrective wave" which stands out really well with the 3/10macd.

As an aside; in both the DIA and IWM above there are pitchforks which came close to, but did not touch their midline.  According to Andrews there is then the expectancy that price should move to the "trigger line" (shown in fuchsia).

The QQQ has still not tagged it's 20-day MA (sign of strength) and is trying to hold the double-bottom at $85.  I would suspect that immediate lower prices will get bought.

SPY has support below from the previous breakout area in November

The buying momentum today was pretty strong coming after a "triple swing divergence".  This large momentum is registers a reverse divergence and so the fade from that move could be pretty strong.  I would assume lower lows will be bought and a gap up (178.70 perhaps?) might get chased.  Previous triple swing divergence-turned-momentum-fade was 12/4; new lows were bought sharply but it needed a day to consolidate.

For now, there are lower highs and in some cases lower lows in place.  But buyers will begin to nibble and squeezes in both directions are likely to take place.

Fri. 01_18

today's trade:

A key for the above chart to define the horizontal lines and dots.  For further explanation, see this link:  

Blue arrows are entries, black are exits.  "X" indicative of a trade considered but not taken.

Higher time frame showing 2c-2d

Finally, the weekly.  Points worth considering:

-Corrections have become shallower since 2012.  

- Breakouts from previous highs have seen diminishing returns

- As old highs (or in this case, all-time highs) are approached it is common for positions to be thinned.  Pros don't want to buy at the highs or as price breaks out, they would prefer to buy a re-test of the breakout point.

I still believe this is an important divergence to keep in mind.  The QQQ weekly head and shoulders.  Invalidated above $67.50-$68 and the neckline coming in around $62.  If this were to break down, a measured move would be around $53 (which would still maintain the higher low structure).