US Stock Indices

[Guest Condor]

yes, my accuracy isn't the greatest, it's hard lining up on the screen from February but overall (with a degree of tolerance) we must be pretty close to a drop down.  If a 1-2-3 plays out over next couple of days......... $$$ . C

[Guest Condor]

The bulls have already pushed it back up inside your tramlines, they're not giving up, C

[Mercury]

S&P joins the Bear party with a new lower low.  Similar set up to the FTSE100 and Dow tracing almost exactly the same as S&P.

 

Ending triangle showed the market top followed up by a larger triangle break and kiss back at 62%Fib in classic A-B-C retrace form and then rebounded back off the kiss strongly.  New lower low confirms the move for me.  Now looking to add to my Short positions on the next reasonable retrace rally.  In Dow terms this could run for 1000 points.

 



[Guest Condor]

I'm still sitting on my hands on US500 / Dow / FTSE....the  red line has not been hit..yet...feels like it should to make sense of the gravity defying indices, C

[Guest Condor]

seems like the indices are all hanging in mid air like Michael Jordan 

[Mercury]

LOL!  Are you actually in a position or just waiting to find an entry?

[Guest Condor]

no entries on FTSE, WallSt. S&P yet, just back to my desk , watching them fall, not trading , yet..........

...of course if I jump in theyll go back up so I'm watching red just now

update 21:06 and now theyve starting turning around - Amazon released decent numbers I think

... if we can get into a pattern of lower lows , lower highs , of which this could be the start........, C

[Guest MrJake]

It was nice to see the recent drop and I am certainly looking for more.

 

At last, my short positions are coming to fruition

[Mercury]

A fellow jaded Bear ?  I know that feeling.  I am reminded that I should be trading what I see and in retrospect this rally was much longer and stronger than I had thought it would be but given recent history on these markets and the CB drugs being handed out like candy we should not be surprised that Fib 76% and even 88% are more common than normal conditions.

 

One thing to watch out for is loosing faith and switching tack just as the market turns in our favour.  Having said that if we do not get a serious bear run now then new all time highs have to come into serious consideration.

 

For now I think a decent Bear to Fib 38% on the daily (circa 1000 points from the top on the Dow and same on others) is on the cards.  Japan has shown the way.  For today US opening will tell a tale.  I can foresee a short rally up to the fib 50% (also short term resistance - red line on chart) off yesterdays last high before a large plunge, especially as investors start to fear what might happen over the weekend and consolidate their positions (also a month end of course and bank holiday in the UK at least).

 

Here is my S&P hourly chart (thoughts anyone?):

 



[Mercury]

One additional thought, of course the US futures and European markets may begin the plunge early...  

[Mercury]

VIX has just spiked to 15.5 from 13.5 at the beginning of the week.  Lower lows on all markets except FTSE but that is well on the way and breaking my lower tramline.  I really think we can declare this a Bear move, for the medium (next week or so) term at least, after that we shall see.  Shorts are the only stock index trades worth he risk, sell the rallies.

[Guest MrJake]

Hi Mercury

 

Jaded yes, battered and bruised yes, but I have a cunning plan :-)

 

 

[Mercury]

Ok I'm intrigued...

[Mercury]

Is it something other than Short the backside out of this market?

[Guest MrJake]

I have been slotting in a few buys along the way, so I suppose working within my longer term plan

 

The next step I am looking for is just below 17600

[Mercury]

17600 Dow for a Long?

[Guest MrJake]

No that would be for a short to come out.

 

Then consider tactical Buy just below this point

[Mercury]

Ah ok, my view is this one will run a long time so I'm sticking in for the Fib 38% as an initial target area.  If this turns out to be a strong bear run going Long is a high risk strategy with poor risk return ratio.  Such a bear run moves very fast and very long, the last one (4 Nov 2015) only took 5 or 6 days to make the first run and dropped 900 points on the Dow. 

[Guest MrJake]

I understand what you are saying. If you look at the charts set at "Weekly" we can see that drop. However it is followed by a bounce back to 17915.

 

I am working on the lower end of my shorts to be below 17240. 

[Mercury]

Yep and we should see something similar this time too and then we should get some clarity on whether we will get a bigger drop or push on up.  Given the rally was stronger this time I expect a longer drop.  Daily Chart resistance level looks good around 17100.

[Guest MrJake]

Have a look at a 30 minute chart for Dow and compare this with Ftse 100. Have we had our little "flurry" and looking to move lower?

[Mercury]

I guess the answer to that is Oh Yes!  FTSE and DAX have made fresh lower lows (the FTSE after being reluctant to do so on Friday).  Will be interesting to see what happens when the Us opens in 15 but for my money we can look forward to a red week!  Make the most of it is my view but tread carefully we could see some swift moves in both direction before sustained drops, sell the rallies.

[Mercury]

The US markets are opening in bearish fashion, a close below recent lows will be a welcome sign for Bears.  So far the US markets (DOW and S&P at least) have turned at a plausible big picture W2 (but more on that in the weeks to come).  For now we have seen a 1-2 move in classic 1-5 down and A-B-C up followed up by another 1-2 of wave 3 and now, if or when we see a lower low we can judge the Wave 3 bear to be on.  Cue a red week and a run down towards 17000.  If this is the beginning of a long bear run we should get a significant retrace from about this point but let's worry about that later and ride this bear...

 

 

[Guest MrJake]

The "Flurry" earned me a few pounds yesterday and now we can looked forward to a rapid drop!

[Mercury]

For anyone still active out there, and given the importance of the US markets I guess that should be most of you, I reckon we are in a EW1-2 retrace within the larger Wave 3.  This should complete around the Fib 50% (near the last little resistance level).  You might need to go all the way to the 5 mins chart to see the A-B-C, such is the nature of a strong wave 3 that it is hard to spot classic EW wave motions on the hourly charts.

 

Here is the S&P and Dow (expect something similar if a bit more damped down on the FTSE/DAX owing to these markets being closed).  On the S&P the 50% looks favourite right now.

 

Anyone got a different take?

 



 

 

[Mercury]

Scratch that last!  62% now looks better

[Guest MrJake]

Hi Mercury

 

I find your take on the charts etc. very thoughtful. I think I will be volunteering you to run a course on them for us mere mortals.

 

My thoughts tend to be a bit more basic. I have just been able to take a small profit between 17703.9 and 17782.6, okay missing the tops and bottom but it worked for me.

 

I am now looking for a further drop, my next target being 17650 

 

 

[Guest MrJake]

I  forgot to mention my previous target was 17850 (for up of course) but felt that this was a little too much bounce back

 

[Mercury]

I doubt I am nearly competent enough nor experienced enough to be a credible instructor on this stuff, I get more wrong that right, although I suspect it will always be so.

 

If you are short term trading or day trading be careful with my analysis as it is geared towards longer term trading and I aim to identify market turns within a fairly wide margin of error (e.g. 50 points on the Dow).  However once in a major move, and I believe we are in a major move down now I will seek to take smaller timescale entries but will still hold them for the whole ride (hence my mention of the 5 mins chart to find the A-B-C on this retrace).

[Guest MrJake]

Don't get me wrong, these occassional opportunities are viewed as just that.

 

I have been working on a longer term strategy, this being over months not so much days.

 

I may miss out on a majority of the highs and lows but in the longer term I am seeming to be in front (wish  never said that!)

 

The decisions I make are my own and therefore I am the one to blame if it goes pair shaped