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All About Trends Subscriber Weekend Newsletter

All About Trends Subscriber Weekend Newsletter

Courtesy of David at All About Trends 

Friday we said:

So what if the market goes to 1131? 

First off we have to get through the 200-day moving average at 1113 which is just a futures related pop at the open on Monday away. By the way these futures related pops at the open are what causes negative RS divergence because there really isn’t any strength per say just an adjustment in price from the prior close via the pop.

Notice the Full Stoh’s are right back to being up where they were every other time we were in the zone for a turn around?

Secondly look at where the 200 day moving average is (1113). Then the 50% fibonacci retracement level off the April highs to July lows is at 1114 too as shown in the chart below.  This makes for some headwinds to overcome IF we are plowing higher. 

And lastly the red line is the SPIKE HIGH of 1131. We emphasize the spike high of 1131 because it wasn’t there long and the market started giving it back. 

So now we’ve got some decent resistance levels just overhead.

Zooming in to a different time frame and frequency we see a closer view of this recent push off the July lows.

Here too Full Stohcastics are right back up into the overbought territory which makes us pause.  We’re not going to get cute on the longside here. Sure, we may have to deal with a little inflight turbulence but that ought to be nothing new as we’ve been here before and will be here again during our trading careers.

You can also see that we broke the red downtrend channel to the upside but we’ve already talked about that being a possibility last week.  Another interesting point is the ABC up swing we’ve just seen (on negative RS divergence we might add). This also makes it time for our favorite question: 

Is it going to be a 3 waves up affair and that’s it? If so, ABC123 is currently showing and we are there in the zone.

OR 

Is it going to be 5 waves up to the 1131 or even 1113? 

Going into next week, we’ll have to see if we stall here and this eeking above 1100 ends up being a headfake, or we are on our way to the 200 DMA (1113) or the 1131 spike high.  We wouldn’t bet against opening strength early next week as the market has a habit of going further that most of us think it will (this goes both ways by the way). 

Some volatility via our positions may be coming our way and it sets up some more great looking patterns to be able to sell short.

Above all, on the longside DO NOT CHASE THINGS especially AFTER we came from 1010 (92 points) on the S&P 500 this month. 

As far as a summer rally, what do you think this move off 1010 has been? So don’t look for the summer rally to show up as we are already in it and may be nearing its end (technically speaking).

Moving on to the super short term charts below 

Zooming in on the C wave off the 60 minute chart in this newsletter we see what could be the makings of 5 waves up already and our reason for saying above that we could stall and this eek above 1100 turns into a headfake.

In Summary:

Lets get through the first few days of next week and we will maintain our short bias with volatility reigning supreme and that means expect more big moves in both directions.

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To learn more about All About Trends, sign up for the free newsletter.  David’s offering our readers a Two-Month Special for $10 a month. – Ilene  


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