The S&P500 cash index on the two-hour scale is still showing a significant wedging shape with further divergences on the higher highs with the MACD.
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| SP500 Cash Index - 2 Hr - Wedge |
It is difficult to say when the wedge might break. The market has wedged before, then busted it up slightly, and has formed a new wedge. The wedge lines are now "three-touch" trend lines which are a tad more accurate. Price is getting toward the extreme end of the wedge, and it is getting close to decision-time for the market. This wedge can still be counted as a Minor B wave, but the lower trend line must be broken and back-tested with a subsequent failure before a downside count is again initiated.
Have a good start to the evening,
TraderJoe
Great Work TJ, Thank You so much!
ReplyDeleteDuring the same time the Russell was up about 50%
Thanks TJ. I’m heavy cash at the moment and expect a correction soon. The VIX is either not working like the past because of liquidity or we are going to get a big sell off. In ‘99 and ‘07 we had a rising VIX & SPX. Now with SPX at ATH’s VIX is at 23. It should be below 10. Does anyone have an opinion on this?
ReplyDeleteSomething about correlation definitely broken. Stock prices near ATHs and buying of downside protection at historic lows yet VIX nowhere near all time low.
Deletebig tech earnings names next week.. someone will have to report awfully, no?
DeleteVix is at 21
ReplyDeleteHi Tim:
ReplyDeleteIn addition to my reference to Hussman's latest at the end of TJ's prior post, check Lance Roberts: https://realinvestmentadvice.com/technically-speaking-signs-of-exuberance-warn-of-correction/?
Tom McClellan posted a deeper look at the NAIM today: https://www.mcoscillator.com/learning_center/weekly_chart/looking_deeper_at_the_naaim_survey_data/?utm_source=McClellan+Chart+In+Focus&utm_campaign=149071a26b-email_cif_2021-01-21_looking_deeper_at_the_naaim_s&utm_medium=email&utm_term=0_9e79f8200f-149071a26b-151559493
It looks like a lot of weaker hands are using borrowed money to put risk on, given the 50% Russell rise when S&P rallied 17% and the FAANGS largely chopped sideways.
Thanks TerryO
DeleteNo Problem Tim:
DeleteJust got this post from WolfStreet. His graph on total margin debt looks like a clear 5 waves to me, with a little throw-over for celebration.
https://wolfstreet.com/2021/01/21/time-to-worry-about-stock-market-leverage-again-another-wtf-sign-the-zoo-has-gone-nuts/
I was looking at the same post from Tom. If you look at the left of the chart, NAIIM exposure was a lot higher than today and market still gained 350 plus handles.
ReplyDeleteUse that data with caution. It can stay uberly bullish for a while.
Thanks fibonacci:
DeleteAnd as TJ keeps reminding - Patience.
Also, note the progression of the extreme lows in Tom's chart, the next one(s) may be a negative number.
https://stockcharts.com/h-sc/ui. NAAIM
ReplyDeleteTest - https://schrts.co/YyUvPIkH
DeleteNAIMM - Highest reading ever.
DeleteSure enough per Stock Charts, Thanks Tim
DeleteThanks Tim and Terry
DeleteTom Has a MA on that published chart. Just for the record though- I am not suggesting that Market will keep advancing, Contrary rather.
Prices probably stay pinned Friday ahead of OpEx. I think we notch 3900 upside target the final week of January.
ReplyDeleteMy sources show a potential big drop into Jan 29 based on Astro signs. Then up again for a few weeks into may reaching 4200.
DeleteTachyon, Unknown:
DeletePaul Kimble's post re 3900:
quarterly basis since the late 1950s, where Fibonacci was applied to the 1974 lows and the 2000 & 2007 highs. The 261% Fibonacci extension level comes into play at (1), which is the 3,900 level in the S&P.
https://kimblechartingsolutions.com/2021/01/sp-500-testing-top-of-30-year-rising-channel-says-joe-friday/
There is also over 12K Calls open interest in the 3900 SPX strike next Friday, just very few Puts to neuter on the way. To me, we're close enough to 4000 for it to be an attractor if the big money wants it to go there.
The down move is now longer in 'time' than a potential wave ii/b. That is 'typically' how it happens. Yet, to prove an impulse, another wave up must occur.
ReplyDeletehttps://invst.ly/tjo51
Note that the 38.2% retrace, and the prior high are somewhere near each other and may offer some support.
TJ
From where we begin today on hrly cash -
ReplyDeletehttps://funkyimg.com/i/3af5H.png
I was thinking we might close gap at 3799
DeleteGood morning. Just making a note here that the prior high was overlapped. So far, a 50% x iii retrace. Can still be a ivth wave, but new high is needed.
ReplyDeletehttps://invst.ly/tjwwl
TJ
Update on 2hr (cfd) -
ReplyDeletehttps://funkyimg.com/i/3afis.png
I thought the confluence here was worth noting -
ReplyDeletehttps://funkyimg.com/i/3afnr.png
Added note: The HD (2hr) is Connie's target. Andrew's target is confluent with the 2.00 fib level (top of shaded area for "v").
Delete👍 thanks
DeleteCurrently, have retraced to .618 of move down, RSI not yet reached 60 level (basis 2hr).
DeleteWith all those nice confluences for a 5 wave move, probably telling us it will only end up being 3 waves, lol.
DeleteIWM on the 4 hour is back-testing the 20 day SMA
ReplyDelete2hr finished the day with a double close key reversal (down). Ensuing follow through would be required to confirm.
ReplyDeleteAfter talking to stockcharts they said late ‘17 was a bad data point and they corrected the chart. 120 is the ATH. You will notice it takes a few weeks from extreme readings to get a market top. https://schrts.co/eqcCuhpU
ReplyDeleteThere is a new post started for the next day.
ReplyDelete