2/25/14

Markets were largely flat on Tuesday, with some very annoying price action. We ended up in the 1850's again on the S&P, but only to about 1853.

Lately, the strategy I've been employing has been my own attempt at eyeballing pivot points, more or less. I've now decided to use the 5-point system and see how it works out. The charts below have the levels on them, and I will probably be keeping the pivot point analysis to Weekly, Monthly, and perhaps Daily time frames due to the speed at which I trade.

The levels I have come up with so far, aren't too far from what I've guessed at, but I'm glad to have a more grounded approach.

Interestingly, the weekly chart with the monthly levels on it suggests we are heading for monthly R2, in the 1880's. Although, the daily chart makes the short term look a little less optimistic, so maybe 1858 was all we get this month.

S&P 500 Daily Chart

Weekly Pivot Points

R2 - 1859.03

R1 - 1847.64

PIVOT - 1836.11

S1 - 1824.72

S2 - 1813.19

S&P 500 Weekly Chart

Monthly Pivot Points 

R2 - 1881.68

R1 - 1832.13

PIVOT - 1801.29

S1 - 1751.74

S2 - 1720.90

2/24/2014

Monday finally saw the S&P 500 break the elusive 1850 level. The catch, however, is that Monday's close was below this level - however, that still makes for an 11 point gain.

It's definitely easy, and somewhat rational to consider the potential that this is still a topping pattern. However, considering how strong 1850 has been, and how long trading took place above it, I think it was a bullish symbol. The S&P daily chart looks like a completed bull flag.

I'm bringing my next key resistance down from 1870 to 1865, as the weekly bollinger band is now at this level. Looking at the hourly, daily and weekly cycles, none can really be called overbought, and the super-small time frames are pretty much oversold.

The whole week really comes into play here. That chart will look very bullish if this week closes above 1850. I'm expecting we open above that on Tuesday.

S&P 500 Daily Chart

S&P 500 Hourly Chart

2/21/2014

On Friday, the market started a bit strong, but eventually ended the day red. The daily chart on the S&P 500 is showing a bull flag that looks to still be forming. I wouldn't be surprised if Monday goes slightly red as well.

The S&P 500 could still be making a double top. Other indices look to be forming different patterns. The Nasdaq has already broken its high from January, but the Dow Jones Industrial, the Dow Transportation Average, and the Russell 2000 are all much farther from new highs than the S&P. It would be a weird neckline, but the Dow Industrial is starting to look a little head and shoulder-ey.

If Monday ends up being green, then I've got continued reason to expect more upside, but right now a reversal needs to be constantly considered.

The current trading range on the S&P appears to be between the recent low of 1824 to the 1848-1850 area. Either of these being solidly broken should lead to more movement
in that direction.

S&P 500 Daily Chart

2/20/2014

Thursday saw a significant portion of Wednesday's losses taken back with some force. After clearing the 1835 threshold (which seemed to take a bit of effort), we were back up at 1840. Aside from minor breaks above it today, 1840 still needs to be cleared.

S&P futures continued to rally after the close, and if the sentiment keeps up then we might see a pretty high open on Friday. If 1850 gets cleared, I am still using the weekly Bollinger Bands as a target of 1870. None of the three charts below are in overbought territory - in fact, they appear to be in the process of completing a cycle up towards that area.

Also, the channel from November 2012 is obviously still in play.

I'm still keeping in mind the possibility of a double top, so 1850 will really be key. If, for some reason, we break lower, we should see support around 1820/1825 and then 1815.

S&P 500 Daily Chart

S&P 500 Hourly Chart

S&P 500 Weekly Chart

12/19/2014

Wednesday saw a small net decline in US indices which, frankly, seems appropriate. The previous high on the hourly S&P chart was at around 1826.50, and the close was only about two points above it. If this gets broken, we can at least expect 1815 as another support. In the other direction, before this move down, the hourly floored a few times around 1835, so I think this can be treated as a resistance to break in order to entertain bullish thoughts again. Of course, we have been seeing resistance at 1840, and Wednesday saw an attempt at 1850 but stopped 2.5 points below it.

The weekly upper Bollinger band is getting yanked down a bit now - thoughts of a double top are entering my mind.

Interesting developments - looking forward to Thursday.

S&P 500 Hourly Chart

S&P 500 Weekly Chart

2/14/2014

Trading on Friday saw some decent gains in the US indices, and they all look ready to at least test their previous, all-time highs. In fact, the NASDAQ has already taken out its old high, and the S&P 500 is likely to test 1850 tomorrow. Friday saw some time a couple points above 1840, so I think more upside is to be expected on Tuesday. This wave is strong, we'll see if it breaks the ceiling. If 1850 is broken, there's the upper weekly Bollinger at 1870/1875 that can be used as a target. If 1850 resists, there will probably be a little wave down to at least 1830, but I think 1815 is the support to break for anything major to occur.

S&P 500 Daily Chart

2/13/2014

Thursday saw around a 10 point net gain on the S&P 500, closing at 1829. It's above the high of the week, but resistance still remains at 1830. If that breaks, I think we're going to try to get above 1850
.
So far, 1809-1810 has been supporting the current price action, so we'll see if any moves are made to 1800. The daily chart has pretty well-validated rising channel that starts in June of 2013.

Friday's have been somewhat dynamic lately so we will see if that trend continues. I wouldn't be surprised, though, if Friday just stayed in the current range.

S&P 500 Daily Chart

2/12/2014

Wednesday saw the beginning of what will be a much needed corrective wave for the recent rally. The resistance point is actually sitting a few points below 1830, but I am still treating that area as the next key level. This correction is likely to test 1800. The rally has been very sever and a steep 25-30 point correction only seems natural, in my opinion. That being said, assuming it amounts to a flag on the daily chart, the upside breakout that may occur could be similar in its power.

I imagine it'll take at least the rest of the week to see how low this goes.

We are sort of approaching a moment of truth as 1850 is still looking very much like a top, and there is a tentative falling channel on the daily chart. Below the 1800 mark, at around 1775 is the 100 day MA, which would serve as an immediate downside target if 1800 is broken. Personally, I'm expecting a bounce off 1800 and a new high to be put in, but I won't discount the downside.

S&P 500 Daily Chart

2/11/2014

Another day of large gains on Tuesday as the market gained around 1%. 1815 was swiftly taken out by lunch time and we saw a top at 1823. It seems like a weird place to get stuck, and unfortunately for currently-bullish traders, there looks to only be real support 23 points away at 1800

We didn't see a lower open today - in fact, we opened a couple points above 1800 if I recall correctly. The hourly cycle appeared as though it was rolling over at the close. The daily chart doesn't look as overbought, but I think we can expect the next continuation pattern to form relatively soon.

The market really had some power today, so upside is likely to continue. If Wednesday continues to keep the candles green, then there should be a push to 1830-ish seeing as we already broke the low from mid January.

S&P 500 Hourly Chart

S&P 500 Daily Chart

2/10/2014

Price action on Monday was pretty muted maintaining a range between 1790 and 1798, however a push right up to S&P 1800 did occur towards the end of the day. Based on the daily and weekly charts, I do believe we will see continued upside...maybe test the current top. Tomorrow, however, may open a bit low. The smaller time frames look really overbought.

If that happens, it probably won't last very long and we will start making our way to 1815 on the S&P 500. Technically, the previous high of 1798.77 was broken and closed above, which could be the telling sign of more upward momentum. On the weekly charts below, I tried to draw channels that were on a closing basis as much as possible. On the S&P 500 and Dow this seems to solidify the trend - on the Nasdaq and R2k, it's a little more iffy.

Since the close on Monday, futures for the S&P 500 have continued to climb, +4.7 points as of this writing. We have, however, seen how this can change overnight.

S&P 500 Daily Chart

S&P 500 Weekly Chart

Dow Jones Industrial Average Weekly Chart

2/7/2014

Friday saw a pretty powerful move upward that got hung up right at 1795-1800. The jobs data coming in lower than expected apparently did not matter to the market.

Assuming we get above 1800 Monday, 1815 will once again become an important level to watch. The daily charts look like they could see more upside, and the market has not closed the below the channel on the weekly. The bullish momentum needs to keep the market above 1770, but I will not be surprised by a move towards that level.

S&P 500 Daily Chart

S&P 500 Weekly Chart

Dow Jones Industrial Average Weekly Chart

2/6/2014

The S&P at this point has recovered more than half of the most recent down wave. We broke 1770 today, and while there was difficulty staying above the level, a close at 1773 seems pretty solid.

Friday will see the release of the 'Employment Situation' report at 8:30 am. In the event of an open lower, the key level is obviously 1738-1735. For the upside, 1800 will likely be tested if the report spawns a rally. How the price action acts there will be pretty telling.

The weekly charts still look bearish, but we could really use a solid hold under the 1755-1750 area to negate the big trend from November 2012.

I am totally neutral until the open on Friday. This corrective up wave went a little higher than I had thought it would.

S&P 500 Daily Chart

S&P 500 Hourly Chart

S&P 500 Weekly Chart

2/5/2014

After a very small upward move to 1755 on Tuesday, the S&P 500 has been trading between near 1760 on the upside, and 1740 on the low as of Wednesday's close. All this is doing is simply building a bear flag that is likely to break this week. Given the speed and degree of the last two waves down, the next move down should settle nicely at the 200 Day MA, which is now at 1710.

There is a possibility of testing the 1765 tomorrow, but such a move should be factored in based on the daily channel.

If the post 1850 declines started a new Elliot count, then this next decline could be wave 5 on the daily, and potentially complete wave 1 on the weekly. The weekly wave 2 will probably test old supports around 1770-1800 (more like 1770 if we are going to break the channel from November 2012 - thus causing it to act as resistance) and retrace if it is simply a wave 2. Will be interesting to see what pans out.

The low for this sideways pattern is 1738 (almost exactly 30 points lower than the last flag), but a break below 1735 will seal the deal. Anything up above 1770 and I'd reconsider the bearish scenarios below.

S&P 500 Daily Chart

S&P 500 Weekly Chart

2/3/2014

Monday saw a significant decline of over 2%. After busting through the 1765 level on the S&P, the entire day saw declines, hour after hour. November lows were taken out swiftly thereafter. This is a clear breakout of the consolidation that was occurring, and measuring this breakout offers 1700 as a potential support, right around where the 200 day moving average is.

Hopefully (for those on the downside) Monday has set the tone for the week, and we will see 1700 before it's over.

Quite curious to see how far it goes in the coming months
.

S&P 500 Daily Chart