o/n ES

ES potential:
- Higher time frame showing an inverse head & shoulders pattern
- Faster time frame showing a bear flag
The faster time frame bear flag could still partially break down (as it appears to be doing now) and have the inverse H&S remain intact.  Essentially, bullish above 1313.75 and bearish under 1300.  The 240-min could be setting up the 3d criteria,  It would be best for the 240-minute to hold/regain it's 50% Fib. retracement.

With that said, the 2c-2d criteria is showing on the daily.  As mentioned before, the 2c-2d criteria on a higher time frame shows as a 3d (3-pushes to a low, inverse H&S, or double bottom) on a faster time frame (which is what the 240-minute is showing).  Also, the next move higher should either set up a lower high short setup or a breakout to higher prices.  Whichever direction it goes, the momentum should be the clue to our measured move.

Tues. 1_31

Not much going on today.
GLD 2c-2d setup (Inverse H&S)

SINA end of day breakout of 2-day triangle.  1a setup.  Actually held 1/4 position (covered 15-cents above entry) which was stupid in retrospect.

Didn't trade this AMZN setup, but was a good looking setup.  I would refer to it as the 3d setup but it was 'technically' a 1d.  Irregardless it had an inverse H&S pattern.

Mon 1_30

3d setup in IBM this morning.  There are two Fib. projections made; one off the opening low/high, the second off of a smaller wave before price broke out (I inadvertently covered up the smaller flag with my up-arrow).
The 100% projection of the smaller flag was $191.82 which was an intermediate resistance level from 1/26.

SINA 2c-2d setup.  Notice the inverse H&S on the 5-minute chart.  Half taken off at the 50% projection and the other half taken off above $71 (I had an order to get out at $71.50 but when it missed it by a few cents I just closed out the position).

NFLX 2c-2d setup.  The two up-arrows on the 5-minute are not aligned.  The up-arrow on the indicator was the trigger, but the up-arrow under price was my entry.  The actual "trigger" candle was the one which comes after the up-arrow.   Half taken off at the 50% projection, the other half below the 50% projection.

fri 1_27

The SPY set up the 3d criteria while the trigger coincided with both a 3d criteria on the 5-min chart and a trend line break.

POT had a decent trend to it and price continued higher after it pulled back.  Two entries with very small stops in place.

SINA was a heart-breaker.  Position size was small and exits were way too soon.  Trade was based on the 3d setup.  First up-arrow long and sold at the highs of the day.  Second up-arrow long and sold at around $64.80 (was shooting for $65.38 resistance but what I perceived as failure under $65.25 made me get out.

and of course here is what it did afterwards...uggh

thurs 1_26

When the 2c-2d fails:
  There comes a time when buying the dip in a trend doesn't work out.  Today was such an example; where the 2c-2d buy setup turns into a 4c short setup.  
  Coming into 11:30 (CST) we had a 2c-2d criteria which was also a momentum buy divergence.  We got a buy signal (following the 3d setup on the 5-min chart) but price failed at resistance and rolled over.  This roll-over turned into a 4c short setup on the 15-min chart.

Wed. 1_25

NFLX set up the 3d criteria into the close yesterday, was looking for follow-through on the open for a quick trade. 

I was watching the 2-min chart for this trade, with a target of the 100% Fib. projection which lined up with a resistance level.  I wasn't filled at the $95.15 price so just covered after the doji.

Big day in gold today.

NEM posted a strong day today.

again, the 2-min provided cleaner entry

Finally, another example of the 2c-2d setup in the ES today.  The Fib. fan (5min chart) provides good resistance (magenta) and target (blue) points.  Again, the 2c-2d is a reverse divergence and is buyable following the 3-pushes to a low (or inverse Head & Shoulders, 3d setup) on the faster time frame:

missed it

Missed the entry in IBM this morning, but a good example of a strong trend continuation.

GMCR was a good 3d setup this morning

3d continuation

3d setup into the close on Friday, continuation into this morning's open.

This was followed by a 2c-2d setup in the afternoon

2c in Crude

A good example of the 2c-2d setup in Crude Oil today.
Reverse divergence on the 15-min chart that sets up the buy entry on the 5-min chart with an inverse H&S pattern.

wave 3

A seed wave is a momentum move that follows a down trend which forms its first higher low, sending prices higher.  Since the March '09 lows we have had 3 such seed waves.
The second seed wave coming off of the July 2010 lows has already run its course culminating at the 200% Fib. projection.  The other two, however, are still in play. 
Wave 1's 150% projection lines up with the Wave 3 50% projection around the $140 mark.  While the 200% projection of Wave 1 has a $154 target, nearly lining up with the 100% projection of Wave 3.

Cycle update

Thought I would update the bar count on the S&P500 cycles.  If you're not familiar with the Stevenson PTT you can refer to the link embedded here.

Spanning the years 1995 through 2007 the S&P enjoyed quite a symmetrical cycle phase.  We had:
- A 64-month rally from 1995-1999 followed by a 31-month selling phase for a total of a 95-month long cycle.
- The 2002-2007 rally lasted for 61-months, culminating in a 92-month long Inverted Cycle.
- With extreme volatility came the completion of our next Regular Cycle which lasted only 78-months due to the rapid selling which took place over the course of 18-months between Nov. 2007 & March '09.

 The end of one cycle and the beginning of another is determined (by Stevenson) by the close outside of its Cyclic Trend Line or CTL.  This actually happened back in July of 2011.  The chart below shows a closer image and adds the CTL (magenta trend line), highlighting the price close beyond that point:

 What is interesting is that IF the long time frame Inverted Cycle has concluded it would have done so in 44-months, which is pretty close to half the length of the previous three cycles (which would make sense given the extreme volatility).  We can't say for sure that the cycle is complete (as price did make a higher low) and price is just throwing back to the CTL, or if the cycle is still intact.  We can only say for sure that the cycle is still intact IF price takes out the May 2011 highs, in which case we would re-draw our CTL and consider the Inverted Cycle to remain intact.

Since the 2009 lows price has formed some pretty symmetrical intermediate cycles that have averaged 16 months in length, of which we are in the 9th month of an inverted cycle whose price and time target (red dash line) is just beyond the May 2011 high, projected to be within 7-months.  Again, prices beyond the May 2011 high means that the longer-term inverted cycle is still intact.

weekly closed

Price continues higher
SPY - strong close above $130

DIA
Keep on keepin' on

QQQ - $60 was oh so 2011.  Base is in place

IWM - strong close above $77...game on

Fri 1_20 OpEx

A 3d setup into the close on the SPY

While the DIA had a trend day

It would appear we are breaking out (on weekly charts).

Thurs. 1_19

The QQQ has made a fresh 11-year high today.  There's the chance that we could get a climactic capitulation move followed by a strong (healthy) correction, but then there's the chance that price completely detaches from rationality.  Over the course of 1-year the QQQ has tried to achieve the $60-mark 4-times.  Now it seems to be accepting $60 in its 5th attempt.  Some bearish scenarios would be a blow-off top at the trend-line throw-back or a 2b-top setup.  Otherwise, this rocket could be ready to launch.  Maybe we end up seeing $70 before $55.

wed. 1_18

Way too many setups to post today.  There's always at least one 'good' day during the week of OpEx.  The trick is to not get chopped-up in the not-so-good days of the OpEx week.
Here is a split time frame of the ES as we were going into today.
The higher time frame trend has been very strong and continues to put in higher lows and highs.
Starting from left to right; the 240-minute chart shows a strong trend with the 3/10macd showing the 2c/d criteria, so we would look for a 3d setup on a faster time frame.  The 60-minute time frame provided the 3d setup while the entries on the 15-minute chart are highlighted with up-arrows.

Notice that the 3d setup occurred in the pre-market (around 5am EST) as well.  In this case the move was quick and after testing resistance price conveniently returned to the 1287.50 support just in time for the Open.

update

I posted this SPY weekly chart a while back showing similarities in price structure, then and now. Currently price is trying to recover the neckline to its previous H&S top:

And the DIA throw-back to its H&S neckline:

The QQQ and what could be perceived as a complex H&S pattern:

The IWM right at the neckline from its previous Head & Shoulders top:

 It is what it is.  Throw-backs often expend a lot of energy only to run out of steam and have the bottom drop out.  It will take some strong upward momentum to recover, and it needs to do so soon in my opinion.

tues. 1_17

Boring day.  Many trades ended up being closed for break-even.
AMZN was a good long, but took it off WAY too soon.  I actually exited on a trigger to go long (second up-arrow under the macd).

FSLR long was basically a b/e trade, really should have gone short at $40.25 for that 2b short setup

GS long, another b/e trade.  I was targeting the $100.35 area and price just came short.  The short setup played out well though (2d-to-4c continuation, a.k.a. Bear Flag).  The first up arrow and first down arrow are a long entry and the long Sell to Close. 

Overnight ES

Just a quick look at the ES overnight pre-holiday edition.  Whatever it does likely will not include the higher time frame "big money", but it is what it is.  A split view of the 15-min (left) and 5-min (on the right).  The 15-min is showing the 2c-2d criteria (pullback following bullish momentum while showing a reverse divergence) while the faster time frame is setting up the 3d criteria at support.  Looking for price to break the overhead trend line (on the 5-min chart) and the fast line turn green.

Well, it had a rough go of it, but was able to test higher without breaking down from support.

AAPL flag

First of all, you just can’t shouldn't fight this trend:

It's worth watching this flag for a break higher

small inverse H&S on the intra-day chart

Of course, if it breaks that $418 area below it could create an abandon ship type of move and could be worth a short position for a day trade.

Copper Rally in the making?

Interesting  bullish developments in Copper.
The daily time frame broke out of a symmetrical triangle with decent volume after consolidating a strong sell-off.  The weekly showed that regardless of the strong momentum behind the September selling, price consolidated constructively above a previous swing low (above $3.0).
This symmetrical triangle breakout gives a measured move which coincides with a 50% Fib.  projection off of the seed wave which has formed since the October lows.

Look at the monthly chart and we get even further warning that price could rally hard from this point.  After all, price broke down from a trend line that was in place since the January '09 lows and a throw-back to this trend line wouldn't be out of the question.
So, say we rally to our symmetrical triangle measured move (50% projection) but then fizzle out.  This could then set up a pretty blatant Head & Shoulders pattern (neckline at the $3.00 mark).

Essentially, a rally looks to be in the works, but it would be prudent to stick with fixed targets (namely that $4.14 measured move price point) as there is obvious overhead resistance to overcome.  Also worth remembering, should the breakout fail then longs will be trapped, creating a strong move in the opposite direction.

Worth Watching

Going into this next week or two I'll be watching for AMZN long entries.
The higher time frames have a strong trend in place, with trend line support.  The recent downside momentum was the largest ever, which could be an omen for things to come.  However, this shows itself as a reverse divergence on the higher (monthly) time frame which often leads to snap-back rallies (which may or may not form its first lower high).
Monthly:  Trend intact, reverse divergence (2c criteria).

Weekly:  Trend line holding on a small divergence

Daily & intra-day charts:
The daily has an inverse H&S pattern on diverging momentum (setting up a possible 3d setup).  Certainly wouldn't want to see it give up $170 below (actually wouldn't want to see it fail the 50% Fib retracement of the Head to right shoulder).  The first hurdle above will likely come from the $182.76 level.
Primary target $199, secondary $216.  Essentially I'd like to see a break of the overhead trend line on a strong momentum bar.