Sunday, October 30, 2011

"Then the third phase begins..."

Evidence suggests that stocks are in a bear market.

The upper chart is the ratio of the equally weighted S&P 500 to the popular, market cap weighted S&P 500. This ratio is a measure of internal market strength. Note that a big divergence between the actual S&P, the lower chart, and the ratio has formed.

The green box noted "major topping formation" is synonymous with "distribution" in following quotation from Edwards and Magee's Technical Analysis of Stock Trends. It describes this year very well.

"Primary Downtrends are also usually (but again, not invariably) characterized by three phases. The first is the distribution period (which really starts in the later stages of the preceding Bull Market). During this phase, farsighted investors sense the fact that business earnings have reached an abnormal height and unload their holdings at an increasing pace. Trading volume is still high, though tending to diminish on rallies, and the “public” is still active but beginning to show signs of frustration as hoped-for profits fade away.

The second phase is the Panic Phase. Buyers begin to thin out and sellers become more urgent; the downward trend of prices suddenly accelerates into an almost vertical drop, while volume mounts to climactic proportions. After the Panic Phase (which usually runs too far relative to then-existing business conditions), there may be a fairly long Secondary Recovery or a sideways movement, and then the third phase begins."

The third phase is another down leg.

Friday, October 28, 2011

S&P 500 Intraday Bias, 10/28/11

At 10:00 AM, neutral, suggesting consolidation.

Thursday, October 27, 2011


spx is at its 200 day moving average, which should act as resistance. I believe that it is a good time to begin selling.

this post was written from my android phone. I currently don't have a internet connection

Monday, October 24, 2011

S&P 500 Intraday Bias, 10/24/11

At 9:45 AM, positive, suggesting buy the dips intraday.

Monday, October 17, 2011

S&P 500 Intraday Bias, 10/17/2011

At 10:05, negative, suggesting sell the rallies intraday.

I believe we are at, or close to, a b wave decline.

Friday, October 14, 2011

S&P 500 Intraday Bias, 10/14/11

At 10:22, positive, suggesting buy the dips intraday

Thursday, October 13, 2011

S&P 500 Intraday Bias, 10/13/11

At 9:50, positive, suggesting buy the dips intraday.

Tuesday, October 11, 2011

S&P 500 Intraday Bias, 10/11/11

At 9:55, neutral, suggesting consolidation will occur.

Friday, October 7, 2011

Scheduling Conflicts

I know that this coming Monday and Wednesday, I will also not be around to post the intraday bias. This uncertain availability is a developing trend. I'm deliberating whether I should post the bias sporadically, or discontinue it, and just keep doing the occasional analytically posts if I've perceived something that may be useful.

S&P 500 Intraday Bias, 10:00 AM

No clear signal now. And I will not be able to monitor after 11:30 AM.

Thursday, October 6, 2011

Intraday Bias 11:06 AM

I apologize for the whipsaw, but the bias has turned positive, suggesting by the dips intraday.

Intraday Bias 10:00 AM

Negative, suggesting sell the rallies intraday.

Tuesday, October 4, 2011

Seems like a bullish trend reversal day


If the above wave count is correct, a 3-wave counter trend rally is in the horizon.

S&P 500 Intraday Bias 9:55 AM

Pre-Bernanke, negative, but oversold.