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Wednesday, February 15, 2012

Wednesday, 2/15/12 update

The ES/SPX has been whipsaw hell in the last few days, but it sure looks like a top is forming (or in place). The Vindicator Buy/Sell measures buying and selling pressure using advance/decline and volume statistics, and it's telling a very interesting story. Up until last Thursday the bulls were clearly in control as evidenced by buying pressure (green line in chart) staying solidly above selling pressure (red). However, starting last Thursday the buying and selling pressure began to oscillate, which is typical for this indicator at market turns. In this case it is evidence that the bulls have lost control and the market is ripe for a decline. As with any technical analysis tool the Vindicator is not foolproof, so it is possible for the bulls to regain there grip. If there is a sell-off, the big question is what severity it will have.

Another sell signal today, third one since last Thursday. The prior two were negated by little mini rallies, so it's been frustrating. However, the intraday (5 minute bars) ES chart of today's decline is showing a very clear 5 wave impulse down, so it looks encouraging. I'm planning a short ES move, but the ES/SPX is quite oversold at this point so I'm hoping to catch it on a bounce over the next day.


  1. Great analysis once again Apple Al,

    With a move to a higher high today (02/16), does this mean that we are still in
    wave 3? Could wave 4 be that shallow? It usually retraces 0.236 to 0.38
    of wave 3. Wave 3 moved 154-157 points (157 if today is still part of
    wave 3).

    Wave 4 should move 36-58 pts or (1321 to 1299) before starting wave 5.

    Where does today's move leave us 


  2. Thanks for the compliment.
    Getting the snot kicked out of me this week however, but this situation looked tough which is why I've only been going in with 1/2 positions.  My experience has been that market tops are much more difficult than bottoms - tops generally are formed, bottoms are usually spikes. 
    As far as the Elliott count, yes I do believe we are still in Wave 3.  I'm hoping to find time to post a revised count later this afternoon.

  3. I do not what is worse, losing money or not making any. Both make me look foolish.

    Risk/reward ratio is too high for me. I like to value average in new money, but I made a complete 180 on 01/26 when SPX touched upper BB at 1333.47 and went to 80% cash from 80% long. Now I have to figure out when to put money back in.

    Have you ever regretted making foolish decisions? (Rhetorical question by the way).

    Anyway, i will wait for wave 4 to complete then move back in. I get very impatient when I see the market run up and I am in cash.