Triggers to nastiness

August 29, 2009

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New charts from Allan, who seems to be predicting an end to the rally’s coming soon. Here’s why. – Ilene

Triggers to nastiness

Things are getting pretty interesting again, due to a host of factors that seem to be converging and alerting us to some imminent changes. Both Glenn Neely and Robert Prechter are suggesting the move up from March has just about reached it’s most likely conclusion, reaching or close to reaching ideal targets in terms of price (Prechter & Neely) and time (Neely). In addition, Arch Crawford wrote in his August newsletter that, "September is a truly ugly month right from the start – Overwhelming negative aspect count."

Let’s walk through my most salient charts and analysis to see if we can identify any triggers to nastiness, so as to be ready when Ms. Market yells, "Pull."

SPX- Monthly

On the Monthly chart, with one day left in August, 1029.80 still prevents the ATR system from flipping positive. Blue Wave is four months into it’s Buy Signal and won’t flip Short until the 830’s.

SPX – Weekly

On the Weekly analysis, we still see a triple divergence on the False Bar Stochastic as well as a stubborn wave count and pattern from Advanced GET warning of new lows to come. I’ve drawn a trend line that is walking up with price and is sitting right now at about 963, almost exactly where both Blue Wave and ATR will flip Short. Take note.

SPX – Daily

A close up Daily chart further clarifies and provides new REVERSAL levels, basis Daily closing prices:

Blue Wave Daily flips SHORT @ 1010.87

ATR Daily flips SHORT @ 1000.71

INTRA-DAY CHARTS

SPX – 90 minute

The 90 minute chart shows an Elliott Oscillator on the bottom, highlighting a significant divergence between the oscillator and the recent new high in the SPX. Note also that while Blue Wave is still on a Buy on this chart, that ATR (solid navy line) is Short. Blue Wave triggers SHORT at 1023.04 and ATR triggers LONG at 1031.93, all basis 90-minute bars.

SPX – 30 minute

The 30 minute chart above shifts near-term focus to some tighter levels. Here, ATR is already on a SELL, requiring a 30 minute close above 1031.67 to flip Long. Blue Wave is again LONG here, requiring a 30 minute close below 1025.56 to join the ATR being SHORT.

In summary, the SPX closed Friday at 1028.93. Our trend-following systems are mixed, reflecting indecision, distribution or accumulation, take your pick. A thirty-minute bar that closes above 1031.67 or below 1025.56 will be the first indication that both systems are in agreement on near term price direction.

More significantly, if Prechter, Neely and Crawford are correct on intermediate direction turning hard down, then these charts provide a series of price thresholds that will confirm that trend, our triggers to nastiness:

30 minute @ 1025.56
90 minute @ 1023.04
Daily @ 1010.87 (BW)
Daily @ 1000.71 (ATR)
Weekly @ 963.00
Monthly @ 830.00