OEX - S&P 500 Trading Resources
 ... Free Stock Market Update & Technical Analysis - Swing & Trend Following Trading



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09/09

Updated indicators: NYSE A/D line - TRIN - Put/Call Ratio
NYSE Summation Daily & Weekly trend - 21 EMA McClellan - Carlucci ?

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The market finally came out of it's sleepy state, after the ECB's refusal to promise additional Bond purchases and a worried member of the FOMC (possible rate hike in Sept.?) spooked the market Friday. Volatility exploded to the upside and investors dumped Bond market positions ( TLT weekly chart ), pushing Yields higher.

So the S&P 500 had no choice and broke out sharply from the Triangle to the downside and on above average Volume, revealing institutional participation in this sell-off. The lower part of this triangle has now instead become a strong resistance area. So any reaction back towards it + ideally an overbought RSI-2 extreme, would be an excellent area for a low risk, high reward Short trade entry.

Because of this sharp sell-off, RSI-2 has reached an oversold extreme, so a price reaction up from the first Fib. support level is not ruled out, if the next daily candlestick is able to close above it. Any clear close below it, could mean the market is targeting either the 50% or the key 61.8% Fib. area, before reversing.

A zoomed in version of Friday's price action can be seen on this hourly chart.

OEX weekly momentum has yet to reach an oversold condition. Strong support comes in at the 932 level, which most likely will be tested next week.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System turned Long on the OEX weekly.
 
 
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09/02
Monthly charts are updated. S&P 500 monthly trendline resistance is still intact after the August trading month.

It tried to overcome it but sellers came in late in the month and pushed prices lower, resulting in a Shooting Star looking candlestick. This is a candlestick pattern which often marks market reversals, especially when found up against resistance.

In addition, BPI Sentiment ran into major resistance Friday. With overbought S&P 500 monthly momentum at the same time close to entering bearish mode and RSI-25 flashing a bearish divergence warning, the odds are increasing for the stock market pullback scenario this Fall. Even more when a Momentum bearish mode is seen, sooner or later.

The Real Estate market, using the Dow Jones REIT index as a proxy, pulled back in August, after an intra-month test of channel resistance. However, it closed for the month at the trendline coming in from 2007. More weakness towards channel support could be the outcome, if it fails to hold.

The Oil index shows a still intact bearish channel, after a test in the August trading month. This market has been moving sideways in the last 4 months. So any break below the June pivot low, would once again indicate trouble for this market. A positive breakout (closing basis) from this channel, on the other hand, would be bullish for Oil, long term. So waiting for a directional clue here.

Gold monthly closed down in August, after making a pullback from trendline resistance. This could be the end of wave a or even a full a-b-c corrective phase to the upside could be over. If a wave b is underway to the downside, a typical target would be the 50 - 61.8% Fib. retracement area, calculated from the wave a advance.

Junior Gold Miners ETF GDXJ weekly seems ready for another push higher, after it formed a bullish Pin bar this week, on heavy Volume (buyers coming to the market) and at trendline support. The August high should be the first significant resistance area, so it's a possible target, mid term.

The Bond market, TLT monthly is deteriorating, after it reached major trendline resistance in July. At a minimum, it should go for a test of trendline support in the coming months, which would lead to higher interest rates.

A look at the 30y T-Bond Yield TYX monthly gives support to this view, with an oversold and 'bullish divergent' RSI-25 and also a bullish Falling Wedge formation.

A test of upper wedge resistance is a likely outcome, in the coming months. Any breakout from it would confirm a larger bottom in place and a further advance towards the trendline coming down from the 80's is not ruled out. The August month was an 'Inside Month' trading within the range of the July trading month, reflecting indecision.

The US Dollar pulled back intra-month but managed to close higher. Still, the Buck is stuck between a falling trendline and strong Fib. & horizontal support. The directional breakout from this situation should give a clue where the USD is heading thereafter, long term.

Short term, the S&P 500 is stair stepping lower from the August high, making lower lows and lower highs. It's also forming a Symmetrical Triangle pattern from the early August low, which gives a trading opportunity near term, by trading the directional breakout from it.

Any downside breakout would indicate weakness towards first Fib. support (2,117 area). An upside breakout could mean it wants to go for a test of the August high and even the trendline coming in from April, so that would mean all time high territory.

OEX Weekly Momentum is firmly in bearish mode and has not yet reached an oversold condition. Strong support is down around 932, which if reached is a probable rebound area.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Short on the OEX weekly.
08/26
The market is on the doorstep of entering a historically weak part of the year, with the Sept. trading month coming up next week. This at a time when Volatility - VIX daily seems to prepare for a move higher, as it formed a Pin reversal bar Friday, at a trendline it earlier managed to overcome. Important trendline resistance is up around the 23 level, in case the market takes a dive this Fall.

The University of Michigan consumer sentiment fell to 89.8 from July's 90.4, lower than the expected 91 reading from economists. With a potential Fed rate hike in Sept. which could spook the market, it could lead to an even lower consumer confidence and with it, more pressure on the economy.

On the OEX weekly chart, strong support comes in around 932, produced by a trendline drawn through important peaks from 2015. If reached, weekly momentum should be oversold at that point, so the odds of seeing a reaction up from that area are good.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Short on the OEX weekly.
08/19
I've created a Facebook page for OEX Trading Resources, mainly as a service to my subscribers so you can still get access to market updates, charts, articles etc., in case the website server is down for some reason. Even if you don't like it, by clicking the Like button you will automatically get a notification when new posts are available.



08/05
After several attempts, the market is still struggling to overcome the difficult 3/8th MML barrier, mentioned in previous updates. Because of this, the market is in a vulnerable position to instead fall back for support.

This is also indicated by the weakening daily NYSE Summation Index trend indicator and also weekly momentum now turning clearly bearish, despite prices more or less holding up, as the 3 recent weekly closes have been at nearly the same level.

This has also resulted in a ranging VIX daily with Volatility probably going for another test of support next week. But with that test, Sentiment should also reach stiff trendline resistance by then.

So all in all, personally i'm waiting for the market to come out of this consolidation phase and give more clues as to where it's heading next.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Short on the OEX weekly.

08/05
S&P 500 EPS dropped $2 in July vs. indexes at new highs. Next week it will be 60 years since the Aug. 2, 1956 (anniversary) top. The 60y cycle is what Gann called the Master cycle, the ebb and flow of major market tides. Time will tell if the tide will turn with this anniversary cycle top.

The Neural Nets thinks prices are heading lower, as the system turned bearish on the S&P 100 market after this week. This at the same time as a five wave move from the June low is probably coming to an end soon, as better seen on this S&P 500 hourly chart.

It will be interesting to see if prices are able to enter the earlier discussed 3/8th - 5/8th MML range or instead turn lower from this difficult barrier, which will be met at the 2,187.5 level.

Volatility - VIX daily closed below major horizontal support, after Friday's pop to new highs. In this move, a lot of bearish divergences showed up in indicators like daily momentum, A/D daily and 21 EMA McClellan

Both the daily and weekly NYSE Summation Index trend indicators even stayed in bearish mode, in the face of this move to new highs, which is a strong technical warning about a topping market, short term.

OEX weekly closed up against minor trendline resistance this week, with momentum preparing a reversal, at an overbought extreme.

The Bond market, using the TLT weekly ETF as a proxy, is once again turning south, after a brief 50% upside retracement. Any break below the recent pivot low, could open up for even more weakness in this market and with it, pushing the interest rate higher.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System turned Short on the OEX weekly.
07/29
Long term, updated monthly charts shows key stock market indexes making a July close above important resistance and into all time high territory.

I.e. the S&P 500 broke out from a Triangle pattern but failed to close above a trendline coming in from the 2000 top. At the same time, monthly RSI-25 is forming a clear bearish divergence vs. prices. As the chart shows, major tops in the past occurred with a similar technical set-up as observed now.

With this in mind, the Bull trend underway from the February low is best interpreted as a last wave 5, as part of a five wave impulse (one degree higher) wave c from the 2011 low. When it has reached it's ending point, it could also finally end a Cycle degree pattern from the 2009 low.

For the long term Bear camp, it's crucial that Volatility - VIX monthly finds a floor on the major support area it's most likely to test again in August. A convincing monthly close below it, could be good news for the Bull camp.

If S&P 500 trendline resistance is overcome in August and also able to enter (above 2,187.5, closing basis) the earlier discussed 3/8th - 5/8th MML range , it could mean this market is going for another test of the major monthly L3 DGL (Dynamic Gann Level) which was tested several times in 2014 & 2015.

So the question is, beside the price action and wave development, is a major topping phase supported by other technical factors? Well, A/D monthly div. continues to flash a warning. On the other hand, the New High - New Low indicator actually backed up this move to new all time highs, so some mixed readings here.

Long term momentum reached an overbought extreme in July but without any severe bearish div. as i.e. seen around the 2007 major market top.

The Dow Transport Index continues to trace out a huge bearish divergence vs. the Dow 30. In addition, it struggles to overcome major trendline resistance on the daily chart.

Long term Sentiment is facing strong trendline resistance this Fall.

So odds favor a several months long stock market pull-back starting sometime this Fall (seasonal weakness).

The Bond market - TLT monthly formed a Doji (indecision) looking candlestick up against tremendous long term resistance in July, with RSI-25 at the same time reaching mildly overbought readings. This market could turn south long term, with higher interest rates as the outcome.

This is also indicated by TYX monthly - 30y T-Bond Yield touching lower Wedge support in July, with a 'bullish' div. observed in RSI-25.

Real Estate - REIT monthly broke above trendline resistance in July. The next higher resistance area is up around 1,906. Despite it's 600 points higher compared to the 2007 top, RSI-25 has failed to overcome it's 2007 peak.

After going through an a-b-c (weekly chart) upside corrective phase since Feb. 2016, Light Crude monthly is heading lower in what could be a wave 5. This is a revised wave count, indicating even more trouble ahead for the oil market.

The Feb. 2016 low was probably the end of wave 3 only, not a wave 5 as earlier labeled. The reasoning is the three wave looking pattern from the Feb. 2016 low. The first leg of a major new Bull trend should start in a five wave impulse, not in three waves.

The close near the low in July, could mean more weakness coming in August, at least intra-month. As the weekly chart shows, key Fib. support is down around the 36 level, where a rebound could start.

The Oil index - XOI monthly is still trading within a bearish channel from 2014, so the outlook for Oil continues to be bearish at this point.

Both Spot Gold - Gold monthly and the XAU - Gold & Silver Index could face some weakness soon. Gold has reached important trendline resistance and is probably finishing the first wave a of an a-b-c zig-zag pattern to the upside. So i'm looking for weakness in wave b.

The XAU has nearly reached first Fib. resistance, any reversal candlestick forming up against this resistance in August, could mean a pull-back is coming thereafter. Any monthly close above it, would indicate a further advance towards the 50% retracement level.

After a brief dip in June, Junior Gold Miners index is again underway towards it's next higher target, around the 54 level. Any clear close above it, could open up for even higher prices thereafter.

The Buck - USD monthly formed a Shooting Star candlestick up against trendline resistance, so a pull-back is likely in August. Support comes in at the 92 level.

As for a few popular stocks, Apple monthly is trading within a Triangle pattern. The directional breakout from it could set the tone for this stock, in the months thereafter.

After it found wedge support in June, Google monthly is pushing higher and is probably going for a test of stiff upper wedge resistance. The bullish trend for this stock is intact as long as it trades within this wedge.

Mid term, the OEX weekly is getting quite overbought and seems to prepare for a pull-back. Support is down at the old broken trendline, in the 935 area.

Short term, as the S&P 500 hourly chart shows, the long standing consolidation phase has established a sideways channel, which often gives excellent trading opportunities, with entries done in the direction of the breakout from it. Any downside breakout from it, would signal weakness towards the first support area, around 2,141.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Long on the OEX weekly.

07/22
Below are a few observations after this trading week:

The market is in a (upside biased) consolidation phase, as better seen on this S&P 500 hourly chart. Any break below channel support, would increase the chances of a near term top in place. RSI is making lower highs vs. higher highs in hourly prices, which is often a warning sign.

Volatility - VIX daily failed to break through the major support area, as mentioned in the previous update. Re-test coming Monday.

The Dow Transport Index pulled back from major trendline resistance. It's likely making another attempt to overcome it early next week.

Overbought Weekly Momentum has reached levels where many mid term tops have formed in the past. Once a bearish mode is seen, minimum downside potential would be the old broken trendline (OEX 935, S&P 500 2,139 area) which now acts as support instead.

If it fails to hold, first Fib. support comes in around 2,105, if Wednesday's high holds. If broken, this Fib. support level will be adjusted.

On the daily chart i've labeled 3 possible wave scenarios, with a five wave Impulse from the Feb. low still being the preferred one.

But because of the three wave looking pattern from the June low, an alternate view is that this could also very well be the last wave e of a complex a-b-c-d-e expanding triangle pattern we're dealing with, which in turn could soon terminate a larger degree wave c from the 2011 low.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Long on the OEX weekly.
07/15
With the market at all-time highs, the charts below reveals what is really going on under the surface, as investors are withdrawing money from equity funds at record pace, reflecting a flight to safety.

It's mainly global central banks asset purchases (to their highest levels since 2013) which have driven the stock market to all-time highs. This is also indicated by the below average Volume readings observed throughout this advance to unchartered territory.


So the question is, how high can this market go before a peak is seen? Well, i can't predict for sure the effect of intervention on this market but i.e. BPI Sentiment is once again reaching major resistance soon.

Volatility - VIX daily can also give us a clue here, as long standing major support down around 11.7 must be clearly broken on a closing basis, before the horizon is clear for significantly higher stock market prices.

If this occurs, then the market may want to enter the 3/8th - 5/8th Murrey Math trading range (2,187.5 - 2,312.5). This range is normally difficult to enter, but once entered the market trades within it roughly 40% of the time, according to the MM theory. I'll come back and draw the 3/8th MML on this chart, when/if the market goes for a test of this 2,187.5 level, sooner or later.

The Dow 30 is also at all-time highs but not so for the Dow Transport Index which has reached major trendline(s) resistance. Until this stiff resistance is overcome, i think the upside potential for the stock market is limited.

The Transport index often gives a true reflection of economic activity and it has gradually deteriorated since the Fall 2015, in the face of higher stock market peaks since then.

Near term, with RSI-2 now heading lower from an overbought extreme, a minimum pull-back could be towards the broken trendline which now acts as support instead (2,137 area). If this support gives in, the next lower support is the first Fib. level at 2,103, better seen on this S&P 500 hourly chart.

The Bond market ETF - TLT weekly made a pullback this week after reaching major trendline resistance. Based on the EW structure, this market could be peaking long term and with it, higher interest rates could be the outcome.

This is also indicated by 30y US T-Bond Yield - TYX monthly likely forming a large Ending Diagonal (Falling Wedge) pattern, which will be confirmed completed, sooner or later, with any upside breakout from this wedge.

That breakout (monthly closing basis) would be a hard technical signal that much higher interest rates are coming, with the major trendline coming in from the 80's as a first possible target.

If a Pin reversal bar is formed at lower wedge support after the July trading month, that would signal an advance towards upper wedge resistance, in the coming months.

A potential much higher interest rate doesn't bode well for the stock market long term, as it would attract investors to alternative positions like cash, especially if the nearly longest bull market in history finally rolls over soon.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Long on the OEX weekly.

07/08
A better than expected jobs report (278,000 Estimate: 173,000) was the catalyst for the Bulls to lift the market beyond the June high and once again testing the + 2/8th MML (Murrey Math Line) as it did several times in the Spring & Summer 2015, before heading lower.

A zoomed in version of Friday's price action can be seen on the S&P 500 hourly chart

But the big boys didn't participate in Friday's party, as revealed by the below average daily Volume reading (or summer holidays effect?). And with the market again in Triple top territory from 2015, a close look at i.e. Breadth & Momentum tells that market trouble could be in the cards soon, of minimum short term degree. Below is my reasoning:

The Bond market, here represented by the TLT weekly ETF, is facing major trendline resistance next week. With a pullback likely and in turn higher Yields as a result, this could contribute to a lower stock market.

Prices climbed above the June high, the daily 10 MA A/D line did not, so a bearish divergence is again forming, like it did in April, warning about the price weakness we saw thereafter.

Volatility - VIX daily is reaching a strong floor Monday. If it holds, the higher fear outlook would put pressure on the stock market.

Put/Call Ratio readings are now at levels where many short term tops happened in the past.

A double bearish div. is seen in the daily NYSE Summation Index trend indicator vs. higher peaks in prices. The weekly div. indicates mid term price weakness as well.

Similar development is seen in the 21 EMA McClellan

From an Elliott Wave point of view, as long as the market is trading below the all-time high, there is still a tiny chance that the advance from the early 2016 lows is a wave 2.

Any break of the all-time high would finally exclude this wave possibility and instead clear the way for several other likely wave counts:

One wave possibility i'm looking at is a five wave impulse structure from the February low in it's last stages, which is supported by the bearish RSI divergence now showing up in the wave 5 part (from June low) of this price structure and also by the general underlying weakness in Breadth etc.

This wave 5 could then complete a one degree higher wave 5 from the February low and possibly with it, a Primary degree wave C from the 2011 low.

This bigger picture chart shows the labeling of this alternate wave count. As seen on the same chart, the bearish outcome for this count is supported by the strong monthly RSI-13 bearish divergence.

Another, quite bullish scenario suggests a brief wave 2 correction ended at the June low, with the first leg of a wave 3 now underway to the upside.

Despite the strong jobs report, i'm more in doubt about this one, as i assume it would need a more healthy underlying condition to propel the market so far into new all-time high territory. Anyway, it's a valid wave count which can't be ignored at this point.

For an example of an underlying weak condition, FCX - Copper & Gold vs. S&P 500 is flashing a warning sign for the stock market. Only time will tell for sure though, i could be wrong, some outside forces could once again be the fuel for a potential wave 3.

Junior Gold Miners GDXJ weekly is soaring and blasted through it's 45 target, closing at 49.41 this week. The next higher resistance level is roughly at 54.

Light Crude Oil is taking a dive again, breaking below trendline support, which could mean the a-b-c corrective move from the early 2016 low has ended. Key Fib. support is down around the 36 level.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Long on the OEX weekly.

07/01
Because of the strong and deeply retracing advance from the June low, the weakness from the June 08 high was apparently an a-b-c correction and not an impulse pattern underway. This was confirmed when an overlap of the June 16 low occurred and with it, negating the wave 3 possibility. If the market is able to break above the April & June highs, this could in fact mean this a-b-c correction was a wave 2 as part of an ongoing five wave impulse pattern from the February low, which could lift the market to new all-time highs, sooner or later.

But until the April & June highs are broken, the market remains in a vulnerable position. Friday's Hammer candlestick up against trendline resistance, along with an overbought RSI-2 indicates a pullback coming, near term. Likely support levels are drawn on the S&P 500 hourly chart.

Strong Volatility - VIX daily support comes in at the 12.5 level and an even stronger floor is down around 11.7.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Long on the OEX weekly.

06/24
As seen on the S&P 500 hourly chart the corrective move from the 06/16 low extended into a deeper retracement double zig-zag pattern (wave 2 or b) before a sharp wave c or 3 on heavy Volume took the market much lower but has yet to reach first Fib. support, which should be a minimum downside target for this sell-off.

If the sell-off continues next week and below May's wave 4 low, the odds of a wave 3 underway would increase, as wave c's are typically equal to wave a's in price length and this is already fulfilled. So the market must turn positive right away next week, to make a wave c scenario likely.

However, the only problem with the wave 3 scenario is that the S&P 500 E-mini future reached new highs (Expanded Flat b wave?) before the sell-off started, which was not the case for the cash market and a wave 3 must start from a lower high to remain a valid count.

So although a wave 3 is technically a valid count for the S&P 500 cash at this point, i'll take it with a grain of salt, with further price action needed before concluding.

Volatility - VIX daily readings exploded 8.3 points higher, reflecting huge investor fear connected with the Brexit. The VIX could go for a test of the early 2016 high before making a pull-back.

With this in mind, major 8/8th MML (Murrey Math Line) support comes in at the 2000 level for the S&P 500, which also roughly represents the first Fib. support area.

Any daily close below this zone could open up for more weakness, especially because that would also mean a close below the important daily 200 EMA, which i.e. many fund managers are watching closely. And if more of the big boys start selling, it could mean even more selling pressure coming.

Despite the strong sell-off, weekly momentum has yet to reach it's oversold area, although it could be forming a bullish divergence vs. the recent weekly pivot low.

GDXJ - Junior Gold Miners has nearly reached it's 45 target, where a pullback is looked for. This view is supported by the now overbought and bearish divergent RSI-25. Any clear weekly close above this 45 resistance could open up for even higher prices though.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System turned Long on the OEX weekly.
06/17
A completed five wave structure from the June high can be counted on the S&P 500 hourly chart terminating a one degree higher wave 1 or a. Currently an a-b-c corrective wave 2 or b pattern is now likely underway to the upside, with typical targets drawn on the chart.

Volatility - VIX daily managed to overcome the important resistance area mentioned in the previous update and is now instead resting at this level.

OEX weekly momentum turned bearish this week and prices closed below trendline support. First Fib. support comes in at the 890 level.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System turned Short on the OEX weekly.

06/10
The market is currently in a triple top formation from May 2015.

As seen on the S&P 500 hourly chart prices broke out from a bearish Rising Wedge pattern Friday and finished the first ripple wave i or a, as part of either an a-b-c zig-zag or five wave Impulse structure underway to the downside.

So once a wave ii (typically retraces to 50% or 61.8%) now most likely underway to the upside has reached it's termination point, the market should once again head south, possibly sharply, as a wave iii or c are the sharpest in the Elliott Wave Theory.

Volatility - VIX daily is facing stiff resistance early next week, a pull-back here should be positive for the stock market.

The NYSE Summation Index trend indicator came close to entering bearish mode Friday. This indicator has also formed a bearish divergence vs. the new high in prices, flashing a warning sign about what's coming. A bearish divergence is also observed in the S&P 500 vs. FCX.

Mid term, on the weekly chart a Shooting Star reversal candlestick formed up against trendline resistance, with momentum at the same time entered it's overbought territory.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Long on the OEX weekly.

06/03
Long term, the S&P 500 monthly ended the May trading month up against trendline resistance and below the April high. The more failures to overcome it on a monthly closing basis, the stronger this long term trendline will be.

The same goes for some other key indexes, like the OEX monthly and Dow 30 monthly, triangle patterns remains intact also here. So these markets are vulnerable to fall back for support, especially after this week's bad jobs report.

But that doesn't mean they can't make a June intra-month push higher first, as Volatility - VIX monthly looks as it wants to go for a test of major support (10 area), signaled by any break of the April 12.5 low. Any lower volatility should be bullish for the stock market.

The Nasdaq Comp managed to close above it's major 2000 high. Important trendline resistance is up around 5130 for June.

Other monthly charts like Oil, Real Estate, Gold, Yields, USD etc. are also updated, the long term development can be seen here.

The Oil index is pulling back from long term channel resistance. Light Crude is getting closer to first Fib. resistance, RSI-25 is far from becoming overbought. It could reach Fib. (60) or even the old broken trendline (70 area) before possibly heading lower again long term, in a wave b or impulse.

The proxy for the Real Estate market - Reit Index, formed a monthly bearish Shooting Star up against horizontal resistance, so a pullback is likely.

Gold made a pullback in May, on heavy Volume, but closed right above the two previous months lows, so apparently it found support there.

Mid & Short term, the Neural Nets turned bullish on the market after this week. Weekly momentum is still pushing higher but is not yet overbought.

As for the near term price action, by zooming into the S&P 500 hourly chart one can observe a impulse structure from the May low likely in it's last stages, with a last wave 5 now probably underway to the upside. Any break below the wave iv low, could open up for even lower prices thereafter.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System turned Long on the OEX weekly.
05/27
Important S&P 500 trendline resistance is up at 2,110. Near term upside potential beyond that zone is limited because of the now RSI-2 overbought extreme, so i'm looking for a pullback from this area, towards trendline support.

Any Shooting Star candlestick forming up against it, would be the most ideal alert about a possible market reversal. In the OEX, if reached, 937 should offer a good Short entry point.

The magnitude of the price move higher this week, forced a revision on the near term wave count and the S&P 500 hourly chart has been re-labeled because of it.

Any break of the April high at 2,111.05 would rule out a wave 2 (Flat) now possibly underway from the early May low and instead move a wave 5 scenario from the May 19 low to the forefront.

If so, the advance from that May 19 low is either a lower degree wave i of 5 or even a full wave 5 is not out of the question. Volume readings in this advance has been weak, so it has most likely been fueled by short covering.

Mid term, the wave 2 scenarios from the Feb. 2016 or April 2015 low is under pressure and bullish weekly momentum still has good space to the upside, before getting overbought.

Any break of the July 2015 high (OEX 947.85) would clear out any doubt, as a wave 2 can't retrace more than 100% of wave 1.

At that point several other possible wave scenarios comes to the surface:

1. A wave D as part of a huge, complex wave 4 consolidation from Aug. 2015 is peaking, with the last wave E to the downside starting thereafter (target 810-815 area).

2. A wave 5 from a higher degree Feb. wave 4 low is underway, thus a last push to an all time high is in the cards, before weakness into Fall 2017 could be the outcome thereafter.

Even a few other wave scenarios are possible but those will get more attention in case the market moves far beyond the 2015 & 2016 highs.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Short on the OEX weekly.

05/20
The S&P 500 could be working on a series of wave two's lower, as seen on this hourly chart. This week's break of the April wave 4 low, is increasing the odds of a more significant top in place. The daily NYSE Summation Index trend indicator is in a firm bearish trend.

But since Volatility - VIX daily is heading lower towards trendline support and oversold daily momentum has entered bullish mode, (from a bullish divergence condition) i'm looking for an upside market breather early next week, before possibly heading lower again.

The S&P 500 should minimum go for a test of trendline resistance (2064 area). Any daily close above it would start to put pressure on the preferred wave count. Friday's buying came on below average Volume, revealing institutions didn't participate.

In the Dow 30, stiff resistance is up around 17750, a likely reversal level in the ongoing bearish trend. Any daily close above, could open up for even higher prices.

OEX weekly momentum is in a mildly oversold condition, with prices nearly reaching the first Fib. support zone this week.

Weekly NYSE Summation Index is deteriorating further.

The Neural Nets again turned bearish on the market, with the OEX weeekly Bollinger Bands at the same time contracting, which is a warning about an explosive move coming soon, either to the downside or upside.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System turned Short on the OEX weekly.
05/06
160,000 new jobs were generated in April, according to the Labor Department. However, The Bureau of Labor Statistics for the LD reported that 223,000 jobs included in the count of new jobs were only an estimate.

LD also came out with an official 5.0% unemployment rate, with 59.7% of the population having a job and Labor force participation falling to 62.8%.

A look at the S&P 500 hourly chart shows a still intact April wave 4 low. Any break below 2033.80 next week would confirm a top in place and could be quite bearish. So awaiting a clue here, where the market is likely heading next.

Any daily close above minor trendline resistance at 2068 next week, would clear the horizon and could instead turn the near term picture bullish. In fact, the OEX daily is moving higher from an oversold momentum condition, which is close to enter bullish mode. A minor trendline resistance is not yet penetrated.

If the market is able to clear that 2068 resistance, it could mean the advance from the Feb. low still has some unfinished business to the upside, possibly in the form of a last wave v (alternate count).

Nasdaq Comp daily is moving higher after testing first Fib. support and after forming a bullish divergence in RSI-2. Volume was below average though, reflecting a lack of participation from the big boys. Also here minor trendline resistance has yet to be overcome.

Volatility - VIX daily is heading lower, which should lead to a positive start of the new trading week, at least intra-day Monday. Minor trendline support comes in around 14.46 and major support is down at 11.5.

Mid term, the bearish trend looks firmly intact at this point, as OEX weekly momentum still has downside room, before getting oversold. First Fib. support is down at 891.

Weekly NYSE Summation Index turned bearish after this week, with the daily version of it already well underway.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Short on the OEX weekly.
04/29
As updated monthly charts shows, Oil, Spot Gold, Gold & Silver stocks, Junior Gold Miner markets are soaring. The Bond market and the Dollar is falling, the outlook is still negative.

The S&Ps and other stock markets are still stuck in a long term, big range consolidation phase, developing from the Spring 2015 highs. The most recent swing is just completed it seems, as indicated by the monthly S&P 500 Shooting Star candlestick formation up against trendline resistance, after the April trading month.

From an Elliott Wave point of view, long term, several scenarios can be labeled as valid wave counts. As better seen on this OEX weekly chart, the deep retracements from the Aug. 2015 and Feb. 2016 lows makes a wave 2 less likely. But technically a wave 2 (either from the Aug. or Feb. low) can't be ruled out before the all time OEX high at 947.85 (S&P 500 2134.72) is taken out.

Another possible and more bullish scenario, long term, is that an a-b-c correction from the Spring 2015 high ended at the Feb. low. The advance from this low could then be a wave 1 of a five wave impulse structure underway to the upside, which should bring the market to new all time highs in wave 3, as in this scenario a wave 2 pull-back could now be underway to the downside. A typical target for a wave 2 is he 50-61.8% Fib. retracement (1960-1923) area.

A third scenario can take the form of a more complex a-b-c-d-e wave 4 correction, where the a-b-c-d part of it is completed, with the last wave e to the downside already started. A natural target in this case would be Triangle support down around 810 for the OEX and 1920 for the S&P 500. If this support fails to hold, then the market could go for a test of the Jan. & Feb. lows around 1810.

Short & mid term, disappointing Q1 GDP and corporate earnings, ignited a sell-off this week, which was warned by the previous week's Shooting Star candlestick, observed on the OEX weekly chart. As the same chart shows, momentum has still plenty of room to the downside before getting oversold, mid term. First Fib. support comes in around 891. The Neural Nets turned short on the OEX weekly.

Short term, daily RSI-2 is oversold. Volatility - VIX daily made a pull-back from quite stiff trendline resistance Friday. The bears must overcome this resistance challenge, to be able to force prices even lower thereafter. If this occurs, the wave 4 low as labeled on the S&P 500 hourly chart could give in to the bearish forces next week. If so, a bearish change in the short & mid term trend would be confirmed.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System turned Short on the OEX weekly.

04/22
A few days ago, the S&P 500 broke out from the earlier mentioned Rising Wedge, as seen on this updated hourly chart. This move down (on increased Volume) from the 04/20 high came as a small five wave impulse, as better seen on this 15M chart.

Friday's reaction up developed in three waves, so this 5-3 initial downside pattern makes odds higher for a new bearish trend underway. Increased evidence of this would be a break of support on the daily chart and then the wave 4 low (2033.8) at some point next week.

This short term bearish stance is backed up by the fact that a Shooting Star candlestick formed up against weekly trendline resistance, with overbought momentum at the same time forming a bearish divergence. This resistance area was one of the targets mentioned in the previous update.

A few reasons for Bears to be cautious though, are the Neural Nets still found in bullish mode and Friday's bullish Pin bar right above support on the daily chart. So who knows, a final pop could be the outcome first. This is also indicated by Volatility - VIX daily probably going for major support, before heading higher.

Another technical point which could go in favor of the Bulls, is the increased strength in market Breadth, although there is not yet enough to cancel the A/D bearish divergence i wrote about in the previous comment.

Also, the Carlucci Indicator climbed well above 65 this week, flashing a tradeable market alert on the Long side. This article courtesy of dshort, should shed more light on this useful indicator, regarding gauging the health of the market.

The Bond market, here represented by the TLT weekly ETF has finished a five wave c structure from the Nov. 2015 low, as part of what looks like a three wave corrective phase from the June 2015 low, which portend higher interest rates ahead, as the outlook for the Bond market is negative.

Weekly jobless claims fell to a 42 year low this week. Microsoft and Google disappointed earnings wise. Friday alone, these stocks fell 7% and 5%. On the positive side, McDonald's all-day breakfast is a hit and this was reflected in it's positive earnings news.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Long on the OEX weekly.

04/15

As the saying goes among traders, the bigger the divergence the bigger the upcoming decline will be (in this case the 10 MA A/D line vs new highs in prices). Volatility - VIX daily failed to overcome trendline resistance, so prices continued to climb along the L2 DGL line this week.

The previous week's pullback apparently was a wave 4 simple zig-zag pattern only, before prices went higher again in wave 5. It's possible that this last wave 5 takes the form of a bearish Rising Wedge (Ending Diagonal) pattern, as better seen on this S&P 500 hourly chart.

The one degree lower wave e of this 5 looks to be the remaining part, so one more push to the upside is likely next week. This also fits with the Neural Nets still in bullish mode. Possible targets are the upper part of this wedge or in the OEX case, the weekly trendline resistance (933) area. If prices takes out the Nov. 2015 high at some point in time, the wave 2 scenario from the Feb. low is then not a valid count anymore, at least for the S&P 100 index.

However, if the July 2015 all time high remains intact, a wave 2 a-b-c Flat pattern from the Aug. 2015 low, is not out of the question. If so, this means a nasty wave 3 impulse to the downside is soon starting, also warned by bearish divergences in A/D line, weekly momentum and Dow Transport.

Regarding the Dow Transport index, an interesting observation this week, is the Dow 30 penetration of trendline resistance, while the Dow Transport index is still struggling to overcome similar resistance. This at the same time as Sentiment - BPI daily has once again reached stiff resistance. To me, all these technical factors smells like a market peaking phase.

The Junior Gold Miners broke above major trendline resistance right away this week, without making any pull-back first. So now the price horizon is more clear for a further advance towards the 2014 & 2015 highs (45 area) which are the first likely targets.

But expect a short term reaction back to the broken trendline at some point, before likely heading higher again. If it comes back to it, it would be an excellent entry area for Long positions, where a tight stop is possible, triggered by any weekly close below what is now strong support instead.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Long on the OEX weekly.

04/08

Long term, a look at the broad market, here using the OEX monthly as a proxy, shows that the increasing number of big price swings since the May 2015 top, could mean a larger Triangle pattern is forming, possibly a larger wave 4 is developing.

This is not a top ranked scenario but still a valid alternate view at this point. If so, another test of the 800 level (in wave e) is not ruled out, before heading higher again in wave 5. In the next move down, if that major support area fails to hold on a monthly closing basis, it would most likely negate this scenario.

Short & mid term, the advance from the Feb. low apparently stretched out a bit further. Here is an updated S&P 500 hourly chart which shows the zoomed in version of the price action since then. On a finer degree bar chart, 9 sub-waves can be counted to the top made last week, which means an extension occurred (in wave 3).

The oscillating, gradual price weakness experienced in the markets these days, is probably what the bearish divergence in the 10 MA of the daily A/D line has been warning about for some time.

The daily NYSE Summation Index trend indicator entered bearish mode Monday. This and the fact that weekly momentum also turned bearish after this week, increases the odds of a short & mid term top in place, although Volatility - VIX daily has a trendline resistance challenge to overcome first, before more weakness is likely in store for the stock market.

The Junior Gold Miners index has reached larger trendline resistance, after a significant move out of a wedge pattern, which started several months ago. A five wave impulse structure could be in it's last stages, so a pull-back from this major trendline (30 area) is not ruled out, before likely heading north again thereafter.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Long on the OEX weekly.


03/24

As a follow up to the previous comment, the S&P 500 made a brief pull-back towards Wedge support before heading even higher, towards the L2 DGL and finally broke out from the Rising Wedge pattern, mid week. Although this advance from the February low has morphed into a deeper retracement, a wave 2 from that low is still a valid count.

The downside breakout from Tuesday's high could be the first ripple wave i impulse, as part of a higher degree wave 3 likely just started to the downside. The market reacted up from the daily 200 MA support area Thursday, forming a Hammer reversal candlestick. This at the same time as RSI-2 is getting oversold in the very near term, indicating higher prices ahead.

Strong trendline resistance is up around 2055, any break of this zone and Tuesday's high (2056) could mean a further delay for the short & mid term top and would also negate the wave i scenario from Tuesday's high, as better viewed on this S&P 500 hourly chart.

If the market stalls below this high and instead breaks below the wave i pivot low sooner or later, there would be increased evidence of a wave 3 underway to the downside.

Technical factors which gives support to my short & mid term bearish stance:

- A bearish divergence is observed in the daily NYSE 18 MA A/D Line

- The daily NYSE Summation Index trend indicator is at a fairly high reading and is soon rolling over into bearish mode.

- Tuesday's high came up against a weak 7/8th MML (Murrey Math Line) reflecting an exhausted market.

- Mid term, weekly momentum is at an overbought extreme and is about to enter bearish mode, with prices up against trendline resistance.

- The Neural Nets turned bearish on the OEX Weekly after 4 weeks in bullish mode.

As for a look at Sentiment and more, here is a comment by Chris Vermeulen

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Short on the OEX weekly.



03/11

The market has climbed well beyond the key 62% target mentioned in the previous update. It managed to close right above the 200 MA and up against the upper part of a bearish Rising Wedge pattern Friday.

The market is getting overbought short term and the fact that a five wave structure from the Feb. low can now be counted, with a bearish momentum divergence at the same time observed in the S&P's and Volatility - VIX daily resting at important trendline support, it could mean a short term top is forming, likely within the first half of the next trading week. A short term top in place would be confirmed by any daily close below the lower wedge line. Downside breakouts from Rising Wedges are often sharp in nature.

Friday's close near the high, makes some more upside potential possible though, at least intra-day before likely heading lower. RSI-2 is about to reach extreme levels, so there is now over a 70% chance that the S&P 500 will close below it's daily 5 EMA within a week. I'm looking for a daily reversal candlestick like a Shooting Star or a Bearish Engulfing, which would be a stronger signal that a price pull-back is coming.

The NYSE Summation trend indicator catched most of this move from the Feb. low, showing the true trend despite the price noise on the way higher.

A look at the OEX weekly chart reveals that the broad market is getting overbought mid term as well, with trendline(s) resistance up around 900 and 925 thereafter.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is still Long on the OEX weekly.

02/19

The wave c of 2 from the mid Feb. low is well underway. A typical target for wave 2's is the 50% retracement area, which in this case is up around 1950. Key 62% Fib. resistance is up at 1980, in case the 50% area is ignored. Volatility - VIX daily falling below trendline support this week, backs up these target possibilities. From a DGL point of view, 1950 would be slightly above the L1 zone

The previous week's Hammer candlestick formation at weekly trendline support, along with oversold momentum alerted about this week's sharp move to the upside, which however came on below average Volume readings, reflecting no institutional buying involved.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Long on the OEX weekly.

02/12

2016 has so far brought a test of the August 2015 low, where a five wave impulse from Dec. 2015 probably ended. This is labeled wave 1, which is likely the first impulse ripples of a new major bear market underway. Since that wave 1 low in January, a 3-3-5 Flat pattern is possibly developing, with the last wave c of this Flat just started to the upside.

A completed Flat pattern should then terminate the one degree higher wave 2, ideally at the 50% or key 61.8% Fib. retracement level or up against the daily 200 EMA. A strong wave 3 impulse should then start to the downside, which could take prices well below the August 2015 low, sooner or later this coming Spring. With this in mind, i'm still holding on to the bear ETF positions i opened last year.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Short on the OEX weekly.

12/18

The below analysis from the previous update is still applicable, not ruling out a wave 3 decline underway from the November high. In the S&P 500, it's important that the trendline & 50% retracement support where prices are now resting at, holds on a daily closing basis, to not open up for more weakness, short term, towards the key Fib support area or even lower. In fact, a break of trendline support is already the case in the Dow 30 daily. Next support here is at the 50% retracement area, around the 17000 level.

The finer wave development can be viewed on this S&P 500 hourly chart.

FCX vs. S&P 500 is soon reaching rock bottom, an all out collapse is happening, which could be a strong warning about what is around the corner for the stock market as well.

-------------------------------------------------------------------
12/11 - ..."With the November high still intact and the market now under selling pressure, the wave 2 scenario covered in the previous update still stands as a valid view, with the market now rolled over into a possible wave 3 sell-off. Friday's close came below first Fib. support, on above average Volume, reflecting big boys selling involved. So near term, at a minimum, the 50% retracement area (2000) should be tested early next week.

This also represents the major 8/8 MML (Murrey Math Line) support, which is the strongest line in this theory. The odds of a wave 3 underway would increase with any break below the key Fib support (61.8%) area, on a daily closing basis.

Mid term, Friday's close near the low for the week and weekly momentum yet to reach an oversold condition, indicate more weakness coming, mid term."... -------------------------------------------------------------------


S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is still Short on the OEX weekly.

12/11

With the November high still intact and the market now under selling pressure, the wave 2 scenario covered in the previous update still stands as a valid view, with the market now rolled over into a possible wave 3 sell-off. Friday's close came below first Fib. support, on above average Volume, reflecting big boys selling involved. So near term, at a minimum, the 50% retracement area (2000) should be tested early next week.

This also represents the major 8/8 MML (Murrey Math Line) support, which is the strongest line in this theory. The odds of a wave 3 underway would increase with any break below the key Fib support (61.8%) area, on a daily closing basis.

Mid term, Friday's close near the low for the week and weekly momentum yet to reach an oversold condition, indicate more weakness coming, mid term.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Short on the OEX weekly.

11/20

First, master trader Nicola Delic is out with a new product, Elliott Wave DNA which will be released Monday 11/23 at 9 am EST. He manages one of the highest performing hedge funds of the last decade and now he wants to show traders how he do it. He claims to make 80% winning trades using his special Elliott Wave analysis and more.

The link will take you to a notification sign up and also i.e. a free report DL where he shows scientific proof ..."there is in fact a hidden code in the Forex that anyone can learn within hours to make more money than you ever thought possible"...

Big claims i know but at least he gives away several of his trading systems at no cost, which could be worth checking out. The same goes for his live performance report, which is quite impressive. Personally, i've downloaded his DoubleHelixSystem and the FibCashCompass using only an email adr. but i don't know how long he will offer this.

In case you have problems clicking on the link, copy and paste this URL into your browser:

http://oextradingresources.com/ewdna.html

Now, let's move on with the update. The computer i use for my Metastock charts (i.e. MACD monthly, weekly Cycle10, GA's etc.) blacked out this weekend, i'll see if i'm able to get it up and running again soon. If not, i'll continue the updates with charts from StockCharts.

The fact that the Neural Nets system is still Short on the OEX weeekly and the early November S&P 500 high is still intact, makes a wave 2 of 3 (one degree higher) scenario still possible, despite it's deep retracement. This is how the price developement looks on the S&P 500 hourly chart.

But in case the Nov. high is taken out next week, then it seems that the a-b-c-d-e pattern which developed throughout 2015 has yet to finish, with the last wave e taking prices to new highs. If so, this means the sell-off into the Aug. 24 low actually was the wave d part of this pattern.

An interesting observation on the weekly chart is the snap-back move and close up against the earlier broken wedge pattern but with weekly momentum still holding on to it's bearish mode. As long as the Nov. high remains intact, this can then be viewed as a countertrend move (wave 2) before heading sharply lower again.

This view is also supported by Volatility - VIX daily now resting at support and soon reaching major support, in case a last wave e move to new highs will be the outcome in the next week(s).

Another observation is the strong bearish divergence in the FCX vs.SPX which doesn't bode well for the stock market, once the next short term top is in place, if not already so.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is still Short on the OEX weekly.

11/13

Various Fed officials spooked the markets this week, preparing us for a possible rate hike in December, due to a strong official job number (which is not so strong under the surface). Other contributing factors fueling this sell-off were a poor Q3 earnings season, not so good Retail Sales and falling Commodity prices like Copper and Crude Oil (down 8% for the week).

The stock market plunge came on above average Volume, reflecting institutional selling involved. Prices fell below the daily 200 MA this week but is now resting on the first Fib. retracement level, calculated from the Sept. - Nov. advance. As better seen on this S&P 500 hourly chart the first leg (wave i) developed as an expanding wedge pattern before a wave ii brought prices higher again, into the 11/11 Gann Angle cycle convergence.

Currently the market is likely in a wave iii of 1 impulse to the downside, with daily RSI-2 now reached an oversold extreme. But in this case it could stay so, if this wave iii breaks below first Fib. support and goes for a test of the 50% retracement or even the 61.8% level. Since RSI-2 is quite oversold, one clue that the market is reversing, early to mid next week, is a daily reversal candlestick (i.e. Hammer or Bullish Engulfing) forming at one of these levels, on even higher Volume, revealing buyers coming to the market.

Anyway, the market closed near it's low Friday, so more weakness is possible at the start of the next trading week, at least intra-day. One possible target before a price bounce is seen, is the major 8/8th MML (Murrey Math Line) coming in at the 2000 level. In the Murrey Math theory, the 8/8th and the 4/8th MML's are the toughest support/resistance levels to break through. So in this case, a bounce from the 2000 level is not ruled out. This also happens to represent the 50% retracement area.

Mid term, naturally the strong selling this week caused a reversal in the weekly Cycle10 indicator, starting a new downside cycle pressure phase. The same goes for weekly momentum which turned bearish after this trading week and has plenty of room left before getting oversold, mid term.

The Bond market using the TLT weekly ETF as a proxy, bounced from trendline support this week. A further advance is possible next week. It may go for a test of trendline resistance sooner or later, before heading lower again.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is still Short on the OEX weekly.

11/06

The upper trendline apparently was the target for this extended wave c advance from the September low.

The Neural Nets thinks the market is heading lower, as it turned Short on the S&P 100 weekly after this trading week. Weekly Momentum is also deteriorating from an overbought extreme, any down close in the OEX next week would generate a sell signal in this weekly Stochastic indicator.

Short term, while prices have pushed steadily higher, this is not the case for the NYSE A/D 10 MA line which turned south in early October, warning about a sharp decline coming, once the divergent top is in place. In fact, this advance from the Sept. low has mainly been driven by a few Blue Chip stocks, fueled by the big boys, in the aim to shake out shorts, before the Bear could enter the stage again.

So a wave 2 topping is still a fairly good possibility, as long as the Spring/Summer highs remains intact. This is also supported by Sentiment (BPI) which has met trendline resistance. A stock market top of minimum short term degree will most likely be confirmed in place, once a clear crossover is seen in the daily NYSE Summation trend indicator. As the chart shows, this indicator catched most of the move from the Sept. low and is about to turn bearish.

In case one more brief push higher is seen next week to make another test of trendline resistance, (2118 area) then the upcoming 11/11 Gann Angle cycle convergence (+/- 1 day) is a candidate to mark a top in the market. That time window marks 90 trading days from the July bottom and 180 TD from the February top. Both are viewed as strong numbers in the GA technique, which even used isolated can be powerful enough to cause market reversals. Here a cycle convergence is noted, which makes this GA even more powerful.

The Bond market using the TLT weekly ETF as a proxy, dipped sharply this week and is about to test important trendline and key Fib. support. If this support area fails to hold on a weekly closing basis, even more weakness could be the outcome for this market.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System turned Short on the OEX weekly.

10/30

I have updated the monthly charts. The market followed the ideal path as suggested in the previous update, pushing higher intra-week but closing near the low for the week, forming a weekly Shooting Star candlestick. This reversal pattern came on quite overbought mid term momentum, as seen on the same weekly chart. Once a crossover is seen in Stochastic, the odds of a top in place would be even higher.

The deep retracement the market has been through since the August 24 sell-off low, is similar to what happened after the major high was in place in March 2000. Back then in August 2000 the market closed near the March 2000 major high, after retracing deeply from the April low. After finishing taking out many Short positions and pulling in Bulls, the market then headed sharply lower in the next two years thereafter.

A similar situation is observed these days, the October monthly close came right below the summer high. In some markets like the OEX monthly - Dow 30 and the Nasdaq Comp the close came up against earlier broken major trendlines. To me, this looks like a typical snap-back move often seen before heading south again.

So as long as the summer highs stays untouched, a deep wave 2 from the August 24 low still can't be ruled out. It probably ended Friday, as better viewed on this S&P 500 hourly chart with prices breaking out from a rising bearish Wedge. So by zooming in to one degree lower, a 3-3-5 Flat wave pattern from Aug. 24 low has probably just terminated.

Only time can tell for sure but in case this wave 2 turns out to be the correct labeling, many Elliotticians knows what's coming next... the strongest wave in this theory. A sharp wave 3 impulse could be in it's early stages. If so it should gather more and more momentum and easily blast below the Aug. 24 low, sooner or later. Any break of the summer high would negate this wave scenario though.

As for a brief update on other markets, Light Crude monthly probably finished a lower degree wave four in October, as part of an ongoing (one degree higher) wave 5 decline from the May high, so i'm still bearish on Light Crude. Support comes in around $42 per barrel. The Oil Index XOI monthly is still trading within a bearish channel, although correcting a bit to the upside these days. Resistance is up around 1300.

Gold monthly is still oscillating within a downside biased tight range, caused by two downward sloping trendlines from 2013, forming a slightly wedge looking pattern. Strong support comes in around the $1000 level, in case the oscillations lower continues. Any break above this wedge, on a monthly closing basis on a spike in Volume, would be a positive signal, with a minimum upside target being the next higher trendline at 1350-1400.

GDXJ - Junior Gold Miners weekly prices are pulling back from trendline resistance. It needs to break through this area, to open up for an advance towards the 34 level. Any break above both trendlines would be bullish for GDXJ, mid & long term. Minimum target would then be 66.

The Gold & Silver Index monthly is pushing higher, after forming a major Double Bottom earlier this Fall. First resistance is at 62 and then a more stiff one is at 64. Any clear break of both these lines on a monthly closing basis, could open up for much higher Gold & Silver stock prices thereafter.

The Real Estate market - REIT monthly is making a snap-back move towards the earlier broken Wedge pattern. So as long as the 2014 high remains intact, this is most likely a bear market countertrend move.

The Bond market ETF TLT monthly formed a bearish reversal candlestick up against trendline resistance, after the Oct. trading month. It's soon reaching the Apex of two converging trendlines, so i'm awaiting a directional breakout from this Triangle to get a clue where it's heading next. The very long term positive trend for this market wouldn't be threatened though, until both major trendlines from 2002 and 2011 have given in to bearish forces.

30y T-Bond Yield - TYX monthly found trendline support in Oct. and closed near the high for the month. The same situation as in the Bond market is seen here as well, something has to give in, either the upper or lower trendline, before the Apex is reached. Any downside breakout would indicate a test of the 2008 & 2012 lows or even the 2015 low at some point. While an upside breakout would instead make a test of the next higher trendline around the 35 level a likely scenario.

The USD monthly formed a second Hammer candlestick in October, at trendline support. The buck is probably preparing for a move higher, another test of the key Fib. resistance area is a likely outcome. This also fits with the bearish outlook for the stock market, which could force the dollar higher (flight to Cash, increasing demand).

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is still Long on the OEX weekly.

10/23

A mixture of short covering and deep pockets intervention stretched the c wave from the Sept. low even higher this week, resulting in a now quite overbought market condition, short term. In addition, Breadth indicators like the daily A/D line is not supporting this advance, which is deteriorating in the face of higher prices. Also, Put/Call Ratio readings indicates a top is around the corner, soon reaching extreme levels on the overbought side.

This at the same time as prices have entered the time window of the daily Gann Angle cycle convergence due now, which may have enough power to cause a market reversal.

In this case, even a mid term based weekly GA is due these days, which is given the usual +/- 1 week leeway. As the same chart shows, weekly RSI-2 readings have reached the same overbought extreme levels, where many mid term market reversals have happened in the past. With the mid term price trend being clearly bullish into this GA, a reversal in the opposite direction is looked for, which could occur within one week at the latest.

As this weekly Cycle10 chart shows, the close near the high for the week could mean some more upside action intra-week before a top could be in place. An ideal topping pattern would be a further push higher intra-week and then the sellers would come and force the market lower at the end of next week, creating a typical reversal pattern, (Shooting Star) often found at the end of bullish trends.

Short term limited upside potential from current levels, is also indicated by Volatility - VIX daily soon reaching a major support level. Overall, despite it's already deep retracement, a wave 2 from the August 24 low still can't be ruled out, as long as the summer high remains intact. According to the Elliott Wave Principle a wave two can retrace 100% of wave one and still be a valid wave count. Here is an updated S&P 500 hourly chart which shows the finer wave development.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is still Long on the OEX weekly.

10/16

This week's break of the September high forced a revision on the wave count. So a wave 2 from the Sept. low can now be excluded from the list of valid counts, as a wave two can't retrace more than 100% of wave one, to remain valid. The current preferred count is a 3-3-5 Flat wave 2 from August 24 finishing or already finished. If so a powerful wave 3 should lead to a sharp sell-off into late October - early November, although this wave 3 could start out slowly and then build momentum to the downside. For a zoomed in version of the market development, here is an updated S&P 500 hourly chart.

Volume readings have been weak throughout this last wave c from the Sept. low, indicating a typical bear market countertrend move is coming to an end. Upside momentum is fading and daily bearish momentum divergences are now showing up in several indicators, at overbought levels. Along with a RSI-2 bearish divergence, the Dow 30 daily made a perfect Fib. 62% retracement of the May - August decline Friday, a typical target the markets wants to reach 60-70% of the time in any time frame, before reversing.

A look at weekly charts, shows i.e. overbought OEX weekly momentum readings, with prices at the same time nearly reached a stiff resistance area, produced by the earlier broken channel, which now acts as strong resistance instead. Weekly Cycle10 has entered it's sell zone as well. So personally, i'm bearish on the stock market in the coming weeks.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is still Long on the OEX weekly. Nb. the Nets tend to produce more whipsaw signals in highly volatile markets and should be taken with a grain of salt.

10/02

I have updated the monthly charts. Long term, i'm still in the bearish stock market camp. MACD monthly is firmly in bearish mode and RSI-25 monthly has a long way to go before it's getting oversold. At a minimum, the first Fib. support should be reached later this Fall, after finishing the ongoing short term upside corrective phase, which is a typical bear market countertrend move, killing many Short positions before heading lower again. For more details, including an updated wave count, see the short term section below.

Volatility - VIX monthly closed above an important long term resistance zone for the second month in a row, making the stock market vulnerable through higher investor fear coming, as the earlier long term stiff resistance line is now producing tremendous support instead.

A look at a few individual stocks which paints a clear picture of the Fall storm coming in the market: Apple monthly has finished a large C wave from the 2008 low and closed below the lower part of a bearish Rising Wedge in September.

A similar structure is observed in Google monthly, a text book five wave looking C from 2008 has terminated, which would be confirmed with a break below the wave 4 Triangle low, in the coming months. Google formed a Shooting Star reversal candlestick in September, a signal it is heading lower. It's range came within the August trading range, reflecting indecision among Google investors.

Light Crude monthly is working on a lower degree wave four, as part of a wave 5 decline from the May high, so overall i'm still bearish on Light Crude. Support comes in around $42 per barrel. The Oil Index XOI monthly has establish a bearish channel, so the outlook for Oil in general is firmly bearish, as long as this channel remains intact. This market closed below it's key Fib. support in September. For consumers this should be positive in the long run, lowering i.e. gasoline prices even more. The 2008 low right below the 800 level should be an important support level, long term.

Gold monthly is still oscillating within a downside biased tight range, caused by two downward sloping trendlines from 2013, forming a slightly wedge looking pattern. Strong support comes in around the $1000 level, in case the oscillations lower continues. Any break above this wedge, on a monthly closing basis on a spike in Volume, would be a positive signal, with a minimum upside target being the next higher trendline at 1350-1400.

A similar situation is observed in the GDXJ - Junior Gold Miners weekly chart. It needs to break through 24, to open up for an advance towards the 34 level. Any break above both trendlines would be bullish for GDXJ, mid & long term. Minimum target would then be 66.

The Gold & Silver Index monthly could be forming a major Double Bottom from 2000, with RSI-25 getting mildly oversold these days. The September trading month formed a Hammer looking candlestick at this support, likely finishing a five wave Impulse structure from the 2010 high, giving a positive outlook for this index. First target is the 64 resistance area. Any monthly close below the 2000 low would be a stop-out for this bullish scenario.

The Real Estate market, using REIT monthly prices as a proxy, is slowly stair-stepping lower from it's 2014 high. So the trend is still bearish for this market, long term. First Fib. support comes in at the 1100 level. Any break above trendline resistance could be positive for this market.

The Bond market ETF TLT monthly is soon reaching the Apex of two converging trendlines, so i'm awaiting a directional breakout from this Triangle to get a clue where it's heading next. The very long term positive trend for this market wouldn't be threatened though, until both major trendlines from 2002 and 2011 have given in to bearish forces.

30y T-Bond Yield - TYX monthly is also naturally then facing the same situation, something has to give in, either the upper or lower trendline, before the Apex is reached. Any downside breakout would indicate a test of the 2008 & 2012 lows or even the 2015 low at some point. While an upside breakout would instead make a test of the next higher trendline around the 35 level a likely scenario.

The USD monthly is still in a consolidation phase (wave 4) it seems, but September's Hammer candlestick formation could mean the buck is heading higher this fall, towards another test of the key Fib. resistance area. This also fits with the bearish outlook for the stock market, which could force the dollar higher (flight to Cash, increasing demand).

Short term, as the S&P 500 weakness early in the week failed to fully reach the Aug. 24 low, i have re-labeled the charts with a wave count which has a higher probability of reflecting the true market development at the moment. This new count is a wave 2 of 3 underway from the Sept. low.

As RSI-2 is quite overbought and the market is facing trendline and key Fib. resistance early next week, odds are good it could stall around that level (1965). If overcome however, the Sept. 17 high (2020.86) would be the negation point for this wave 2. If this occurs, i have another wave scenario which will be presented then.

Here is also a S&P 500 hourly chart version of the market development.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is still Long on the OEX weekly. Nb. the Nets tend to produce more whipsaw signals in highly volatile markets and should be taken with a grain of salt.

09/25

Q2 GDP number came in stronger than expected at +3.9%, caused by stronger than expected personal spending.

This updated S&P 500 hourly chart shows the first leg (wave 1) of a one degree higher wave 3 impulse to the downside, most likely finsihed at Thursday's low. So the wave 2 of this 3 is now underway from that low, with the a-b part of this a-b-c structured wave 2 just completed. So one more pop to the upside in wave c is looked for early next week, before prices are likely heading sharply lower again.

This view is supported by taking a look at Volatility, the VIX daily chart which shows it's ready to explode higher again, after finding trendline support Friday.

A natural target for this wave c could be the trendline as seen on the same hourly chart. If we are really dealing with a wave 3 of 3 soon, it should be much sharper than the wave 1 from the mid Sept. high and should easily take out the important Aug. 24 mini crash low, sooner or later.

The alternate wave scenario is a wave ii of 5 now underway to the upside, which should have less bearish potential to the downside in wave iii, even a Double Bottom pattern with the Aug. 24 low is possible, when the last wave v is finished. Bullish momentum divergences showing up at a Double Bottom pattern formation, would increase the odds of a wave 5 completing then, with prices heading higher thereafter, a retracement of the decline from the May high.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is still Long on the OEX weekly. Nb. the Nets tend to produce more whipsaw signals in highly volatile markets and should be taken with a grain of salt.

09/18

As better seen on this S&P 500 hourly chart, because of the depth of the retracement from the August low, the price structure developing from that low is more likely an a-b-c wave 2 (one degree higher), instead of the earlier wave iv preferred count. So the odds are good the market is now in the early stages of a serious wave 3-4-5 decline, the remaining part of a very bearish five wave Impulse structure, which could last into the end of October - early November time window. This bearish view is also supported by the bearish September - October seasonal factor which has been activated.

Friday's selloff came on above average Volume, after Thursday's bearish Shooting Star candlestick formation up against key Fib. resistance. Which also came on a Volume spike, reflecting institutional sellers rushing to the market, after the Fed's comment on being too scared about the global economic situation, to raise interest rates and also the start of unloading Bonds from it's balance sheet.

This supports the view that the advance from the August low was just a bear market countertrend move and not the start of a new bull trend, as the Volume readings throughout this wave 2 advance have been weak (no institutional buying).

Volatility - VIX daily found support on an important trendline and is probably heading much higher in the coming weeks. This outlook for higher Volatility (investor fear) doesn't bode well for the stock market.

Another important observation after this trading week, which also indicates lower mid term prices ahead, is the weekly Shooting Star formation up against the earlier broken trendline, which now acts as strong resistance instead. This is a classic snap-back move towards a broken trendline, before the new bearish trend continues.

So overall, i'm taking a bearish stance on the stock market into late October - early November, when a significant but temporary market rebound is looked for. The facts are $1.86 trillion of wealth was wiped out of the economy in the May - August market plunge. Interest rates are at zero and another potential market crisis would leave the Fed with no remedies left, it's stuck.

And another potential QE stimulus program would only serve to put even more load on already overloaded tax payers, while temporary refueling Wall Street, a strategy which is probably going to fail, sooner or later. If so, it would be a disaster for the economy and the markets thereafter. So what goes up big time (especially in an artificial way) must come down big time, that's the cyclical law of the markets, which is most likely going to be felt in the coming months and years, in my opinion. This, in line with what should be expected from a Grand Super Cycle degree bear market.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is currently Long on the OEX weekly. Nb. the Nets tend to produce more whipsaw signals in highly volatile markets and should be taken with a grain of salt.

09/04

Updated monthly charts shows the broad stock market is breaking down from long holding Rising Wedges and price Channels, on a monthly closing basis. This is likely just the early stages of what the bearish divergences in i.e. the A/D monthly - RSI-25 monthly and MACD monthly have been warning about for quite some time, a massive stock market collapse similar to what we saw from the 2000 & 2007 peaks. Which in my opinion, is most likely going well below the major 2009 stock market low sooner or later, in the coming years.

Weekly trendline support gave in to the bearish forces this week, so far in line with the preferred count on the S&P 500 hourly chart which indicates a wave 5 test of the Aug. low is in the cards. But as long as this low stays intact, the alternate count can't yet be ruled out either, an a-b-c corrective wave 2 (one degree higher) to the upside, with the wave b part of it now likely completing.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is Short on the OEX weekly. Nb. the Nets tend to produce more whipsaw signals in highly volatile markets and should be taken with a grain of salt.

08/21

The S&P 500 and other key markets are falling hard on heavy Volume, showing strong institutional selling. The flight went to i.e. Gold, pushing Gold prices higher this week. So far the wave d and even the February low has been broken in the S&P 500. RSI-2 has reached an oversold extreme and i.e. Put/Call Ratio readings have now reached levels not seen in years.

With this in mind, a likely time target for when this short term wave 3 Impulse sell-off could end is the upcoming 08/25 Gann Angle Cycle convergence which is given the usual +/- 1 day leeway. I'm looking for a reversal pattern forming around then.

An upside biased wave 4 corrective phase or at least a temporary recovery could start around that day next week, if the short term bearish trend is still intact, when that time window is entered. This GA marks 144 Trading Days from the January low and 180 TD from the December 2014 high, a strong enough cycle convergence to cause a reversal of short term degree.

Investor fear is exploding, as reflected in the sharply higher VIX daily readings. Because of the greatly increased Volatility, traders could face wilder market swings in both directions, which however, is probably welcome for some, those able to time the swings.

But the overall trend could be bearish for quite some time, as a clear downside breakout is also seen on the OEX weekly chart although this market found support on the next lower trendline & key Fib. support at the close for the week. Weekly momentum is soon getting oversold.

Sentiment is also breaking below long standing channel support, as seen on this S&P 100 BPI (Bullish Percent Index) daily Sentiment chart.

The Neural Net System is currently Short on the OEX weekly. Nb. the Nets tend to produce more whipsaw signals in highly volatile markets and should be taken with a grain of salt.

08/14

Industrial Production rose 0.6% in July but only 0.1% excluding Autos and the stock market was apparently not excited about it.

Overall, the S&P 500 market has stair stepped lower from the July wave e high, in what could be a series of wave two's lower, as better seen on this hourly chart. Hourly RSI-2 is about to reach an overbought extreme, so likely reversal zones at the start of the new trading week, could be from trendline resistance or the key Fib. 62% level, found slightly higher.

Any sharp wave 3 sell-off below the July wave d low, and a weekly OEX close below wedge support would increase the chances of a completed a-b-c-d-e Wedge pattern from late 2014 and as a result, a mid & long term bearish trend could be underway. It would take a move above the wave e high to negate this currently preferred wave scenario.

A sharp sell-off soon is also alerted by the crashing FCX vs. S&P 500. In addition, Volatility - VIX daily is once again soon reaching tremendous support, which is most likely going to hold, pointing to higher Volatility (fear) ahead.

Again, as long as the wave e high stays intact, a sharp decline soon can't be ruled out. Market history proves that a series of lower highs as experienced in recent weeks, is often a setup pattern for more serious declines. But only time can tell about the real outcome in this case, sure is interesting weeks ahead in the markets, so i'll try keep you updated.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 08/14) is currently Long on the OEX weekly.

07/31

I have updated the monthly charts. Stock market prices continues to hold up, while the underlying technical condition is still weak and monthly RSI-25 & MACD is also deteriorating in the face of the S&P 100 new all time high in July.

Light Crude monthly is likely going for a test of the Spring low. July's close near it's low, indicates more to come to the downside in August.

The Gold market is also getting weaker, but an Expaned Flat a-b-c scenario is still not ruled out. Strong support is down around the $1000 level. RSI-25 should be oversold at that point.

The Google monthly stock seems to be in an ending phase of a long term five wave structure from 2008. July's thrust up from a wave 4 triangle pattern, could be the final wave 5. This view is supported by the long term bearish RSI-25 divergence and Volume drying up. Reversal candlesticks like a monthly Shooting Star or a Bearish Engulfing pattern up against resistance, would signal weakness this coming Fall.

Short term, an interesting setup can be seen on the VIX daily chart. It's currently resting at strong support, with RSI-2 at the same time forming a 'bullish' divergence. So higher Volatility (fear) could be the outcome early next week, which would put pressure on the stock market, near term.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 07/17) is still Long on the OEX weekly.

07/24

Updated indicators: NYSE A/D line - TRIN - Put/Call Ratio
NYSE Summation Daily & Weekly trend - 21 EMA McClellan

Prices came down from the 07/17 Gann Angle Cycle +/- 1 day time window on above average Volume, reflecting institutional selling involved. As this S&P 500 hourly chart shows, it could be a wave i or b of e underway to the downside.

Friday's low came exactly at the key 62% Fib. level and closed for the day near this low, indicating more to come to the downside Monday, at least intra-day, possibly towards the 200 MA support at around 2065. Trendline support comes in about 10 points lower.

With RSI-2 now at an oversold extreme, there is a roughly 70% chance that the S&P 500 will close above it's 5 day EMA, within a week. Ideally, a reversal candlestick should form at the 62% Fib. support area, which would be a near term bullish signal.

I've calculated the next notable daily Gann Angle Cycle convergence. 08/25, +/- 1 day, may contain a short term top or bottom. The directional price trend going into this time window, would then point to a reversal in the opposite direction. This GA marks 144 trading days from the January bottom and 180 TD from the December 2014 top.

This upcoming daily GA happens to coincide with the next weekly 08/17 GA, if it turns out to be 1 week late in it's time window. This one marks 90 trading weeks from the March 2014 low and 180 TW from the May 2012 low. So it's a powerful GA which could lead to a reversal of higher than short term degree.

June new home sales fell to 482,000, from May's 546,000 and short of economists expected 550,000, reflecting a tiring consumer and housing sector.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 07/17 due to kernel error) is Long on the OEX weekly.

07/17

With a Nasdaq Comp. blow-off in new all time high territory, i've relabeled the S&P 500 daily and the S&P 500 hourly chart to reflect a possible last wave e now underway. Although a deep retracement, there is also still a chance the S&Ps and the Dow 30 is working on a wave ii of 3, as long as the supposed wave i (June) high stays intact.

In general, price history proves that low Volume 2nd lower highs as observed now, can lead to sharp sell-offs in the market. With RSI-2 now at an overbought extreme, Friday's close up against minor trendline resistance could mark a near term top in the market. At least a pull-back is not ruled out, minimum towards the first Fib. support level around 2095.

In addition, the market rallied into the next daily Gann Angle Cycle due now, +/- 1 day in the OEX. This GA marks 90 Trading Days from the March low and could be strong enough to cause a bearish reversal. The market blasted through all the DGL (Dynamic Gann Level) resistance lines, although it stopped for a few days up against the key L3 DGL before continuing.

Another important technical point which gives support to a near term top scenario is that Volatility - VIX daily closed at strong trendline support Friday and given it's deeply 'oversold' RSI-2, odds are good we'll see higher Volatility (investor fear) next week and with it, pressure on the stock market.

Divergences in the SPX vs. FCX often warns about short term market tops and bottoms and a rare big one has developed in the FCX since summer 2014, compared to the S&P 500's new highs oscillations, a strong warning about what is brewing in the stock market.

Mid term, one of the bellwether stocks GM weekly has fallen below an important trendline from 2012, on above average Volume, reflecting institutional selling. With RSI-25 soon getting oversold, a snap-back move towards this broken trendline could start thereafter.

Weekly Cycle10 has started on a new upside cycle pressure phase. As the chart shows, the OEX closed above the 935 trendline, which is drawn through weekly closing highs but also needs to make one more higher close, to overcome the trendline drawn through the weekly highs, before the horizon is clear for a further advance towards weekly channel resistance.

Personally, i've used this market advance to add to my long term ETF Bear fund position, as in my view time is running out for good entries, at a good price, also because the seasonally weak part of the year is soon coming.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 07/17 due to kernel error) is Long on the OEX weekly.

07/10

Updated indicators: NYSE A/D line - TRIN - Put/Call Ratio
NYSE Summation Daily & Weekly trend - 21 EMA McClellan

A full five wave Impulse structure from the June high probably finished a wave 1 or wave d at the July 07 low, with a wave 2 or e now underway to the upside. A minimum 38% Fib. retracement is now fulfilled for the wave 2 scenario, as seen on this S&P hourly chart. The wave 2 count would be valid as long as the June wave 1 high stays intact, because according to the Elliott Wave Principle a wave two can retrace 100% of wave one, and still remain a valid count. A typical wave two retracement area is 50% - 62%.

If the June high is broken, then the wave e possibility would be moved to the forefront as the preferred count. This weekend's outcome (if any at all) of the EU & Greece related negotiations could set the tone for the coming trading week. A negative outcome could ignite a wave iii of 3 Impulse to the downside, while a positive one would favor the wave e scenario, which is projected to go beyond the June high at some point, to finally finish a wave E from 2009 and with it a giant A-B-C-D-E Megaphone pattern or a wave B scenario of Cycle degree, from March 2009.

In the positive wave e scenario, this updated Dynamic Gann Levels - DGL daily chart shows some likely short term resistance challenges, on the way up. L3 is the key DGL level the market wants to reach around 60-70% of the time, before reversing.

Weekly Cycle10 is bottoming out and a Hammer reversal candlestick is observed after this week. So if the market decides to go higher in the coming week(s), the 935 area should be stiff resistance, the chart shows why.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 04/17) is still Short on the OEX weekly, after this trading week.

07/02

Long term charts are updated. The Dow Transports monthly is leading the market lower, falling 11% so far this year and has broken below long term trendline support. The Dow 30 has yet to do so in a clear way but has fallen below a minor trendline, long term.

Volatility - VIX monthly could spike above long standing trendline resistance soon, with increasing downside momentum in the stock market. The VIX closed above quite strong trendline resistance after the June trading month and has just one trendline barrier left, before a more explosive move could start.

The monthly MACD trend indicator is firmly holding on to it's bearish mode, after it turned negative on the stock market after the December 2014 trading month.

The Bond market, using the TLT monthly as a proxy, closed in June at 50% retracement support, with RSI-25 yet to reach an oversold condition.

So because of the falling Bond market, the U.S. 30-year T-bond Yield - TYX monthly is on the rise and has overcome trendline resistance. The next trendline resistance challenge is up around the 35 level.

The spread between junk bonds and T-bonds is widening, a sign that debt world wide could implode beyond what is seen among EU member countries like Greece and also Puerto Rico, two recent examples of the broadening crisis world wide. According to the ongoing 'Winter' part of Kondratieff's economic cycle, it's purpose is to i.e. clean out debt, before a new 'Spring' phase ( 2020 --> ) can start.

With the stock market getting weaker, a flight to safety could result in a higher Gold market soon, in line with the expected wave c to the upside starting soon. Any monthly close below Wedge support would most likely negate this scenario but Falling Wedges usually breaks to the upside, so that is another reason why i'm bullish on this market, with a minimum upside target being the 38% Fib. resistance area (1450) which also happens to represent an important trendline resistance area.

A look at Light Crude Oil monthly shows a consolidation phase going on up against the earlier broken trendline, which now acts as a stiff resistance area instead. Since the advance from the Spring low is likely either a wave 4 or a wave a of 4, another move lower could start soon. If a wave 4 is finishing, then a re-test of the Spring low is a probable outcome, not so deep if a wave b is starting, excluding a more rare Expanded Flat scenario, which could take prices slighly below that low, before heading higher again.

The USD monthly has been in a wave 4 corrective phase since March this year. Once it's over, a resumption of the overall positive trend is looked for. A weaker stock market (flight to cash) could drive the buck higher long term, at minimum a Double Top should be the outcome.

The Real Estate market has clearly broken out from a Rising Wedge pattern and has established a bearish trendline. It should fall along with the stock market, long term. First Fib. support comes in around the 1100 level.

Short & Mid Term

Updated indicators: NYSE A/D line - 21 EMA McClellan - Put/Call Ratio - NYSE Summation Daily & Weekly trend.

The earlier wave 3 possibility was excluded from the list of valid counts, as the June low was taken out. So the recent price action is now viewed as either a wave d soon completing, with the last wave e to the upside next. Or the wave e already ended at the May high, with the first ripples of the next bear market phase now underway.

As mentioned in the previous update, any "...sell-off into the 07/03, +/- 1 day GA, could instead mean a near term bottom is forming then. This GA marks roughly 90 Trading Days from the February top and 180 TD from the important Oct. 2014 bottom."...

That said, this weekend's Greece development could trigger further sell-off though, it remains to see how the market will react this coming week, higher Volatility could be the outcome.

A look at the weekly Cycle10 chart shows a downside breakout from the Wedge pattern, with Cycle10 at the same time bottoming.

The 20Y T-Bond ETF TLT weekly is trending lower, with RSI-25 yet to be oversold. It could go for a test of major trendline support, before a significant bounce could be the next likely event for this market.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 04/17) is still Short on the OEX weekly, after this trading week.

06/19

Updated indicators: NYSE A/D line - 21 EMA McClellan - Put/Call Ratio - NYSE Summation Daily & Weekly trend.

At the second attempt, the S&P 500 once again failed to overcome the earlier broken Wedge line, which apparently acts as a stiff resistance area. As better seen on the hourly chart a wave 3 of c could be on it's way higher, a possible wave scenario which will be negated if trendline support gives in on the daily chart. Any daily close into the Wedge pattern, could open up for even higher prices, to complete the one degree higher wave e, later this summer.

As mentioned in the previous update, if an advance continues or prices holds up into early July, i'm looking for a bearish market reversal around the daily Gann Angle Cycle convergence due 07/03 (+/- 1 day). Any sell-off into it, on the other hand, could instead mean a near term bottom is forming then. This GA marks roughly 90 Trading Days from the February top and 180 TD from the important Oct. 2014 bottom.

The third Hindenburg Omen since June 10 was observed Wednesday, flashing another warning signal about the unhealthy stock market condition. The HO tend to come into effect months later, so the seasonally weak September - October period looks especially vulnerable this year and may contain some serious market weakness.

A look at the weekly Cycle10 chart shows a still intact weekly Wedge pattern, as prices have not yet broken out on a closing basis. Since prices are getting close to the Apex (the meeing point of the two trendlines) of the Wedge, something has to give in soon, resulting in either a positive or negative breakout. Rising Wedges normally breaks to the downside.

The 20Y T-Bond ETF TLT weekly is reacting up from 50% retracement support. Resistance is up around 122.5, trendline resistance is slightly higher.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 04/17) is still Short on the OEX weekly, after this trading week.

06/12

Updated indicators: NYSE A/D line - 21 EMA McClellan - Put/Call Ratio - NYSE Summation Daily & Weekly trend.

The suggested resistance/target area was reached Thursday before making a pull-back Friday, on low Volume. This could be a wave 2 in it's last stages, as better seen on this S&P 500 hourly chart. This could mean a wave 3 to the upside is starting early to mid next week, as part of the last five wave c, which in turn should complete the one degree higher wave e, later this summer. If the wave 1 low is taken out next week it would negate the wave 2 possibility and could instead mean the overall wave e already reached it's termination point at the May high.

If an advance continues or prices holds up into early July, one candidate to cause a bearish market reversal is the upcoming daily Gann Angle Cycle convergence due 07/03 (+/- 1 day). It marks roughly 90 Trading Days from the February top and 180 TD from the important Oct. 2014 bottom.

Both these cycle numbers isolated are powerful enough to cause market reversals. When they form a convergence like in July, it's an even more powerful setup and worth keeping an eye on.

So an advance or consolidation going into that time frame, would point to a reversal in the opposite direction. Any short term decline into it, on the other hand, would point to a bullish reversal around that time.

A look at the weekly Cycle10 chart shows indecision in the market, reflected by the Doji looking candlestick formed at Wedge support.

Investors are probably waiting for Yellen and the Fed's interest rate decision this coming week. In the Fed's eyes the broader economy may look stronger and a reason to finally raise short term rates, for the first time in 6 years. If so, it could be bad news for the stock market. Untouched rates, on the other hand, could be the trigger for a wave 3 impulse to the upside, as discussed above.

June's Consumer Confidence number rose to 94.6, higher than the expected 91.0. PPI - Producer Price Index rose 0.5%, in line with expectations, and a positive reversal from the previous month's 0.4% decline.

The 20Y T-Bond ETF TLT weekly is still resting at 50% retracement support.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 04/17) is still Short on the OEX weekly, after this trading week.

06/05

Updated indicators: NYSE A/D line - 21 EMA McClellan - Put/Call Ratio - NYSE Summation Daily & Weekly trend.

Jobs report came in higher than expected this week, 280,000 new jobs, compared to April's 221,000. That could also be another reason for Janet Yellen and the Fed to raise rates soon.

As better seen on the weekly Cycle10 chart prices are resting on lower Wedge support. So the coming trading week may tell if a breakdown (closing basis) or a bounce is next on the list of likely events for the market.

Although the Neural Nets turned bearish on the OEX weekly after this trading week, near term, a brief rebound is not ruled out early next week. This in the form of a snap-back move towards a recently broken trendline, as seen on the S&P 500 daily chart.

Friday's daily Hammer reversal candlestick formation (on above average Volume) at trendline support and the now oversold, bullish divergent RSI-2, gives support to this view. The resistance/target area is up around 2110-15, depending on when it's reached. If it fails to hold (daily closing basis) it could open up for even higher prices thereafter.

The 20Y T-Bond ETF TLT weekly continued on it's overall bearish path this week, after a brief rebound. It's now resting at 50% retracement support. RSI-25 is not yet oversold.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 04/17) turned Short on the OEX weekly, after this trading week.

05/29

Updated monthly charts.
A second Shooting Star candlestick, at nearly the same level is observed in i.e. the OEX monthly after the just ended May trading month. So the broad market is still working on a major top formation.

The major L3 DGL resistance area seems to play an important role in this regard, for 7 months the market has struggled with this stiff key DGL resistance, without any success in overcoming it.

Monthly MACD is still bearish, so is monthly momentum which has just left it's overbought territory, creating a bearish divergence vs. prices, which are still holding up. Volatility - VIX monthly once again closed up against trendline resistance in May.

June 07 is the next Bradley Siderograph turn due. If prices holds up until then, that Bradley secondary top could mark the start of a major decline, which would be confirmed with any clear downside breakout (monthly closing basis) from the major Wedges in the S&P's, Dow, Nasdaq Comp. NYSE Comp. etc. An early warning could be a break of the lower OEX weekly channel line in the coming week(s). A potential Grexit in June could be more fuel on the Bear fire, long term.

Bonds - TLT monthly formed a Hammer reversal candlestick at 50% retracement support in May, on strong Volume, reflecting buyers coming to the market, so higher prices could be the outcome.

Gold monthly is consolidating within the Triangle pattern, still not ruling out a wave c higher soon.

Real Estate - REIT monthly is breaking out from a major Rising Wedge pattern.

Light Crude monthly closed up against the earlier broken major trendline and has possibly finished an a-b-c wave 4 pattern, which could mean lower Oil prices coming, signaled by any break of the Doji low in June.

The USD monthly is bouncing from near major support, the close near the high could mean an even higher buck in June.

Yield - TYX monthly pushed through trendline resistance intra-month but failed to close above it. So it's now vulnerable to fall back for support.

Short Term
Updated indicators: NYSE A/D line - 21 EMA McClellan - Put/Call Ratio - NYSE Summation Daily & Weekly trend.

Still awaiting directional clues here, as the market is still trading within the rising Bearish Wedge. One more push higher in the first week of June is not ruled out, possibly to finish the wave e from March this year. This is also suggested by Volatility - VIX daily which is facing stiff trendline resistance in a day or two.

Mid term, weekly Cycle10 turned bearish after this trading week. The same goes for weekly momentum.

The 20Y T-Bond ETF TLT weekly bounced back to the first Fib. area, on low Volume. This ETF has now established a slightly Wedge looking pattern. After a rebound, it could continue oscillating lower, as RSI-25 is not yet oversold.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 04/17) is still Long on the OEX weekly, after this trading week.

05/22

Updated indicators: NYSE A/D line - 21 EMA McClellan - Put/Call Ratio - NYSE Summation Daily & Weekly trend.

Q1 U.S. GDP number reflects economic slowdown, Retail Sales are flat, April Non-farm payrolls were flat.

The S&P 500 daily is consolidating up against minor Wedge resistance. By zooming in to the S&P 500 hourly chart one can see prices breaking out from a Rising Wedge pattern, which could lead to price weakness, after the long holiday weekend. First Fib. support is down around the 2109 level and important trendline support comes in at the 2085-90 area.

Near term price weakness is also suggested by what looks like a just completed a-b-c wave pattern to the upside, as seen on the same hourly chart. Time will tell if the one degree higher wave e has also reached it's termination point or not.

Volatility - VIX daily resting at strong trendline support and it's RSI-2 'bullish' divergence, also indicates stock market weakness next week, as the outlook for higher fear among investors, could put pressure on the stock market.

OEX daily momentum has already turned bearish, from an overbought extreme condition. Any daily close below the grey support line, could open up for more weakness, short term.

Mid term, weekly Cycle10 is topping, with RSI-25 at the same time tracing out a bearish divergence. The Shooting Star candlestick formed up against Wedge resistance after this week, is of the type which often marks reversal points in the market.

An overbought and bearish divergent weekly momentum is also preparing for a reversal it seems. A Stochastic crossover would increase the odds of mid term weakness coming.

The 20Y T-Bond ETF TLT weekly is deteriorating further, the next support area is 50% retracement, at the 118 level.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 04/17) is still Long on the OEX weekly, after this trading week.

05/15

The S&P 500 made it's second attempt Friday to overcome resistance. Until this occurs on a daily closing basis, it's vulnerable to fall back for support, before possibly heading higher again thereafter.

Volatility - VIX daily about to reach strong support, also indicates a price pull-back coming Monday, possibly after a brief intra-day push higher in the S&P 500.

This is also suggested by S&P 500 hourly RSI-2 about to reach the overbought extreme level, where it would normally make a bearish reversal.

Any daily close Monday, above the resistance area now under attack, could open up for further price strength towards the next minor trendline resistance challenge and even the larger Wedge resistance zone, (2150 area) before the next short term top could be in place.

This overall near term bullish view is supported by the Neural Nets still being Long on the OEX Weekly after this trading week. In addition, weekly Cycle10 is still in an upside cycle pressure phase, although it has entered it's sell zone. Weekly Momentum is also getting overbought but has not yet reached an extreme level.

On a weekly basis, the directional breakout from the Wedge pattern seen on the weekly Cycle10 chart, would signal a test of the channel at some point. The RSI-25 bearish divergence vs. the higher peaks in prices, could mean a downside breakout and a test of the lower channel line is the next likely event to look for, mid term. Any upside breakout would instead signal a move towards channel resistance.

The 20Y T-Bond ETF TLT weekly closed below first Fib. support Friday, with RSI-25 yet to be oversold and Volume is increasing.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 04/17) is still Long on the OEX weekly, after this trading week.

05/08

A still intact Rising Bearish Wedge and the late week positive reversal from Wedge support, could mean the last wave e of this Wedge is underway from Thursday's low. A likely target for this wave e is the upper Wedge resistance (2150 area).

By zooming in on the finer degree on the S&P 500 hourly chart, this wave e could take the form of an a-b-c zig-zag to the upside, with the wave a part now likely completing, which should lead to a wave b pull-back starting early next week. This wave a topping scenario is also supported by the soon overbought extreme in RSI-2.

The 20Y T-Bond ETF TLT weekly has broken down through trendline support and also took out the recent pivot closing low. It closed at first Fib. support Friday. With plenty of room left before RSI-25 is getting oversold, more price weakness is not ruled out.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 04/17) is still Long on the OEX weekly, after this trading week.

05/01

Short term, a slightly revised wave count opens up for two possible scenarios for the coming market top. Either Monday's high was the final push to new highs or if breached next week, a last move towards the upper part of what could be a bearish Rising Wedge forming, could be the outcome.

The complex price structure from the December 2014 low is now best labeled as an a-b-c-d-e Wedge pattern, with the wave e part already completed (April 27 high) or it will finish up against the Wedge roof.

Anyway, regardless of the price level where the last gasp of the Bulls will come, any downside breakout from the Wedge will most likely confirm a completed wave c from the Dec. 2014 low and with it, possibly a completion of the one degree higher wave e from the Oct. 2014 low. If so, the stock market could be in serious trouble in the months after the final price peak is in place.

Long term, with the April trading month just ended, Sentiment as reflected by the Bullish Percent Index BPI monthly took a dive, after testing a broken trendline from below.

Chances are the Nasdaq Comp. monthly is forming a major Double Top from 2000, a view which is supported by the overbought RSI-25 and also it's failure to back up the roughly 1200 points advance from the April 2014 low, flashing a strong warning sign. In addition, it's making a lower peak vs. it's 2000 high reading, forming a long term bearish divergence.

In addition, see the persistent weak technical condition of the New High - New Low Index - A/D monthly and the NYSE Summation Index monthly. So any clear monthly price breakout to the downside, from the Rising Wedge would increase the odds of a major tech market top in place.

The same goes for the major Rising Wedges observed in the S&P 500 monthly - Dow monthly - OEX monthly and also in the Real Estate market, using the Dow Jones REIT index as a proxy. OEX monthly MACD is still holding on to it's bearish mode, after the April trading month. A Shooting Star bearish reversal candlestick is observed in this market.

In general, the broad market didn't make any price progress in the past 3 months but Volume readings have spiked to sometimes slightly above average. This could mean institutions & market makers are quietly unloading their Long positions, which often leads to a choppy market environment and a slow topping process, as a result.

In fact, the NYSE Composite monthly market formed a Shooting Star candlestick in April, on a quite strong Volume reading. These Pin bars are often powerful reversal signals, so let's see what the May & June trading months will bring for the stock market.

Light Crude Oil closed up against the earlier broken major trendline. The close near the high, indicates more to come to the upside, at least intra-month. First Fib. resistance is up at the 70 level.

In Gold i'm looking for a wave c to start to the upside, which could bring prices towards first Fib. resistance, as a minimum upside target. This area also roughly represents trendline resistance, so it's a high probability target.

Yields are climbing and probably going for a test of trendline resistance in May. If overcome (closing basis) it could open up for even higher interest rates, as RSI-25 has plenty of room left before getting overbought, long term.

The Dollar is pulling back, after reaching the key Fib. resistance area in March. Strong support is down around 92.5.

The 20Y T-Bond ETF TLT monthly closed at major trendline support in April. Any monthly close below this important trendline, could open up for more weakness in the Bond market.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 04/17) is still Long on the OEX weekly, after this trading week.

04/24

As this S&P 500 hourly chart better shows, with the February high now breached, the alternate wave count is now moved to the forefront, indicating a still active wave c from the Feb. low. It could either finish at current levels or make a pull-back towards Triangle support, before once again heading higher, towards the next higher trendline resistance, up around 2125 - 2130 area.

Anyway, the overbought & bearish divergent RSI-2 and overbought Put/Call Ratio readings and the Hammer forming up against resistance Friday, indicates a pull-back coming early next week. With this in mind, there is a Bradley turn due Monday. Important Triangle support is down around 2090. If it fails to hold (closing basis) it could open up for more weakness thereafter, giving support to the first wave scenario, as mentioned above.

Weekly momentum is pushing higher but has yet to reach overbought territory. With the move to new weekly closing highs in the OEX, weekly Cycle10 joined momentum this week, making a bullish reversal. But look at the RSI-25 bearish divergence, warning a top could be near.

The 20Y T-Bond ETF TLT weekly pulled back this week, falling below the recent pivot low, indicating more to come to the downside. Strong trendline support is down around 127.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 04/17) is still Long on the OEX weekly, after this trading week.

04/17

Updated NYSE Summation Index trend indicator and Put/Call Ratio chart.

Despite the deep retracement from the March 26 low, the wave scenario suggested in the previous update remains the preferred one, as the Feb. and March highs are still intact, as better seen on this S&P 500 hourly chart. Any daily close below triangle support would be increased evidence of a wave 3 underway.

Until this occurs, there is another likely wave scenario which is now getting more attention and will move to the forefront if the Feb. high is breached. That is a complex wave d pattern, as part of an a-b-c-d-e pattern, which should complete the (one degree higher) wave e from the Oct. 2014 low, later in the Spring. This is the alternate count at this point.

A mildly oversold weekly momentum and also the Neural Nets (now retrained) turned bullish on the OEX, after this week. But weekly Cycle10 is still in a downside cycle pressure phase and has yet to reach it's buy zone, so some mixed technical readings came out of this trading week.

The 20Y T-Bond ETF TLT weekly looks to go for a test of the key Fib. resistance area, next week. If overcome ( weekly closing basis) a further advance towards major trendline resistance, could be the outcome.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System (retrained 07/17) turned Long on the OEX weekly, after this trading week.

04/10

The analysis outlined in the previous update is still applicable, as the market has yet to take out the 02/25 (2,119.59) high. So until this happens, we can't rule out the possibility of a five wave impulse developing to the downside, indicating that the top in February could be a major one.

In fact, by zooming into the S&P 500 hourly chart, the finer degree wave development reveals that the market could be near the start of a nasty wave (3) of 3 impulse to the downside, as it's finishing a 3-3-5 a-b-c wave (2) Flat pattern, from the March low. If this wave count turns out to be correct, then the weekly trendline will likely come under attack from this strong bearish force.

Any break of the Feb. high will prove me wrong on this bearish stance and force a revision on the wave count. That's why right above the Feb. high is also an exellent area to set any Stop Loss.

The same stiff weekly trendline support was the cause of both the wave (2) and 2 lows, it's strength comes from being drawn through many short term bottoms since 2013, as seen on this OEX weekly chart. From a DGL (Dynamic Gann Levels) angle, the wave (2) bottom was caused by the L1 DGL support.

The now RSI-2 overbought extreme on the S&P 500 daily chart, makes the trendline (2110 area) drawn through the Feb. and March peaks, a maximum target for a near term top. Drawing it through the closing highs, (grey trendline) on the other hand, this slightly lower target is already reached.

Anyway, Friday's close at the high, could mean a bit more upside work, at least intraday Monday, before a top is finally in place. Soon 'overbought' Put/Call Ratio readings, gives support to the near term top scenario.

The Neural Nets have been bearish on the OEX weekly throughout the period since the last update and still is after this trading week.

A look at updated weekly GDXJ - Junior Gold Miners and weekly Light Crude shows that GDXJ is still following the major trendline lower, any clear breakout on a closing basis, would signal explosive higher prices in Junior Gold Miners, probably triggered by the upcoming sell-off in the stock market.

In Light Crude, after the wave 3 bottom earlier this year, either a simple zig-zag a-b-c wave 4 is now working it's way higher (first Fib. resistance is up around the 70 level) or this wave 4 could also turn into a more complex a-b-c-d-e Triangle, before the last wave 5 to the downside may start.

So a test of the wave 3 low sooner or later this year, is a likely scenario looked for. After a fully completed five wave structure, a more significant recovery in Light Crude prices is the next event looked for and is also a great mid & long term trading opportunity, in my view.

Long term, monthly MACD is still bearish on the stock market, after the close of the March trading month.

The 20Y T-Bond ETF TLT weekly is pulling back from the key Fib. resistance area, any break above it would indicate a test of the major trendline resistance.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Short on the OEX weekly, after this trading week.

03/20

As long as the 02/25 high (2,119.59) remains intact, a wave 2 underway from the March low is not ruled out and currently is the preferred wave count. According to the Elliott Wave Principle a wave 2 can retrace 100% of wave 1 and still be a valid count.

The updated S&P 500 hourly chart also shows an alternate count, which will move to the forefront if that Feb. high is broken. If so, it could mean the wave c from the Feb. low is still active and could take the market higher or sideways into the upcoming April 04 Bradley turn. As mentioned in the Outlook 2015 Report, an advancing market or the market holding up into this important Bradley turn, could point to a larger bearish market reversal then.

A third likely wave scenario, would also be a still active wave c from the Feb. low but is labeled as an a-b-c, with the wave c part now underway to the upside. The Nasdaq Comp daily looks like the leading index, with a five wave structure in it's last stages it seems, supported by the CCI bearish divergence and an overbought extreme in the RSI-2.

Put/Call Ratio readings getting near 'overbought' levels, also points to a near term market top soon. Friday's extreme Volume reading from the broad markets, was probably caused by Options/Futures expiration.

Speaking of divergence, look at the severe bearish divergence in the FCX vs. the S&P 500. Normally, the stronger any divergence is in these two markets, the larger the upcoming top will be... flashing a strong warning sign.

Weekly momentum is still in bearish mode, despite the up close this week.

GDXJ - Junior Gold Miners seems to prepare for an upside breakout soon. If the stock market breaks down in a sharp wave 3, a flight to safety into Gold could be the outcome. This could also be positive for Junior Gold Miners, thus finally leading to a positive breakout. RSI-25 is forming a slightly bullish divergence. In addition, last week's up close on above average Volume, could mean institutional buyers entered this market. Let's see what the next trading week will bring for this market, any clear weekly close above trendline resistance, could open up for even higher prices.

The 20Y T-Bond ETF TLT weekly tested the important trendline discussed in the previous update, before heading higher again. Key Fib. resistance is likely tested early next week. If penetrated (closing basis) it may go for another test of the larger trendline from 2008.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Short on the OEX weekly, after this trading week.

03/06

As this updated S&P 500 hourly chart shows, Friday's sell-off forced a revision on the wave count, as it made an overlap of the 02/06 wave 1 high, negating this earlier preferred wave scenario.

So instead, we are now left with two alternate possibilities. Either a full five wave structure was already finished at the 02/25 high (labeled on the hourly chart) and with it, likely completing the giant Megaphone pattern, mentioned in the Outlook 2015 Report.

Or... the wave 1 part of a five wave pattern was instead in place in early February, with a wave 4 now underway to the downside (as labeled on the daily chart). But any overlap of that new wave 1 high position, would be increased evidence of an already fully completed five wave structure.

Weekly momentum turned bearish after this trading week, so further weakness towards weekly trendline support (OEX 900 area) could be the outcome, which is also supported by the Cycle10 bearish reversal, the weekly price close near it's low and also Neural Nets still being Short on the OEX weekly.

But given the now oversold daily RSI-2, i'm first looking for a market reaction up early next week, before likely heading lower again thereafter. The big boys institutional traders joined the sell-off Friday, revealed by the above average Volume reading.

The 20Y T-Bond ETF TLT weekly resumed on it's bearish path this week, likely going for a test of important trendline support, next week. If it fails to hold on a weekly closing basis, it could open up for even more weakness, towards next trendline support.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Short on the OEX weekly, after this trading week.

02/27
As better seen on this S&P 500 hourly chart the wave 3 of c is most likely finished, with a wave 4 pull-back now likely underway, which should not overlap the wave 1 high, (2,072.40) to keep this wave count intact.

Wave four's can often turn into complex, sideways a-b-c-d-e Triangle patterns, so some consolidation is not ruled out, before once again going higher in the last wave 5. I'm looking for the final top to occur either around March 20 or the upcoming Bradley turn due in early April. Any wave 1 overlap could mean a full five wave struture is already in place.

A price pull-back is also supported by the Neural Nets turning Short on the OEX weekly, after this trading week. The Neural Nets have been behaving well lately, about to finish it's third profitable trade signal in a row on Monday's Open, after it went Long a few weeks back.

With prices making new highs earlier this week, a look at the underlying technical condition short & mid term, shows overbought & bearish diverging weekly momentum which appears ready to turn. Cycle10 has also entered it's sell territory, with RSI-25 at the same time tracing out a strong bearish divergence. A turn is also indicated by the weekly Shooting Star which formed up against minor trendline resistance.

Bearish divergences are also observed in various breadth indicators like the 10 MA of the daily A/D Issues, 21 EMA of the daily McClellan and the daily NYSE Summation Index.

These divergences could continue until the final peak is in place and is a strong warning about what is around the corner for the market.

The 20Y T-Bond ETF TLT weekly is taking a short breather to the upside, before it may head lower again. Trendline support comes in around 124.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System turned Short on the OEX weekly, after this trading week.

02/13
The S&P 500 market development from the December high morphed into a complex price pattern. The overlapping price oscillations to the January low is labeled as an a-b-c-d-e Triangle, which completed a one degree higher wave b at that point, as part of an a-b-c pattern underway from the October 2014 low.

So this last wave c now pushing higher, should then finish the wave e (one degree higher) from the October 2014 low and with it, likely finishing the giant Megaphone pattern mentioned in the Outlook 2015 Report. One possible target for the wave iii of this c is trendline resistance up around 2140-50, which is also the earlier discussed 2/8th MML resistance area.

Any continued advance and/or if the market holds up by a consolidation phase into April, then the larger Bradley turn due then could mark the final market peak.

The 20Y T-Bond ETF TLT weekly is pulling back from the larger trendline area mentioned in the previous update. With RSI-25 just leaving it's overbought area, more weakness is likely, possibly towards trendline support around 124-125, depending on when it's reached.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Long on the OEX weekly, after this trading week.

01/29
With the January trading month now ended, a look at the monthly charts shows a down close for the month, with prices now breaking out to the downside from the Rising Wedge patterns formed i.e. in the S&P 100 & Dow 30 keeping December's OEX monthly MACD bearish mode intact.

The negative trading month, resulted in long term Momentum turning bearish again, after it formed a bearish divergence pattern in overbought territory, at the time when prices tested the key long term L3 DGL (Dynamic Gann Level) from 1994, for the second time.

Long term bullish Sentiment is falling sharply, with Volatility VIX monthly at the same time closing up against it's last strong barrier, which so far has prevented a Volatility (investor fear) explosion, long term. For the sake of the stock market, let's hope it will hold in the February trading month as well.

Mid term, bearish forces are attacking long standing trendline support on the OEX weekly chart and seems to break through it, but it would take one more weekly down close to make it a clear piercing. A bearish cycle pressure phase is bottoming in the weekly Cycle10.

As for the upcoming trading week, Friday's S&P 500 close near the low indicates more weakness coming Monday, at least on an intra-day basis. A brief countertrend move higher is looked for thereafter, but likely first going for a test of minor horizontal line support at around the 1985 level. If ignored, then the next likely targets are the 200 SMA (1978 area) or the 50% retracement support, (1948) before possibly heading higher. The Neural Nets also turned positive on the S&P 100 after this trading week, generating another profitable trade, after it went Short in early December.

Light Crude monthly closed down for the 7th month in a row, at $47.85/barrel. Buyers coming into the market, helped it recovering from a $43.58 low. Given the wave 3 impulse nature of this oil crash, i'm looking for a Double Bottom (wave 5) pattern along with a bullish divergence in monthly momentum, before a sizeable move higher is possible. This pattern could take months to form.

The Dollar is soon entering an overbought condition, (RSI-25 above 70) long term. It blasted through the last major resistance line in January and closed up against 50% Fib. retracement resistance. As it closed near the high for the month, (still bullish sentiment) it could go for the key 62% Fib. level at around 101.5, before a pull-back could start.

Spot Gold monthly prices are advancing. One more higher close above the Triangle resistance would confirm an ended five wave structure from the 2011 high and a three wave corrective move underway to the upside. Likely targets would be the 50% (1513) or 62% (1625) key Fib. retracement level.

Any close above Triangle resistance in spot Gold, could also result in an upside breakout in the Junior Gold Miners market, which closed up against major trendline resistance this week.

A full five wave structure has also probably come to an end in the Gold & Silver Index XAU monthly. So higher prices also expected for this market, in the coming months. Any clear close above trendline(s) resistance (90) would open up for even higher prices, towards the 50% retracement (147) or the key 62% Fib. target at 168.

30-Year T-Bond Yield, TYX monthly is experiencing the opposite result of the flight to safety in the soaring Bond market, closing sharply lower and below the major 2008 & 2012 support level. The close near the low signals more to come to the downside, at least intra-month February. RSI-25 is soon getting oversold.

The 20Y T-Bond ETF TLT weekly market is soaring, probably targeting a larger trendline drawn through the significant 2008 & 2012 peaks, before likely starting a correction. Any break above it, could open up for even higher prices.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is Long on the OEX weekly, after this trading week.

01/02
Friday's trading session formed a Doji candlestick, which reflects indecision in the market. It's low tested the first (38%) Fib. support. This setup along with an oversold RSI-2, bodes well for a positive start of the week. December's high is at 2,093.55, in case a retest is seen at some point.

Updated indicator charts: A/D daily - NYSE Summation Index - 21 EMA McClellan - Put/Call Ratio

A weekly GA (Gann Angle Cycle convergence) is due this week. The next weekly GA available is found on June 05, +/- 1 week. It marks 90 Trading Weeks from the December 2013 high, 180 TW from the March 2012 high and 270 TW from the July 2010 low.

The mid term directional price trend going into this GA time window, would point to a short & mid term reversal in the opposite direction, due when prices enters the time window.

The 20Y T-Bond ETF TLT weekly pushed higher once again, after a brief pullback, still trading within a bullish channel. Another pullback is possible next week.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Short on the OEX weekly, after this trading week.

With my best wishes for the new trading year!

12/19 The S&P 500 found support on the L1 DGL (Dynamic Gann Level) early in the week. As better seen on this Hourly chart although it's a deep retracement from the December low, a just ended wave ii is a scenario which can't be ignored at this point, as a wave two can retrace 100% of wave one and still be a valid count, according to the Elliott Wave Principle.

One degree lower, a full a-b-c corrective structure from the December low has been counted, so a wave ii may have reached it's termination point. Only a break above the November high can negate this wave possibility.

Friday's trading session formed reversal candlesticks in the S&Ps, Dow and the Nasdaq Comp. and with the same heavy Volume reading as observed at the significant September 19 high in the markets. Although the heavy Volume could come from the so called "Triple Witching" day, it still didn't prevent the market collapse from the Sept. 19 high, which was also a TW day.

So heavy distribution & institutional selling is not ruled out, which would fit with a sharp wave iii to the downside, as the next likely event to look for in the markets. Again, any violation of the Nov. high would prove me wrong about this wave scenario and force a revision on the count.

Anyway, it's an excellent trading opportunity with a good Risk/Reward ratio (potential wave iii) and tight Stop possibility (Nov. high) showing up now, with RSI-2 also getting overbought, increasing the odds of seeing a near term reversal Monday.

The Nasdaq Comp. made an exact hit to the 38% Fib. support before rebounding. Friday's Shooting Star candlestick came up against trendline resistance, so a great Short entry opportunity here, in my view. Any break below this reversal candlestick's low would signal price weakness coming.

Several indicators support this bearish stance, i.e. the NYSE Summation Index trend indicator is in fact holding on to it's bearish mode, despite this quick run towards the recent high. Also the weekly version of this indicator is still firmly in bearish mode, indicating where the real trend is likely heading, mid term.

The 21 EMA of the McClellan indicator more or less ignored this move higher, just barely reacting up, revealing underlying weakness, increasing the odds of being a countertrend advance only.

Even the Neural Nets apparently see this as temporary rebound too, holding on to it's Short signal generated a week ago.

Volatility (fear) is calming down, the VIX daily closed at the 16.5 level Friday. Resistance is now up around 24.

Light Crude Weekly is clearly in a sharp wave 3 Impulse lower, i'm looking for a Double Bottom (wave 5) in this market, before a significant recovery could be in store for this market.

The 20Y T-Bond ETF TLT weekly is still trading within a bullish price channel but a pull-back towards channel support is possible, indicated by the reversal candlestick formed this week, up against channel resistance.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Short on the OEX weekly, after this trading week.

12/12 A brief update on likely support levels & targets for the ongoing short term decline. In the S&P 500 first 38% Fib. support comes in around 1980, 50% at 1950 (this is also 200 MA support area), key 62% Fib. support is down at 1920. Since the RSI-2 is near term oversold and now diverging, any Hammer forming at the first Fib. support, could mean a countertrend move is starting from that level. If ignored (daily closing basis) then the next likely target is 50% and so on.

In the Dow it was the worst week since September 2011, there was a clear investor flight to safety, as Bond prices soared, closing above it's 2012 high and up against channel resistance. First Fib. support for the Dow is at roughly 17200, 50% at 16900 and key 62% is down at 16650. As in the S&P 500, i'll look for a reversal pattern and a Volume spike at one of these levels, which would increase the chances of seeing a market reversal.

Volatility (fear) exploded this week, the VIX daily closed at the 21 level Friday. Important resistance is up at 31.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Short on the OEX weekly, after this trading week.

12/05 The outcome of the analysis given in the previous update was a small pull-back only but deep enough to close the 11/21 gap, which apparently was like a price magnet on the market, before heading higher once again.

The NYSE Summation Index trend indicator turned negative mid week, which increases the odds of a top forming in the S&P 500 market. Prices have more or less consolidated up against trendline resistance for the past few weeks and the market is still holding up.

Not so for several indicators like the 21 EMA McClellan - A/D - New Highs - New Lows - SPX vs. FCX which continues to trace out bearish divergences. The longer this process continues, the sharper the upcoming decline likely will be.

In addition, (for what it's worth) the Neural Net system turned Short on the OEX weekly (S&P 100) market, after this trading week. So the latest Long signal turns out to be profitable.

The stock market is once again now on an official Hindenburg Omen, which occurs when there is three HO seen in the past four trading days (in this case from Thursday). This is often a sign of more serious price weakness coming in the market, within 3-4 months at the latest. The last official HO was on September 19 and we all know what happened after that, i.e. the Dow 30 fell 1,300 points into the October low.

From an Elliott Wave point of view, it's still likely that either a wave 5 or e from the October low is coming to an end.

The 20Y T-Bond ETF TLT weekly is still trading within a bullish price channel, keeping the positive trend intact in this ETF. However, a Double Top pattern formation from 2012 is not ruled out. Any bearish breakout from the channel below that 2012 level, would most likely confirm this.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System turned Short on the OEX weekly, after this trading week.

11/21 The wave 5 or e (now alternate count) from the October low is stretching out both in terms of time and price, so a bearish reversal confirmation in the NYSE Summation Index trend indicator was never seen in the period since the last update. The underlying technical condition of the market is still getting weaker though --> ( TRIN - A/D - New Highs - New Lows - Put/Call Ratio ) against the price advance to new all time highs this week.

Friday's gap higher and market close below another important trendline, could be a sign of exhaustion. An updated weekly Gann Angle chart, shows a RSI-2 now found well into it's overbought territory, although not yet at an extreme reading. There is still a chance this GA could have some cycle impact on the market, although from a time window angle, it's over due.

These technical points along with the Shooting Star reversal candlestick formed Friday, up against this resistance and on above average Volume, smells price weakness coming. So because of this, i'll look for the next bearish reversal in the NYSE Summation Index trend indicator, to confirm a top of minimum short term degree.

So far this indicator has catched most of the trend from the October low. The double bearish divergence is still there in it, despite the move to new highs this week, reflecting less and less stock participation. So this could mean the upcoming market reversal will be even sharper than the one observed in September, in line with an ending EW pattern of larger degree.

From a Murrey Math point of view, the S&P 500 reached the so called +1/8th MML resistance area (2062.5) at the end of the week, which T.H. Murrey views as an 'price overshoot' area, (above the major 8/8th MML) similar to when a persistent and parabolic price trend is making a false break of a major trendline, before finally stalling.

However, any clear break above the +2/8th MML (2125) would mean the longer term trend actually wants to continue even higher. So the market is getting near the crossroads of making a significant reversal or continuing on it's bullish path, long term.

The bellwhether stock GM daily reached the suggested 32.3 target zone this week, closing below trendline resistance Friday.

The 20Y T-Bond ETF TLT weekly is still trading within a bullish price channel, keeping the positive trend intact in this ETF.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Long on the OEX weekly, after this trading week.

11/07 Price weakness could be in store for the broad market, as the S&P 500 climbed to new highs and reached strong trendline resistance this week, with an overbought RSI-2 at the same time tracing out a bearish divergence. The candlestick formed Friday is of the reversal type and often seen at the ending point of trends.

In addition, the market has now entered the 11/07 (+/- 1 week) Gann Angle time window i wrote about in the previous comment. So odds favor a market reversal next week, with the first 38% Fib. support (1955 area) as a minimum downside target for the coming bearish short term trend.

VIX daily is about to test strong trendline support and if it holds, more Volatility (fear) and pressure on the stock market could be the outcome.

A double bearish divergence in the NYSE Summation Index trend indicator is developing vs. the second higher peak in prices, flashing a strong warning sign for the market. So the next bearish 3 EMA crossover would most likely confirm a short term top in place.

The FCX (Copper & Gold) stock is also sharply deteriorating in the face of the new market high, another technical indication of what is around the corner.

Compared to the parabolic price blow-off to new highs seen in some key indexes from the October low, the bellwhether stock GM daily gives a more down to earth alternate picture of what's likely brewing in the markets these days, as this stock is likely working on a modest 3 wave corrective move to the upside, probably a short breather as part of an ongoing bear phase from the late 2013 high. Here trendline resistance (around 32.3) is a high probability target zone for a resumption of the overall bearish trend.

The 20Y T-Bond ETF TLT weekly is still trading within a bullish price channel, only a bearish breakout from it would force a change in the positive view on this ETF.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Long on the OEX weekly, after this trading week.

10/31 First, monthly charts are updated.

The price rocket launched from the October low is probably a mix of Short covering and 'deep pocket' intervention (PPT), which is also indicated by the weak Volume seen throughout most of this parabolic advance. Only this Friday a decent Volume reading came in, on a strong up close for the day. Despite the overall price strength though and an intra-month whipsaw in monthly MACD, it remains in bearish mode after the close of the October trading month.

The even more conservative long term trendline break looked for, has yet to occur though. So from this point of view, the long term bullish trend is still intact, as most markets experienced an intra-month breakout but managed to recover and close for the month at this crucial support.

Long term Volatility VIX monthly, despite it's strong intra-month upside explosion, managed to calm down and once again close below important trendline resistance, avoiding a dangerous Volatility breakout on a closing basis, at least for now.

Momentum is getting overbought on the OEX daily and is tracing out a bearish momentum divergence on the OEX weekly chart. If the OEX is able to push through the September high, (900.4) trendline resistance (920 area) is then the next likely price target thereafter. As (price history shows) this long standing weekly trendline acts like a magnet on prices.

In addition, there is plenty of room left in the ongoing upside pressure phase in weekly Cycle10 before it's getting overbought. But the double RSI-25 bearish divergence now developing is a strong warning sign for the market, of what is coming sooner or later. In the S&P 500, another test (or even a brief break) of the earlier discussed L3 DGL (Dynamic Gann Level) is not ruled out, before possibly heading lower again.

From a Murrey Math point of view, the October low was an exact hit to the (yellow) 1/8th MML before the S&P 500 soared back above the stronger 4/8th MML resistance area.

The S&P 500 is just a point from taking out the September high, while the Dow daily is already in new all-time high territory. So because of this, the earlier preferred wave count has been revised to either a wave e or 5 now working it's way higher from the Oct. low. This last wave 5 is part of a five wave structured wave C (one degree higher) from the October 2012 low, which should come to an end soon.

If the current advance continues next week, one likely time target for the termination of this wave e or 5 advance is the upcoming weekly based 11/07 Gann Angle cycle convergence (given the usual leeway of +/- 1 week). The same goes for a consolidation phase holding up the market into this GA time frame. Both scenarios would point to a reversal in the opposite direction, once the time window is entered.

This is also supported by the weekly RSI-2, (shown on the same chart) which is about to enter overbought territory. This important GA marks 135 trading weeks from the May 2012 low, 144 TW from the March 2012 high and roughly 180 TW from the July 2011 peak. So it's a powerful cycle convergence which could have some impact on the market.

The 20Y T-Bond ETF TLT weekly July 2012 high take-out i wrote about in the last comment seems to be wrong because of a data error. Thanks to the helpful subscriber alerting me about it. From now on, i recommend comparing the chart data used in these updates with other independent data feeds, in case of more data errors, as i can't edit these errors myself, since it's a 3rd party provider. Anyway, using closing prices TLT still trades within a bullish price channel, currently pulling back towards channel support, which comes in at around 117 for the next trading week. Let's see what happens there, in terms of price action.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is Long on the OEX weekly.

10/17 The sharp price weakness from the September high forced the S&P 500 below it's 200 day moving average this week, with prices now making a snap-back move towards it. This MA area should now instead act as resistance (1905) and RSI-2 should be more or less overbought at that price level. When a moving average is broken, it's common to see price pulling back to it, before resuming in the new trend direction. In case this resisance zone is ignored, the next likely near term target could be the new established trendline which comes in around 1930-35, depending on when it's reached. This would also be near the key Fib. retracement zone.

Volatility (fear) exploded this week, reaching the 31 level at it's high for the week. The VIX is currently resting at trendline support coming in from Oct. 2013.

As for an update on the Elliott Wave situation, the sell-off from the September high started with a series of 1-2's (Alt: Leading Diagonal pattern) lower, before a sharp wave 3 Impulse forced prices below the 200 moving average, a price area closely watched by institutional investors, which may trigger more selling. Wednesday's bullish Pin bar and heavy Volume reading, indicated a positive reversal coming. Although not always perfect, Pin bars or Hammer candlesticks are one of the most reliable price patterns to use in trading, especially when they show up at strong Resistance/Support levels, along with Volume spikes.

The current price bounce could be a wave iv or even wave 4 (one degree higher) probably going for the MA target suggested above. But this corrective move higher should not overlap the wave i or 1 low, to remain a valid iv or 4 count. So this means we could see a test of the mid week low sooner or later, in the last wave 5 lower. If the test or a slightly lower low comes with bullish divergences showing up in momentum indicators, it would increase the odds of the wave 5 scenario and a positive market reversal coming, after this five structure from the September high has come to an end.

An interesting observation is how well the NYSE Summation Index trend indicator has so far catched most of the sell-off since it turned bearish on September 08 and still is, at roughly 100 points lower. Despite the price noise & spikes later in September, it held on to it's bearish mode, firmly showing the true trend. So it's amazing how putting a 3 EMA on this well known breadth indicator can make a difference in trend analysis.

In retrospect, the September market top was also warned by bearish divergences in the BKX (Bank Index) and the FCX (Copper & Gold) as well, vs. the S&P 500 higher peak.

The 20Y T-Bond ETF TLT weekly soared intra-week, taking out the July 2012 important high. This as a result of likely safe haven positioning from spooked stock market investors. But still, the etf pulled strongly back and was not able to close above weekly trendline resistance. The bearish Pin bar which formed on heavy Volume, indicates some weakness coming, possibly towards trendline support.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is Short on the OEX weekly.

10/03 It took 2 years and 7 months before the monthly MACD turned bearish on the stock market. Whether it will be a whiplash signal or a real one, only time can tell for sure. Around major tops this can sometime happen if the new trend structure makes a deep retracement or if a modest higher high is experienced, briefly bringing the MACD back to bullish mode before taking a more firm path in the bearish direction again.

In addition to monthly momentum heading south from it's overbought territory, when a monthly MACD sell signal shows up when prices have touched the upper part of the giant Megaphone patterns observed in i.e. the Dow monthly chart, it's a strong warning signal for the market.

Especially since this long term sell signal occurred after the S&P 500 market also reached the earlier discussed key long term L3 DGL (Dynamic Gann Level) area in the September trading month and in addition, it formed a bearish Inverted Hammer candlestick up against this major resistance area.

All this and the seasonal factor, with the entry into a statistically weak October, smells trouble for the stock market. Personally, i opened long term positions in a few leveraged Bear ETFs when i saw prices facing the major resistance zones earlier this year.

Ideally we should have seen a heavy monthly Volume reading at the same time as the monthly Hammer candlestick showed up, which would be even stronger evidence of distribution and a major top in the making. But because the artificial advance from the March 2009 low was mostly Fed & QE fueled, a major top still can't be ruled out, even without this important Volume spike ingredient.

Anyway, an even more conservative and safe sell signal would be a clear break of long term trendline support (monthly closing basis) which has yet to occur. So it will be interesting to see the market development in the next few months. VIX monthly once again closed up against important trendline resistance, any breakout could lead to a long term Volatility (fear) explosion.

W.D. Gann discovered that the stock market tend to advance for 5 years and then decline for 2 years, before starting a new 5-2 cycle. The next 2 year bearish phase is overdue now in late 2014. In fact, historically it's very rare to see a Bull phase lasting well over 5 years, without experiencing any significant correction. So the time has most likely come.

Also from a Murrey Math point of view this could turn out to be true, once again proving that overcoming a major 8/8th MML (Murrey Math Line) is not an easy task, at least on the first attempt.

Mid term, weekly momentum is still firmly in bearish mode, at mid readings, despite the strong recovery at the end of the week, resulting in a weekly Pin reversal bar formation at trendline support, as seen on this OEX Weekly chart.

But a look at the S&P 500 daily chart shows that the market has to first overcome minor trendline resistance on a daily closing basis, to put an end to the ongoing short term bearish trend from the September high. If so, the next likely upside target would be the key Fib. resistance area at 1982, the RSI-2 should be more or less overbought at that level.

If this resistance is ignored, then a deeper retracement could come and put pressure on the currently preferred wave 2 scenario, which would reach it's negation point above the September high. A wave 2 would typically retrace to the 50 - 62% Fib. zone, any deeper than that would question the wave labeling although still a valid one, until the Sept. high is taken out.

Real Estate
As for an update on other markets, the Real Estate market, using the Dow Jones REIT Index as a proxy, seems to break out from a long term positive trend, after it first touched major trendline resistance at the Sept. high. One more lower monthly close would bring more evidence of this. Actually, the Real Estate market should fall along with the stock market and other markets in the coming years, (deflationary pressure) with opportunities to buy a house at a far better price, likely showing up within years from now, in my opinion. Once a clear breakout is seen, i'll calculate likely long term Fib. targets.

OIL
The same goes for Oil, Light Crude monthly prices are falling through long standing Triangle support but needs to clear one more alternate Triangle line, to clear the horizon for lower oil prices, which should be good news for the consumer, looking for an end to a long period of expensive gas, heating and other oil related prices.

A major 2008 - 2014 Double Top pattern could be in place in the XOI - Oil Index, the June Hammer formed up against the 2008 high warned about what was coming. The Sept. close near it's low indicates a test of the next trendline support (1500 area) in October. To find support there is crucial for this market, to avoid more serious weakness.

Gold
Any downside breakout (monthly closing basis) from the Triangle pattern in October, could open for even lower prices in Gold, with the $1000 area as a likely wave 5 target. This is a strong support area produced by the peaks made in 2007, 2008 and 2009. This price zone also happens to mark the key 62% Fib. retracement level, using the 2004 & 2005 consolidation lows as the starting point for the Fib. calculation. In case Triangle support holds, more price oscillations within the Triangle could be the outcome.

In the XAU - Gold & Silver Index the monthly close near it's low, below a now broken trendline from the 2000 low, indicates more weakness coming in this market as well. Any break of the 2013 low would indicate further weakness towards the 2008 63.5 low.

The GDXJ - Junior Gold Miners is also going for a test of the 2013 28.8 lows, within a week or two. A takeout would indicate more weakness, with the old bearish channel as the next likely price target thereafter.

Bonds
Long term, the Bond market is still in a firm uptrend and probably targeting the 2012 major high before likely forming the next larger top, (Double Top pattern) as RSI-25 should be overbought at that point.

Yield
The TYX - 30y T-Bond Yield reacted up from key Fib. support in September, but it needs to overcome the trendline resistance challenge on a closing basis, to make a further advance possible. Until then the overall trend is still bearish for the TYX.

US Dollar
Apparently investors around the world sees the Buck as a safe haven these days and is soaring as a result (wave 3 Impulse). It even managed to close above major trendline resistance in September. The close near the high indicates more to come to the upside in October. A likely target in the coming months is the 2004 & 2005 highs, a strong resistance area up around 92.5.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Long on the OEX weekly, after this trading week.

09/19 Either a five wave or double zig-zag pattern from the August low probably reached it's termination point Friday. This view is backed up by the reversal bar formed Friday (up against resistance) and the above average Volume reading observed in the same trading session. In addition there is a bearish RSI-2 divergence vs. the new high in prices.

So this could be a near term, high probability trading opportunity on the Short side now showing up, signaled by a break of the reversal bar low. Minimum downside target would then be trendline support down around 1995. Any break of it (closing basis) could open up for more weakness, towards Fib. support.

Bearish divergences are all over the place these days, to come up with a few, the NYSE Summation Index trend indicator is holding on to it's bearish mode, despite the move to new highs Friday. This indicator tend to show the true trend.

The 21 EMA of the McClellan oscillator is also still bearish in the face of this advance to new highs.

The 10 EMA of the daily Advance - Decline Line is also deteriorating vs. new highs.

Also the Elliott Wave situation suggests weakness coming, with either a wave e from February now topping or a less bearish alternate scenario, a wave b as part of an a-b-c wave d (one degree higher) correction from the July high coming to an end. So in this case, the last wave c of d to the downside is about to begin.

It could very well be the larger wave e from Feb. ending these days, as we have a confirmed Hindenburg Omen after Friday's close, which often alerts about stronger price weakness coming. In addition, the seasonal negative September - October aspect can't be ignored as well.

With that in mind, after calculating the next weekly based Gann Angle cycle, it seems that the week ending 11/07 (+/- 1 week) is an important time window to look for a top or bottom in the market, as it's a powerful cycle convergence marking 135 trading weeks from the May 2012 low, 144 TW from the March 2012 high and 180 TW from the July 2011 tops. The directional trend (i.e. bearish) going into this GA would indicate a reversal in the opposite direction.

The 20Y T-Bond ETF TLT weekly found support on the trendline, this week forming a bullish reversal bar, indicating higher prices ahead.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Long on the OEX weekly, after this trading week.

08/29 To U.S. readers, in advance, my best wishes for the Labor Day celebration.

Long term, another trading month has just ended and the S&P 500 was able to close for the month a few points above the major Murrey Math 2000 resistance mentioned in the previous STU comment but has yet to reach the key monthly L3 DGL (Dynamic Gann Level) also discussed in earlier comments. For September, this DGL resistance area is up around 2050-60, a likely target before the long term positive market trend could stall. As seen on the same chart, long term overbought momentum is holding on to its bearish mode, despite the move to new all time highs in August, tracing out a bearish divergence.

The positive market month also kept the OEX monthly MACD bullish mode from Feb. 2012 intact. The Nasdaq is getting closer to its 2000 major top, so the tech market could in fact form a giant 2000 - 2014 Double Top pattern soon, later this year or sometime in the first half of 2015 at the latest. Once completed, Double Top patterns in general can be very bearish in nature.

This view on the tech and other markets is supported by the now long term overbought RSI-25. With price history as proof, when this indicator climbs into overbought territory, its often a warning about long term tops in the making. At the 2007 major market top, it even failed to reach its overbought zone. The power of this indicator is in the special setting, which helps weed out false tops and tend to alert about the bigger ones.

The 30-Y T-Bond Yield (TYX) fell through its trendline support in August and is now resting on key Fib. support. So let's see what comes out of the Sept. trading month, a reversal bar forming here would indicate higher Yields ahead. If this support fails to hold (monthly closing basis) the TYX could go for a test of the 2012 low.

The spot Gold monthly market is probably working on the late stages of a wave 4 complex Triangle, which could lead to a downside breakout sooner or later, in wave 5 which could take prices down for a test of the 2008 & 2009 highs, (1000 area) which now acts as strong support instead.

As seen in some other markets, a major long term Double Top forming in the Oil Index (XOI) as well, can't be ruled out. This bearish outlook is supported by the bearish divergence observed in the RSI-25 indicator. Although not so good for oil companies, the consumer should then benefit through i.e. lower gasoline and heating oil prices in the future. I dare to state that if this is a Cycle degree wave B top forming in Oil, even the 2003 XOI low could be under attack at some point in future, as a result from the damage a wave C of this degree can do on the markets.

Short & Mid term, the OEX weekly Cycle10's ongoing upside cycle pressure phase, shows there is some more room to the upside, before the market is getting overbought but a temporary pull-back could start any day now.

Using the EWP the wave 2 possibility shared in the previous comment is now excluded from the list of valid counts, as a wave 2 can't retrace more than 100% of wave 1 to remain valid. With the S&P 500 move beyond the July high in August, a wave 2 is now ruled out.

So instead, either a wave c from the February low is coming to an end soon. Or a wave b is topping, as part of a corrective a-b-c structure from the July high, which should complete wave d (one degree higher) later this Fall, before the last wave e takes over, which should once again take prices to new highs, to complete the cycle degree trend from the March 2009 low.

A third scenario could be an already ended wave d at the August low, with the last wave e now underway. So only time can tell for sure the real outcome of this complex price pattern.

The 20Y T-Bond ETF TLT weekly is pushing higher, firmly closing above the trendline resistance challenge this week. If it's able to climb above the Fall 2012 high as well, then it could go all the way up for a test of the Summer 2012 high, before finally stalling.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System turned Long on the OEX weekly, after this trading week.

08/15
Monthly charts are updated.

A post vacation look at the stock market shows that either wave e or c completed at the July high and only around 10 points from the earlier suggested 2000 target. In Murrey Math Theory the 2000 number represents the strongest resistance line, the major 8/8th MML, so this will be a fairly tough area to overcome for the S&P 500, as shown on this long term Murrey Math chart

After the July high, the first ripple wave 1 as part of a new larger degree bearish trend finished at the early August low and currently, a wave 2 or a is likely forming a top up against the earlier broken trendline, on above average Volume, indicating institutional selling Friday. This near term bearish stance is also supported by overbought RSI-2 readings.

The alternate scenario is a wave c termination at the July high, with the wave a and b part of a 5-3-5 zigzag d coming to an end these days, with the last wave c taking prices lower once again, towards the key Fib. support area or even towards the 200 moving average, in the coming week(s).

As better seen on the OEX weekly chart the overall wave c from Oct. 2011 has yet to reach it's termination point, as the last wave e up has not yet started. Not yet oversold Momentum still holds on to it's bearish mode, despite the move up from the Aug. low, which gives support to the view that there is more to come to the downside, mid term.

This alternate scenario has less bearish concequences, with the last wave e likely taking prices to new all time highs (at or above 2000) towards the earlier discussed monthly L3 DGL.

In the Dow this could lead to another test of the upper trendline of the giant Megaphone pattern likely completing this Fall, in case this alternate view turns out to be the correct one.

The 20Y T-Bond ETF TLT weekly managed to overcome the earlier mentioned trendline and key Fib. resistance area but has now reached another trendline resistance challenge. Any reversal bars forming up against it, would signal a pullback coming.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System turned Short 08/01 on the OEX weekly, so the 2 recent closed trades have been profitable.

06/27 First, some macroeconomic facts: The U.S. GDP contracted by 2.9% in Q1. If Q2 GDP also ends on the negative side, the economy would officially be in a recession. The greatest debt bubble of all time expanded to $60 trillion of total debt in June. The net worth of the median household was 43% lower in 2013 than it was in 2008.

total debt chart

As for an update on the short & mid term S&P 500 market, a wave c from mid May possibly ended at the 06/24 high, better seen on this hourly chart. The market has since then developed in what could be a wave i-ii pattern lower. So as long as the recent high stays intact, a wave iii could force prices lower soon.

Any break of the recent high next week, would instead signal a further delay of the wave c top into mid July, indicating it has turned into a complex a-b-c-d-e pattern, as labeled on this Alternate Count hourly chart.

Since the market has been more or less in a consolidation phase in the last 2 weeks, the above average Volume spikes observed within this period, could mean distribution is going on, which could lead to market weakness, sooner or later.

Long term, the market is now roughly 40 points from reaching it's L3 DGL monthly 2000 target area, mentioned in the 05/30 update. See what happened in the Summer 2011 when the L2 line was reached. Market weakness could happen again when/if the major key L3 line is reached.

In that 05/30 update i also said: ...'In case this L3 is not reached in June, this major resistance could come in even higher for July, August etc., because of the angle of this L3 line.'...

Speaking of the long term, monthly charts found on the oextradingresources.com/stu-charts.html page should be updated 07/02, after the June trading month has ended.

OEX weekly momentum and weekly Cycle10 are still holding on to their fresh bearish modes, after this trading week.

The 20Y T-Bond ETF TLT weekly once again closed up against trendline resistance. This market is vulnerable to fall back for support, as long as it trades below this stiff resistance area. Any clear weekly close above it and the key Fib. resistance would be bullish for the Bond market.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Long on the OEX weekly.

My best wishes for the Summer Holidays!

06/13 As this S&P 500 hourly chart shows, an a-b-c pattern from the April low possibly ended at the early week high and with it... likely completed the (one degreee higher) a-b-c pattern from the February low. This in turn, could mean the overall wave e or c (alternate count) pattern from the same low has reached it's termination point, indicating mid term weakness ahead, caused by either a wave 1 or d now working it's way lower.

Because of the now bearish OEX weekly momentum and the weekly Cycle10 just started a cycle pressure phase to the downside, weekly trendlines could be tested next week, starting with first support coming in around 850.

If it holds, then a final push higher in a still active wave c from the April low is not ruled out. If it fails to hold (weekly closing basis) the odds of a wave c top already in place would increase and the 820 area is the next support level looked for.

Volatility (fear) is increasing, after it tested and slightly breached the 2013 VIX daily low a week ago.

The NYSE Summation Index trend indicator turned bearish this week.

The 20Y T-Bond ETF TLT weekly closed up against the trendline it broke below in the previous week. So it would take one more higher close to indicate the overall positive trend from the late 2013 low is still intact. If not, this could be a snap-back move towards a broken trendline, before resuming it's new bearish trend.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Long on the OEX weekly.

05/30 The University of Michigan's Consumer Sentiment reading tumbled in May, falling to 81.9, down from 84.1 the month before. The cause was Consumers worries about dismal prospects for wage growth, which for nearly half of all households meant anticipated declines in inflation adjusted incomes and living standards during the year ahead.

With the May trading month just ended, a look at the S&P 100 monthly chart shows an all time high in prices and a positive close up against long term trendline resistance, keeping the bullish MACD mode from February 2012 intact. The close near the high for the month portend some more to come to the upside in June, at least intra-month.

Overall, a likely target this Summer or the Fall at the latest, is the key L3 DGL monthly line, a major resistance area, which for the June trading month comes in up around the 1990 - 2000 area for the S&P 500 market. In case this L3 is not reached in June, this major resistance could come in even higher for July, August etc., because of the angle of this L3 line.

The Dow monthly market is getting very close to the Apex of the 2 converging major trendlines, so one of them has to break in the Summer - Fall time window. Because of the over 5 year old Bull trend from the March 2009 low and the long term overbought state of the broad market, the breakout is most likely coming the downside. The VIX monthly (Volatility) once again found support on the long term Wedge support.

Mid term, the OEX weekly broke through minor trendline resistance this week, opening up for even higher prices, possibly towards the larger Wedge line, drawn on the same chart.

I've calculated a new weekly Gann Angle cycle convergence, with the week ending 06/27 marking 90 trading weeks from the November 2012 low, 180 TW from the February 2011 high and 270 TW since the June 2009 high. These are all powerful GA numbers, so the directional trend going into that 06/27 GA (+/- 1 week leeway) could force a trend change in the opposite direction, of minimum short term degree. The earlier posted 05/09 GA apparently didn't have any impact.

Short term, prices reached the upper Triangle line resistance Friday, on increased Volume readings. This along with a modest Hammer close higher, could mean sellers came to the market Friday. This setup along with an overbought extreme in RSI-2 and VIX daily hovering near support, portend a pullback is due.

The short term Elliott Wave count has been revised, an a-b-c pattern from the April low is soon completing if not already completed, better seen on this S&P 500 hourly chart. This in turn, should terminate the one degree higher wave c from the same low. If so, then a one degree higher wave e or c from the February low could also come to an end.

Anyway, regardless of what turns out to be the correct finer wave count, the giant Cycle degree B corrective structure from March 2009 could come to an end this Summer or Fall, which will be confirmed by any break below major trendlines (monthly closing basis) and the next monthly MACD bearish mode.

The 20Y T-Bond ETF TLT weekly came close to the key Fib. level at the high for the week, before sellers came in forcing prices lower and closed up against the trendline as a result. This is a bearish setup, which would be confirmed by any weekly close below trendline support.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is Long on the OEX weekly.

05/23 A complex Leading Triangle wave 1 and also a wave 2 lower resulted in a choppy, tight market environment in April - May. But the market could wake up from this sleepy state soon, as Volatility - VIX daily is soon reaching the 2013 low, which is also not far from the late 2006 low, where a multi-year volatility explosion started.

So there is still some more price room to the upside, possibly towards the major 62% key L3 DGL before a major top could be forming.

Another technical observation which indicates the 2014 positive market trend is maturing, is a strong bearish divergence now developing in the daily 18 MA of the Advance/Decline Line vs. the fresh new high in prices, a typical pattern seen before larger tops in the market, reflecting less and less stocks are participating in this move higher.

In the very near term, RSI-2 is getting overbought and prices have climbed higher on weak Volume, so a pull-back from the minor trendline resistance is a likely scenario, in the first half of the next trading week.

Mid term, weekly momentum has once again climbed into overbought territory. The OEX weekly Cycle10 is also about to reach levels where it normally would make a bearish reversal with RSI-25 at the same time tracing out a strong bearish divergence.

The 20Y T-Bond ETF TLT weekly made a retreat from trendline resistance this week but is still in an overall positive trend from late 2013. Any weekly close below trendline support would change this view.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System turned Long on the OEX weekly 05/16.

05/02 As this S&P 500 hourly chart shows, the advance so far from the April low could be the first two waves of a five wave Impulse c structure, as part of either a wave e or c (one degree higher) underway from the February low, probably targeting the major 62% key L3 DGL as mentioned in previous updates.

Any market, in any time frame, wants to reach these key L3 lines 60-70% of the time, before making a reversal. If this happens in this case, it could also complete a giant Megaphone pattern, as observed i.e. on this Dow Monthly chart.

If this short term wave count is going to work out correctly then new highs must be in store for this market soon, from the wave iii push, which should start once a pull-back phase has completed, as daily momentum is about to turn bearish in it's overbought territory. But any weakness going below the wave ii low would delay this scenario. And if the April low has to give in, then this wave c possibility from the April low is excluded from the list of valid counts at that point.

Volatility - VIX daily is likely reaching trendline support in the first half of the coming week. If it turns out to hold, a Volatility bounce from this area should put pressure on the stock market, short term.

Mid term, weekly momentum turned bullish after this positive trading week and has yet to reach an overbought condition.

The next Gann Angle cycle convergence is due next week 05/09, +/- 1 week. It marks 90 trading weeks from the Sept. 2012 top and 135 TW from the Oct. 2011 top. Since the overall trend going into this time window is positive, this GA could mark a top in the market. This is also suggested by weekly RSI-2 readings soon reaching levels where a bearish reversal is looked for.

The Gold ETF GLD Weekly formed a Hammer (reversal) candlestick near key Fib. support, indicating a move towards trendline resistance, up around the 130 level.

The 20Y T-Bond ETF TLT weekly positive trend reached the 50% retracement area this week. A pull-back is looked for once the trendline or 62% key Fib. level is reached.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System turned Short on the OEX weekly.

04/11 The S&P 500 market attempted to break above the earlier discussed triangle pattern in early April but the below average Volume indicated a false breakout with prices instead collapsing below this triangle area, forcing a revision on the wave count. So the February - April advance is now labeled wave a and the current weakness as wave b of an overall a-b-c structure higher, which sooner or later should complete the one degree higher wave e.

The alternate view is an already fully completed wave e from the Feb. low. If this turns out to be the case, the OEX Weekly trendline support currently under attack, should give in to the bearish forces, sooner or later.

However, the market could be near a bottom short term, as Put & Call Ratio readings are soon entering it's oversold area, Volatility - VIX daily is facing stiff trendline resistance and RSI-2 is soon reaching an oversold extreme. With any RSI-2 dip below 10, there is an over 70% chance the market will close above it's 5 EMA within 1 week.

Possible support levels are drawn on the DGL chart and the S&P 500 daily chart, with i.e. the 62% key Fib. support (1800) found at important trendline support, suggest a rebound move could start from this strong support convergence, next week. Any Hammer or other reversal type of candlesticks forming there, on above average Volume, would increase the odds of a reversal coming in the market.

The bellwether stock GM daily fell below it's March pivot low this week, on above average Volume, reflecting institutional selling likely involved. RSI-25 is getting oversold with some price support coming in right below the 31 level, time will tell if it's strong enough to cause a short term reversal in this stock.

A peek into the weekly timeframe shows a close for the week slightly below important trendline support, with momentum yet to reach an oversold condition. One more lower close would make the break more clear but another (minor) trendline comes in around the 800 level which also needs to be cleared first, to claim a possible change in the mid term trend. If this occurs, evidence would be stronger of a Double Top formation from the late 2013 consolidation.

The bearish Pin bar formed a few weeks ago warned about the current price weakness. Weekly Cycle10 has just started on a downside cycle pressure phase with still plenty of downside room in the RSI-25 indicator, before it's gettting oversold, mid term.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The 20Y T-Bond ETF TLT weekly closed above the Fib. area discussed in the previous update, signaling even higher Bond prices ahead. If it's able to break through the high made 2 weeks ago, then the next likely target is the 50% retracement area, up around 113 or more likely... trendline resistance up at 114.

The Neural Net System is still long Long on the OEX weekly.

03/28 The currently preferred wave scenario is that the S&P 500 is probably working on a wave b Triangle pattern, as part of a one degree higher wave e or c structure from the February low. Because of the triangle possibility, more sideways price development is not ruled out, oscillating within a gradual tighter range, before finally breaking out from this triangle to the upside, in wave c of e (or c), possibly targeting the earlier mentioned long term L3 DGL before a major top could be in place.

Any clear break (daily closing basis) above this triangle pattern, on above average Volume readings would be a strong Buy signal, as it would indicate Market Makers participation. The wave development in the bellwether stock GM daily supports the view of a positive stock market breakout soon, as a wave c to the upside is the next likely event for this stock.

Despite the choppy market observed in recent weeks, the daily NYSE Summation Index trend indicator still holds on to it's bearish mode.

Short term Volatility - VIX daily is near strong triangle line support. The directional breakout from this triangle could set the tone for the market for some time. So a downside breakout (lower fear) would be positive for the stock market and vice versa.

The OEX Weekly formed an Inside Week on still bearish momentum. Inside Weeks reflects indecision among investors. It occurs when the trading for the week comes within the range of the previous week. Directional breakouts from this indecision patterns often shows where the market wants to go next. So mid term, waiting for the market to sort out this.

Weekly Cycle10 is still in an upside cycle pressure phase but is soon reaching levels where it would normally make a bearish reversal, with RSI-25 at the same time tracing out a bearish divergence.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The 20Y T-Bond ETF TLT weekly tested first Fib. resistance this week but failed to close above it. The earlier trendline resistance should now act as support instead. Any weekly close above the 38% Fib. area, could open up for an even higher Bond market.

The Neural Net System turned Long on the OEX weekly.

03/14
The S&P 500 broke out from the minor bullish channel late in the week, indicating either an Impulse structure now developing to the downside or the wave b part of a still active wave e (one degree higher) from the February low.

If the first Impulse ripples of a giant (Cycle degree) wave C are underway to the downside, then we can say goodbye to the March high, it's probably not seen again for a long time. However, this scenario is not supported by Volume analysis.

If this turns out to be the wave b of e, on the other hand, then a push to new highs (wave c) should be the outcome, sooner or later. In this scenario, i'm looking for a final advance towards the earlier discussed long term L3 DGL (Dynamic Gann Level) up in the 1950 - 2000 area, it depends on when it's reached.

Prices are currently resting at minor trendline support, with RSI-2 at the same time found in oversold territory. So in the very near term, a reaction to the upside could be the first event to look for in the new trading week. But it depends on how the markets reacts to the Ukraine referendum held this weekend. The U.S. and other countries could answer with sanctions soon, igniting market worries, resulting in stock market selling pressure.

If the market reaction turns out to be negative Monday, first Fib. support is around 1828. The next lower support is 50% retracement at 1811, which is just a few points above line support.

If minor trendline resistance (1868 area) fails to hold because of a positive market reaction, it could mean a wave c is pushing higher, confirmed by a break of the March 07 high (1883.57).

On the S&P 100 weekly chart momentum entered bearish mode after this trading week, with a natural, minimum target being trendline support around 800. Given the momentum bearish divergence vs. the Double Top in prices, it's viewed as a stronger sell signal, mid term.

The same goes for the weekly Cycle10 chart, with Cycle10 rolling over and RSI-25 tracing out a bearish divergence also here.

A leading indicator for the stock market, the bellwether stock GM (General Motors) appears to be in the last stages of a bearish Impulse pattern from the Dec. 2013 high. Starting out like this, in five waves to the downside, often means a major top is in place. More evidence would show up if a coming three wave pattern is completing below the Dec. 2013 high, not ruling out a Head & Shoulders pattern formation in this stock.

The Junior Gold Miners index (GDXJ) is breaking out from a long standing bearish channel on good Volume, indicating a new Bull market is underway, especially if the Fall 2013 Pivot high at 54.56 is taken out first.

The 20Y T-Bond ETF TLT weekly is making it's third attempt to break through trendline resistance. Any break of the recent Pivot highs would signal success in this and a test of the first Fib. resistance could be the outcome thereafter. Given the situation in the stock market, Bonds could be in a base pattern, possibly fueling up for a new Bull market phase. Any further stock market weakness would fit with a flight to safety, into Bonds and Gold.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is Long on the OEX weekly.

02/28 The move to S&P 500 new highs this week, forced a revision on the wave labeling. With the earlier wave 2 scenario now excluded from the list of valid counts, a possible final wave e pattern underway from the Feb. low, has been moved to the forefront. It could be the full wave e pattern that completed at Friday's high or only the sub-wave a of this one degree higher e structure ended then.

An alternate count is a fully completed Impulse structure from the Feb. low, where the wave 5 part from the Feb. 13 low, took the form of an Ending Diagonal pattern.

According to the Elliott Wave Principle ..."An Ending Diagonal is a special type of wave that occurs primarily in the fifth wave position at times when the preceding move has gone too far too fast, as Elliott put it"...

Here is how this alternate count has been labeled on the S&P 500 hourly chart.

Long term, as mentioned in an earlier update, any move to new highs, could mean the market wants to go for a test of the key monthly L3 DGL resistance, before a major top could be in place.

The Feb. monthly close near it's high and into new high territory, increases the odds of this outcome. So if the wave e has yet to come to an end, it could take prices up to this zone. Despite the positive monthly close though, long term momentum is still holding on to it's bearish mode.

With tension building up in Eastern Europe, could this fit with a Cycle degree wave B top this Spring? Only time can tell for sure... In line with what one should expect from a sharp wave C of this huge degree likely starting soon, a potential conflict between the super powers in the future, could put big pressure on the global stock markets and other financial markets, in the coming years.

Anyway, regardless of the wave count at this point, a near term pull-back is likely in store for the market next week, given the overbought RSI-2 readings. A short term bearish divergence is also observed in the Dow Transport market, compared to the S&P 500 daily chart.

As for Volatility, any break below the VIX daily pivot low made a few weeks ago, would indicate a test of trendline support (12 area) thereafter.

The weekly chart shows a close up against minor trendline resistance, with momentum at the same time entering it's overbought territory. The weekly Cycle10 is still in an upside cycle pressure phase but is about to enter it's sell zone (above 70). RSI-25 is tracing out a bearish divergence pattern, reflecting underlying weakness in this advance from the Feb. low.

The 20Y T-Bond ETF TLT weekly market recovered this week, breaking through trendline resistance. A test of the first Fib. resistance is the next likely event to look for in this market.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is Short on the OEX weekly.

02/14 As of Friday's close, the S&P 500 is 12.2 points from having retraced 100% of wave 1, so any move beyond the Jan. 15 high at 1,850.84 next week, will exclude the wave 2 scenario from the list of valid counts and instead move a final wave e possibility to the forefront.

The resistance line comes in at 1848, (820 for the OEX) so if prices stops there, technically a wave 2 still can't be ruled out at that point, although it's now less likely that it can be a wave 2 because of it's deep retracement and also because of the Nasdaq Comp move to new highs this week, making an inter-market divergence. Volume readings during the January sell-off were heavier than during the February recovery, a bearish sign.

I have used the S&P 500 hourly chart to label the finer degree wave development, with the a-b part of the earlier suggested a-b-c zig-zag structure completed and with the wave c now underway.

Volatility, VIX daily is soon reaching support, right below the 12 level.

The weekly chart shows a close near it's high for the week, indicating more to come to the upside, next week. This is also supported by the ongoing upside cycle pressure phase in the weekly Cycle10 indicator.

The Gold markets in general is taking off, i.e. the Gold etf GLD Weekly made a clear close above a long standing trendline this week, which could open up for even higher prices. First Fib. resistance is up at 141.

The Junior Gold Miners index closed up against important channel resistance this week. Any weekly close above it on strong Volume, would be mid & long term positive for this market as well.

The Gold & Silver market is also doing well, the XAU has so far already fulfilled a 1:2 Risk/Reward trade scenario from the Pin bar setup area, mentioned in the Outlook 2014 Report.

The 20Y T-Bond ETF TLT weekly pulled back intra-week but it's recovery and close near the high, could mean it's reversing and heading higher next week, possibly another attempt to break through the resistance line (108.5 area) it struggled with a few weeks ago.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System turned Long on the OEX weekly, after this trading week.

02/07 As seen on this S&P 500 hourly chart, a text book looking five wave impulse structure (Minor degree wave 1) ended at the 50% retracement support area, which also happens to represent the L2 DGL (Dynamic Gann Level) support zone.

A wave a rebound, as part of of a possible a-b-c zig-zag (wave 2) pattern to the upside, has so far brought prices right above the 50% retracement resistance area. The rebound Volume was weaker compared to the sell-off phase, reflecting a lack of institutional participation in this move higher. A wave a termination around the key 62% Fib. retracement zone (1807) is likely next week.

The lack of Volume supports the view that only a countertrend advance is underway, which is allowed to retrace 100% of wave 1 and still keep the currently preferred wave count intact. Any break of the January high would negate this possibility and instead move the alternate count, a final wave e scenario to the forefront at that point.

So the outcome of the next trading week or two will be quite interesting to watch. For short & mid term traders, this ongoing wave 2 rebound offers a second opportunity for a decent (lower risk) position entry on the Short side, before a sharp wave 3 to the downside could start.

In case this wave count turns out to be correct, the upcoming Minor degree wave 3 should lead to a breakout from the wedge & channel patterns seen on the monthly charts and also cause the next monthly MACD bearish mode.

Volatility, VIX daily reversed from the resistance area discussed in the previous update. First support comes in at around 14.4.

The weekly chart shows a bullish Pin bar formation at trendline support, with momentum at the same time getting oversold, indicating higher prices ahead. This is also supported by a new upside pressure phase starting in the weekly Cycle10 indicator.

The 20Y T-Bond ETF TLT weekly penetrated the resistance line mentioned in the previous update but was not able to close above it, forming a bearish Pin bar up against it, indicating lower Bond prices and higher Yields coming.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Short on the OEX weekly, after this trading week.

01/31 A follow up comment to last week's bearish market development. The S&P 500 reached the daily support area discussed in the previous update. It could be a five wave Impulse structure in it's last stages. The consolidation seen at this support in recent days, is probably the formation of the wave iv part of a (one degree higher) wave 1 underway from the January high.

If so, we could see one more move lower next week, (i.e. 50% retracement zone is around 1750) caused by the wave v, before likely heading higher in wave 2 thereafter. Wave two's in general are often of the a-b-c zig-zag type, according to the Elliott Wave Principle.

A typical target for wave two's is the 50% or 62% Fib. retracement area, as shown on the chart. This calculation is based on the recent low, so in case wave v breaks it next week, this target zone has to be lowered.

The start of the wave (2) next week is also supported by weekly Cycle10 about to enter an upside cycle pressure phase and a still intact weekly trendline, after being tested this week.

In addition, the above average Volume spike along with the intra-week price recovery, could mean buyers came to the market.

In my opinion, this wave 2 would be a second opportunity to enter Short positions at a better price, before they could plunge in wave 3 thereafter. According to the EWP, wave 3's and C's are always the strongest and most violent, regardless of the time frame and also gives the best returns relative to time.

The challenge, of course, is to identify them correctly. In case i'm wrong about this wave scenario, a mental Stop is placed right above the January high, the negation point for the wave 2 possibility.

Overall, since the decline from the January high looks impulsive in nature and the momentum in it was strong, odds are good that a larger top could be in place. If so, it's just a question of time before a confirmation could show up, by a long term monthly MACD turning bearish soon. Or even more conservative, as a breakout (monthly closing basis) from the bullish channel, seen on the same chart.

Volatility, using the VIX daily as a proxy, is facing stiff resistance up around the 20 level. This level could mark the next near term bottom in the market, most likely occurring this coming week.

The 20Y T-Bond ETF TLT weekly pushed even higher this week, probably fueled by investors leaving the stock market. It currently has a trendline resistance challenge to overcome, before it can climb even higher, towards the 38% Fib. resistance.

Updated 01/31, monthly charts

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System is still Short on the OEX weekly, after this trading week.

01/24, 2014 The S&P 500 broke out from the daily Rising Wedge pattern at the end of this week. Friday's close came on above average, heavy Volume, reflecting institutional sellers likely involved. It was the worst week in this market since June 2012.

With RSI-2 reaching an oversold extreme and prices probably going for the first Fib. and trendline support (1772 area) or the L1 DGL support, chances are good that it will make a near term bounce from this support and possibly make a snap-back move towards the broken trendline. Especially so if a reversal candlestick (Hammer, Doji) forms at this support, early next week. According to Connors research, there is over a 70% chance for a close above the daily 5 EMA within a week, when the RSI-2 dips below the 5 level.

Volatility (fear) is exploding but the VIX daily is soon facing trendline resistance up around 20. As seen on the OEX weekly chart, it's crucial for the mid & long term positive trend from Nov. 2012, that this volatility roof holds. If not, even a breakout from the weekly Rising Wedge pattern could be the outcome. Weekly momentum has yet to reach an oversold condition and weekly Cycle10 is still in a downside pressure phase, although soon bottoming it seems.

In the long term time frame, with 1 week left of the January trading month, for the sake of the long term positive trend, it's also important that the monthly Volatility trendline(s) remains intact on a monthly closing basis. If not, it could open up for even higher fear among investors and put more serious pressure on the stock market, in the months thereafter.

The 20Y T-Bond ETF TLT weekly broke out to the upside near the Triangle Apex, at the start of the year. The important summer 2013 Pivot low, mentioned in the Outlook 2014 Report, was never touched, instead the Bond market took the route north.

The advance could be the result of a flight to safety, as many investors understand the stock market tide is probably reversing, as major trendlines have been reached in the broad market. However, the advance so far has come on weak Volume, reflecting a lack of participation from the big boys. So from an EWP angle, it could be a temporary corrective phase, before resuming it's overall path lower. First Fib. resistance is up around the 110 level, a likely target, in case it's able to overcome the Fall 2013 Pivot high.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The Neural Net System turned Short on the OEX weekly, after this trading week. 10/25 A revised wave count suggest a likely C wave from the summer low is taking the form of a a-b-c-d-e rising bearish wedge pattern, with the d-e part yet to be completed. So this could mean some short term weakness is coming, before once again pushing higher in the last wave e. The earlier preferred wave count is now moved down the list, taking the role as the alternate view. The bearish divergence observed in RSI-2, portend selling pressure coming early next week.

Given the move to new highs this week, if we take a step back and look at what's going on the longer term charts, it's fairly possible the market is going for the key L3 DGL (Dynamic Gann Level) line, drawn from the 1994 closing low, before a long term top finally could be in place.

Depending on how fast this target area is reached, that could best case bring the S&P 500 to the 1900ish, before peaking. Look at the long term bearish divergences found all over the place, developing in the face of the market's stair steps to new highs. I.e. the 18 MA of the long term NYSE A/D line (Advance - Decline Issues) is going through similar weakness these days, as seen before the 2007 major top.

The monthly New High - New Low Index is also reflecting underlying weakness, not a healthy market advance, since early Spring. The NYSE Summation Index is also showing strong weakness since Spring vs. the new highs in the market.

In the S&P 500, despite the fact that this market is now over 200 points higher than it was at the 2007 top, the reliable RSI-25 still has yet to take out its 2007 peak. In general, the longer these technical warning signs are flashing, the deeper the upcoming Bear trend tend to be.

As for a more positive observation, the Junior Gold Miners - GDXJ weekly, is climbing higher from what could be a just completed Double Bottom looking pattern, with the RSI-25 bullish divergence suggesting a minimum advance to the upper (blue) channel line, in case its first able to overcome the minor trendline around the 46 level. The close near the high this week, indicates more to come to the upside, next week.

Ray Dalio, (who is said to be worth some $US 13 billion) the founder of Bridgewater Associates, the largest hedge fund in the world, is spilling the beans on how the economic machine works, through a recently published video. In 30 minutes he shows his secrets. In case you haven't seen it, (highly recommended) below is the link:

http://www.youtube.com/watch?feature=player_embedded&v=PHe0bXAIuk0


S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The 20Y T-Bond ETF TLT weekly is getting closer to the first Fib. resistance area. After a pull-back, the overall positive trend should continue thereafter.

The Neural Net System is currently Long on the OEX weekly, after this trading week.

Below is also a S&P 500 Neural Net forecast for the next trading week and a 5 month forecast as well, charts courtesy of chartsedge.com Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

10/04 Long term, although maturing, the bullish price trend from March 2009 is still intact after the September trading month, as seen on this OEX monthly chart. Monthly MACD's bullish mode from February 2012 also remained positive. The market formed a similar Pin bar as observed in the Spring, up against channel and the key long term (62%) DGL resistance, drawn from the Sept . 2002 closing low. The market is struggling with these two resistance areas.

Despite September's up close in the market, long term Volatility - VIX monthly once again closed at nearly the same level as last month, above the long standing trendline.

Long term New High - New Low Index readings are also flashing a warning sign, tracing out a clear bearish divergence versus the recent high in prices. So something is brewing in the market, possibly a topping process which has been going on for several months, up against major resistance.

In addition to the often seasonally weak October month, a potential debt roof negotiation failure between the Republicans and the Democrats, could be the trigger for market weakness. Any breakout from the bullish price channel, sooner or later, would most likely confirm a longer term top in place at that point. Until then, the long term positive market trend is treated as still active.

If we zoom in on the Short & Mid term, the overall positive trend from November 2012 is still intact at this point. Although the view about higher prices from the August low turned out correct, the mid September move to new highs negated the earlier wave 2 possibility.

Instead, it could be a series of 1-2's now stair stepping higher, as part of a final wave (5) scenario from the summer low. Or it could be an Ending Diagonal in its last stages. Only time can tell about the real outcome.

The first part of the coming trading week should be positive, as RSI-2 is coming out from a bullish diverging oversold state, with prices at the same time reacting up from long standing trendline support. One likely target is the upper trendline around 1730 in the S&P 500 and 780 in the OEX.

On the weekly chart, the bullish Pin bar formed at trendline support, also suggest higher prices ahead, supported by not yet overbought weekly momentum readings.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The 20Y T-Bond ETF TLT weekly is pushing higher, out from a Falling Wedge pattern. First Fib. resistance (calculated from the July 2012 high) is up at roughly 112.

The Neural Net System is still Short on the OEX weekly, after this trading week.

Below is also a S&P 500 Neural Net forecast for the next trading week and a 5 month forecast as well, charts courtesy of chartsedge.com Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

09/06 With the August trading month behind us, a look at the monthly charts shows an upside breakout from the long standing VIX monthly Falling Wedge pattern. This doesn't bode well for the stock market in the coming months, as i'll look for a minimum 38% retracement of the decline from the 2008 peak in Volatility (investor fear).

Given the currently preferred Elliott Wave count, more likely it will retrace deeper than this at some point, the 62% level is the key retracement zone. On the VIX daily chart, one can see a firm uptrend, with prices oscillating higher within a channel looking pattern.

So was the August increase in Volatility enough to cause an OEX monthly MACD crossover? Apparently not, the red signal line turned bearish but has yet to make a MA (moving average) crossover.

So conservatively, the positive MACD trend from February 2012 is still intact at this point, with prices still trading within a bullish channel. Here are updated monthly charts for the S&P 500 - Dow 30 and Nasdaq as well.

Friday, China warned about what a military conflict could do to the global economy. According to the U.S. Treasury, China owns 1.275 trillion dollars of U.S. debt and Russia 138 billion dollars. If the U.S. attacks Syria, Russia and China probably will not go for military action right away but could instead choose to dump debt they already own, back on the market. If China and other big foreign lenders quit buying and dumping U.S. debt, that could lead to yields on U.S. Treasuries soaring.

So what could be the outcome if the yield on 10 year U.S. Treasuries continues it's uptrend?

- Borrowing money could cost more for the federal government.
-The same goes for state and local governments.
-Bond yields goes the opposite way of bond prices. Higher bond yields could cost bond investors trillions of dollars, in the end.
-Rising bond yields could cause way higher mortgage rates. In fact, this is already happening. The average rate on a 30 year mortgage hit 4.57 percent this week.
-Higher interest rates could put the breaks on in economic activity.
-This in turn is not good for the stock market.

So this scenario lines up with the view that a Cycle degree wave B from March 2009 is coming to an end in the stock market, if not already so.

Mid term, the weekly chart reveals oversold momentum and a weekly Cycle10 reached it's buy territory.

This is the outcome of the first price leg down from the August high, as seen on this S&P 500 daily chart, a five wave Impulse looking structure, which is now being retraced by a possible wave 2, a-b-c corrective pattern, with the wave a part of this a-b-c zig-zag, working it's way higher from the recent low, currently struggling with resistance from the earlier broken trendline. So a wave b starting from this area is not ruled out. Overall, typical wave 2 retracements goes towards the 50 - 62% level.

That Aug. low was caused by DGL (Dynamic Gann Level) L1 support, which in this case, also represented the 6/8 MML support area, on the daily Murrey Math Chart.

The recent low came with a bullish divergence in the New High - New Low Index warning about a reversal coming. The wave a reversal then pushed the Nyse Summation Index trend indicator into bullish mode. So we could see a wave b dip next week, before a wave c could bring prices even higher than now.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The 20Y T-Bond ETF TLT weekly, closed below the 50% retracement support Friday, after a brief recovery which took prices up for a test of upper wedge resistance. A test of lower wedge support is looked for next week.

The Neural Net System is still Short on the OEX weekly, after this trading week.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

08/16 A five wave looking Impulse structure from the November 2012 low could have reached it's termination point, at the early August high. So the higher degree wave C might have ended, which possibly also made an end to the Primary wave Z from October 2011, better seen on this OEX Weekly chart.

Although there is a lack of Volume confirmation at this point, even a Cycle wave B top from March 2009 can't be ruled out because of this. Any monthly MACD bearish mode triggered this fall or later, would be increasing evidence of this.

The same goes for an upside breakout (monthly closing basis) from the Falling Wedge pattern in the Volatility - VIX monthly chart, indicating long term rising investor fear ahead, which could put pressure on the stock market, long term.

As warned about in the Market Outlook 2013 Report rapidly increasing Yields and also seasonal factors could damage the financial markets in the coming months.

Here is what The Economic Collapse blog thinks about the yield on 10 year U.S. Treasuries:

..."If you want to track how close we are to the next financial collapse, there is one number that you need to be watching above all others. The number that I am talking about is the yield on 10 year U.S. Treasuries, because it affects thousands of other interest rates in our financial system. When the yield on 10 year U.S. Treasuries goes up, that is bad for the U.S. economy because it pushes long-term interest rates up.

When interest rates rise, it constricts the flow of credit, and a healthy flow of credit is absolutely essential to the debt-based system that we live in. Just imagine someone squeezing a tube that has water flowing through it. The higher interest rates go, the more economic activity will be squeezed.

If interest rates continue to rise rapidly, it will be more expensive for the U.S. government to borrow money, it will be more expensive for state and local governments to borrow money, the housing market may crash again, consumer debt will become more expensive, junk bond investors will be in for a world of hurt, the stock market will experience a tremendous amount of pain and there is a good chance that we could see the 441 trillion dollar interest rate derivatives bubble implode."...


Using the Dow Jones REIT Index as a proxy, there is in fact also technical signs the Real Estate market is heading lower again, long term. It made a Pin (reversal) bar top in July up against the earlier broken Rising Wedge pattern and is now testing the June Pivot low. If it fails to hold, first Fib. support comes in around 940, a likely target mid term.

Mid term, the OEX Weekly chart reveals trendline support down around 725 could be a natural target, before making a reversal. This is supported by weekly momentum and also Weekly Cycle10 just started on a downside pressure phase.

In the very near term however, given the S&P 500 RSI-2 (chart above) dip below 10 Friday, there is better than 70% chance the S&P 500 will close above it's 5 EMA within a week.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The 20Y T-Bond ETF TLT weekly, has reached it's 50% retracement area, calculated from the 2010 - 2012 advance. It could go for a test of the key 62% Fib. support down around 98, before making a notable reversal. This also happens to be major trendline support area on the monthly chart. So i would be surprised if prices ignores this strong support right away.

The Neural Net System (Re-trained 10/26) turned Short on the OEX weekly, after this trading week.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

07/05 A brief comment due to the summer holidays, i wish you a good one!
The analysis discussed in the previous update is still valid after this trading week. As long as the June wave 2 high remains intact, the wave 3 scenario can't be ignored and the overall bearish trend from the May high could resume soon. The SPX closed up against minor trendline resistance Friday. Even if this area is overcome (daily closing basis) it still needs to break through the stiff resistance produced by the trendline coming in from last year, which is around the 1650 level, 740 in the OEX.

RSI-2 climbed above 95 Friday. Readings above this level gives a better than 70% chance that the market will close below it's 5 day EMA within a week, according to Connors research. In retrospect, the June low was a perfect hit to the 5/8th MML (Murrey Math Line). It's normally difficult for the market to enter the 3/8th - 5/8th trading range but once there, it tend to stay within this range 40% of the time, according to this theory.



S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

As for the 20Y T-Bond ETF TLT weekly, more selling pressure forced prices even lower this week. The close near the low indicates more weakness coming next week, towards the 50% retracement support.

The Neural Net System (Re-trained 10/26) turned Long on the OEX weekly, after this trading week.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

06/28 A look at the Volatility - VIX monthly chart after the June trading month, shows an intra-month attempt to break out but once again ended the month up against wedge resistance. Any clear monthly close above this stiff resistance area, wouldn't bode well for the stock market, longer term.

As for the OEX monthly chart, the (red) MACD signal line turned flat but has yet to cross the MA, keeping the long term bullish mode from February 2012 intact.

Short term, the S&P 500 reacted up from first Fib. support this week, after it broke below strong trendline support the week before. It's common to observe snap-back moves like this, towards recently broken trendlines. Because of the Apex of 2 converging trendlines, a fairly strong resistance area is up around 1630-1635 in the SPX, 735 in the OEX. From a OEX weekly point of view, the first Fib. support also represents larger trendline support. Weekly momentum is near it's oversold territory.

Daily prices could be working on a series of 1-2's lower, so to keep the view valid that a wave 3 structure is developing from 06/18, this wave 2 high (made 2 weeks ago) must remain intact. If violated, it could mean the market has been through a wave (4) only, (alternate count from the May high) indicating the one degree higher wave C from the November 2012 is in fact still active.

The NYSE Summation Index trend indicator turned positive Friday. It has shown the true trend from the May high quite well, inspite the "price noise" observed on the way lower.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

As for the 20Y T-Bond ETF TLT weekly, the high mentioned in the previous update was never touched. Instead, continued weakness was the outcome for this market, falling below both trendline and first Fib. support. These levels now acts as resistance instead.

The Neural Net System (Re-trained 10/26) turned Short on the OEX weekly, after this trading week.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

06/14 The S&P daily markets are probably working on a wave 2 (a-b-c) pattern, if not already completed at the high made a week ago. Any break below Thursday's low next week, would increase the odds of a already ended wave 2. However, if it first breaks the pivot high made a week ago, then the wave 2 scenario has probably yet to reach it's termination point, caused by a smaller degree wave c pushing higher from Thursday's low.

Both the daily & weekly NYSE Summation Index is still in a firm trend lower, inspite the price oscillations higher, seen in past 2 weeks.

Both Thursday's and the previous week's lows were caused by the recently drawn (blue) L1 DGL support line. If the convergence of the two L1 lines fails to hold next week, it could open up for more weakness, towards L2 support.

A look at the VIX Daily (Volatility) chart, shows that important resistance is still intact. If broken next week, even higher investor fear and more serious stock market weakness could be the outcome in the coming weeks and even months.

The bearish weekly momentum trend is at mid readings, so there is still room left, before a mid term oversold market condition is reached. If the current trendline fails to hold next week, (closing basis) next trendline support comes in around the 705-710 area, in the OEX.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

As for the 20Y T-Bond ETF, TLT weekly trendline support is still intact after this trading week. So if this week's high is broken next week, it could mean a mid term bottom has been established in this market.

The Neural Net System (Re-trained 10/26) turned Long on the OEX weekly market, after this trading week.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

05/31 June is here and a look at the May monthly charts shows some reversal behavior in the broader markets. The NYSE Comp. formed a perfect Pin (reversal) bar in the May trading month. The S&P 500 monthly pushed to new highs intra-month but made a retreat in the end of the month and closed in the lower part of the range, up against trendline resistance. This indicates sellers coming to the market, forcing prices lower.

The overall move beyond the 2000 & 2007 major peaks is not backed up by RSI-25, so is forming a bearish divergence, flashing a warning sign for the longer term. The OEX monthly could be forming a major Double Top pattern, which can be quite bearish in nature. This market also printed a Pin bar.

The recent months stock market advance has pushed sentiment readings to an even higher extreme. From a monthly point of view, the BPI (Bullish Percent Index) is now at even higher levels than it was at i.e. the 2007 major stock market top.

Daily Sentiment Index (courtesy of trade-futures.com) readings for May shows traders moved to 92% and 93% Bulls in the S&P 500 and NASDAQ, the highest level in more than 2 years.

As for long term Volatility (investor fear) it would take only one more higher close in the VIX monthly to break out from the long standing Triangle pattern, which wouldn't bode well for the stock market, longer term.

In fact, long term Momentum turned bearish after the May trading month, at quite overbought readings. As seen on the the same chart, the key L3 long term DGL line (Dynamic Gann Level) from 1994 is also nearly reached.

Short term, the first move down from the May high came in a smaller degree five wave structure, which could mean the first ripples of a new short & mid term downtrend has been seen. The pivot low formed a week ago, was broken Friday. So this could open up for further weakness towards trendline support around the 1605 - 1610 level, before a near term reaction up could be the next event to look for. In the OEX, this support comes in around 720 - 725.

Even a long term top is not ruled out, although ideally this should come on a significant Volume spike, which has yet to be seen. But who knows, the overall lack of Volume throughout the Cycle degree B wave (B waves in general mostly developes on thin Volume) could be the reflection of an advance fueled by quantitative easing and money printing and this time may not lead to a big Volume spike at the end of this long term trend (if not already ended).

Coming back to the Bradley Indicator (as published in the Market Outlook 2013 Report) June 22 was the projected time for a larger top, if the overall trend was bullish into this time target. Whether this will mark a secondary top or the final one, remains to be seen.

Anyway, a key to exit the stock market's Long side in a less aggressive way, would be to look for the next bearish crossover in the monthly MACD. That would be a harder technical signal of a long term top in place. Until this occurs, the long term bullish trend is still viewed as intact.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

As for the 20Y T-Bond ETF, TLT weekly reached channel support intra-week but recovered a bit, closing for the week at 114.45. It would take a weekly close below this support to open up for even more weakness in this market. RSI-25 has yet to reach an oversold condition, so there is still room for more price weakness, short & mid term.

The Neural Net System (Re-trained 10/26) issued a Short signal on the OEX weekly market after this week.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

05/03 With another trading month ended a few days ago, a look at the (S&P100) OEX monthly chart, shows a Close for the month up against wedge resistance. Naturally then, monthly MACD is still in a firm bullish mode, after it turned positive in February 2012.

A major Double Top formation from October 2007 is not ruled out in this market, a topping process ideally finished around the projected June peak in the Bradley indicator, as discussed in the Market Outlook 2013 Report. So a Cycle degree wave B from March 2009 could terminate soon, most likely taking the form of a w-x-y-x-z pattern, one degree (Primary) lower.

S&P 500 monthly closed up against a major resistance line, drawn through the 2000 & 2007 major peaks. Because of the angle of this line, it went slightly beyond the 2000 & 2007 tops and at the same time tracing out a bearish monthly RSI-25 divergence vs. the new high in prices.

The Dow monthly on the other hand, has some more distance to go, before reaching the same line configuration, because of the Expanded Flat pattern formation in this market.

Nasdaq Comp. monthly also closed up against wedge resistance. A confirmed top in place would be signaled by a downside breakout from this wedge. Any clear close above the upper wedge line would most likely negate this pattern.

From a long term Volatility (investor fear) point of view, the April close came at major Triangle line support, thus keeping the VIX monthly still stuck within this Triangle pattern. The directional breakout from it, will probably set the stock market tone for the months thereafter. Given the overbought momentum readings in the monthly charts, odds favor a long term VIX breakout to the upside, sooner or later.

Mid & Short term, apparently the five wave structure from the November 2012 low has yet to reach it's termination point, further delaying a longer term market top. The S&P 500 daily chart shows the reason why, the earlier supposed wave (5) top in April turns out to be the wave (3) part only, with the market now pushing higher in either wave (5) or as a lower ranked alternate wave count, the wave b part of an Expanded Flat wave (4) correction underway. Anyway, an overbought RSI-2 suggests a pull-back coming in a day or two.

From a DGL (Dynamic Gann Level) point of view, the market once again ran into L2 resistance Friday, as it did at the April top. This occurred at the same time as the VIX daily closed at trendline support. In addition, see the fading RSI-25 momentum vs. the "stair-step" higher highs in prices. This is often a warning about a significant top coming.

OEX weekly momentum readings barely reacted to this week's 13 point up close, still staying in bearish mode, which is a warning sign as well. The overbought extreme in BPI sentiment (major resistance line reached) is also flashing caution for the market.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

As for the 20Y T-Bond ETF, TLT weekly is coming out of it's several weeks long consolidation phase. One more lower close could open up for more weakness towards first support, around the 116 level.

The Neural Net System (Re-trained 10/26) is still Long on the OEX weekly market.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

04/19 With prices breaking below trendline support, chances are the bullish trend from the November 2012 low is over. As often seen before in a trend change phase, the market is now making a snap-back move towards the broken trendline. To not put the bearish stance in doubt, prices should not close into the channel again. Any break above the April high would prove me wrong about a new trend underway from that high.

From a DGL (Dynamic Gann Level) point of view, the market found support on the L1 line late in the week. L2 resistance is up around 1600, depending on when/if it's reached.

If we zoom into the finer waves, this S&P 500 15 minute chart shows the price development from the April high is Impulse looking, which gives additional support to the view that the market peaked out at the April high.

Volatility (investor fear) is rising but is making a pull-back these days, as seen on the VIX daily chart. Any break above the larger trendline, could mean mid term trouble coming for the stock market.

A look at the OEX weekly Cycle10 reveals a still active bearish cycle pressure phase, although in it's late stages it seems.

As observed many times in the past, when weekly RSI-25 moves above the 60 level, the market tend to roll over and mid term negative price trends are often the outcome. The higher RSI-25 is above the 60 level, the higher the odds of a mid term top forming.

Gold, Silver and the Oil market took a dive this week. A look at Gold intra-month shows after the downside Triangle breakout, it tested major trendline and 50% retracement support before recovering. It's crucial that this support holds on a monthly closing basis, to not threaten the decade long positive trend in Gold.

Silver, here represented by the SLV weekly ETF, gapped below major trendline support. This area should now act as stiff resistance instead, a snap-back move towards it is likely, sooner or later. RSI-25 is at the 32 level, so this market is getting mid term oversold soon.

The Oil market has also experienced some trouble in recent weeks but Light Crude weekly finally found support on a major trendline coming in from 2010. Also here it's important support holds (weekly closing basis) to not open up for more serious price weakness in this market.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The 20Y T-Bond ETF TLT weekly is quiet, not much happening here, still trading above the upper Triangle line these days. Any break above the high made 3 weeks ago, would signal even higher prices ahead.

The Neural Net System (Re-trained 10/26) is still Long on the OEX weekly market.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

04/05 The stock market extended even more in the beginning of April, making a "throw-over" of the 5/8th MML (Murrey Math Line) early this week.

But later in the week the S&P 500 made a pull-back towards trendline support, which also roughly represents the L1 DGL - Dynamic Gann Level support. The overall price development in the S&Ps, from the November 2012 low - to the April high, is a clear five wave Impulse pattern, which probably terminated at the April high. This is the case in the Dow daily as well, which also shows a text book five wave pattern.

This could mean a correction is underway from the April high, a bearish stance supported by i.e. a firm bearish trend in the NYSE Summation Index indicator. In fact, this indicator stayed in bearish mode with the last price push to the April high, flashing a warning sign about that peak in the market. The same bearish divergence occurred in the New Highs - New Lows Index, as seen on this chart. Also Volatility - VIX daily indicated stock market weakness coming, after it established a bottom at the March 2007 low.

Friday's intra-day recovery from trendline support (forming a bullish reversal bar) and a mildly oversold RSI-2 in the S&P 500, suggests a minor rebound is likely coming next week though, which however, should not take out the April high. If this occurs, it would mean the wave C (Alt.count: 5) from the Nov. 2012 low has not yet come to an end. Any daily close below trendline support at some point next week, would be increasing evidence of a completed wave C.

And with it, the possibility of a completed Cycle degree wave B from March 2009. Of course, this is too early to tell at this point but still... this scenario can't be ignored, in case the wave count works out correctly. This view is also supported by i.e. the latest Investors Intelligence sentiment reading, which climbed to 52% Bulls. In the past, readings above 50% often showed up at major tops in the market.

Anyway, as often used in the past, i'll let the next bearish crossover in the monthly MACD be the guide and odds booster for a larger top in place. Until then, the long term positive trend is still viewed as intact. If it turns bearish around the projected June reversal in the Bradley indicator (published in the Outlook 2013 Report) then chances are good we're dealing with a long term top in the market, in my opinion.

S&P 100 BPI (Bullish Percent Index) daily Sentiment chart

The 20Y T-Bond ETF TLT weekly broke out to the upside from the Triangle pattern mentioned in the previous update. The close near the high for the week, indicates even higher prices coming next week.

The Neural Net System (Re-trained 10/26) is still Long on the OEX weekly market.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

03/15 The market has pushed even higher, forcing a revision on the Elliott Wave count, as the earlier suggested Diagonal Triangle pattern is now a less likely scenario. The price structure from the November 2012 low is now best interpreted as a five wave impulse pattern, completing wave c, as part of a complex wave Z pattern, developing from the October 2011 bottom.

The wave 5 of this c may have already ended, given the spike in selling Volume Friday. But a look at Volatility - VIX daily shows it could even go for a test of the important 2006 low, if the Spring 2007 low fails to hold next week, opening up for even higher stock market prices.

The S&P 500 has followed the L2 DGL resistance higher, on fading momentum in both daily and weekly time frames, reflecting exhaustion in this advance. The next bearish crossover in the NYSE Summation Index trend indicator, would be increased evidence of a top in place, of minimum short term degree.

Sentiment (chart below) readings are now close to the extreme levels observed in 2009, 2010, 2011 and 2012, a fairly stiff resistance area, flashing a warning about a significant market reversal coming.

S&P 100 BPI (Bullish Percent Index) daily Sentiment

The 20Y T-Bond ETF TLT weekly is stair stepping lower, forming a Triangle pattern it seems. The directional breakout from this Triangle, would set the tone for this market, for some time thereafter.

The Neural Net System (Re-trained 10/26) is still Long on the OEX weekly market.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

03/01 Monthly charts have been updated. A look at long term Volatility - VIX Monthly shows it's still stuck within 2 converging trendlines, reacting up from trendline support in February. So awaiting a directional Volatility breakout, for a clue where the stock market is heading long term.

But given the weak technical situation and the overbought markets, odds favor an upside breakout which would bring increased fear to investors and with it, pressure on the stock market. An example of a weak technical situation is the deteriorating FCX (Copper & Gold) versus the recent advance in the stock market.

Short term, we saw a recovery this week after the market pulled back to channel support in the previous week. But it has yet to overcome important trendline(s) resistance and the February high, so the market working on a series of 1-2 waves is a scenario which can't be ignored at this point. So it would take a break of the Feb. high to prove that a new bearish trend is not underway from that high.

In fact, NYSE Summation Index weekly trend indicator now in bearish mode suggest so. Once this indicator changes mode, it tend to stay so for weeks. For example, it catched most of the advance (roughly 100 points) from the Nov. 2012 low. Even with the mid Dec. pullback, it showed the true trend towards the Jan. high.

Even the daily NYSE Summation Index trend is holding on to it's current bearish mode, despite the market recovery this week. The same goes for the 21 EMA of the McClellan Oscillator.

So it will be interesting to see whether this materializes into a channel breakout next week or if the market still has unfinished business to the upside, making another diagonal trendline throwover. If so, RSI-2 would probably be at an overbought extreme at that point.

S&P 100 BPI (Bullish Percent Index) daily Sentiment

After weeks in consolidation mode, the 20Y T-Bond ETF TLT weekly climbed into the Triangle again. The close near the high for the week, indicates more to come to the upside, next week.

The Neural Net System (Re-trained 10/26) is still Long on the OEX weekly market.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com
Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

02/ 15 The S&P 500 is consolidating up against the upper Diagonal Triangle line. So as long as this resistance area remains intact, the market is vulnerable to fall back for support. The move to new highs in recent weeks is not backed up by new highs in i.e. RSI 25 reflecting fading momentum in this advance. As seen on the same chart, the market has climbed higher along the L2 line for several weeks.

Bearish divergences are also observed in other indicators, like the New High - New Low Index. The NYSE Summation Index trend indicator is also deteriorating, despite the recent advance. Even the 21 EMA of the McClellan Oscillator is going against the price trend, warning about a reversal soon.

Volatility - VIX daily reached important trendline support Friday. Any upside breakout from the two converging trendlines, would indicate increasing investor fear coming and with it, pressure on the stock market.

Weekly Cycle10 turned bearish after this trading week, it has been in an upside cycle pressure phase since November 2012. Several reversal bars have formed in the last two weeks. This week a Pin bar of the same type seen at the 2007 high in weekly prices.

S&P 100 BPI (Bullish Percent Index) daily Sentiment

The 20Y T-Bond ETF TLT weekly is consolidating up against the minor trendline it broke through 3 weeks ago. A resumption of the overall bearish trend is looked for.

The Neural Net System (Re-trained 10/26) is still Long on the OEX weekly market.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com
Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

02/01 Most charts are updated, monthly included. There is not much to comment this time, as the market situation is more or less the same. The persistent trend from the December 2012 low is still intact at this point, the upper Diagonal triangle line (blue) is one likely target before a near term top could be in place.

The L2 DGL is another one. RSI-2 should be overbought when the S&P 500 has reached the triangle resistance area, so at least a pull-back should be the minimum outcome from this zone. That said, any daily close above the L2 could open up for even higher prices, towards the key L3 line.

January's market advance came at the right moment, causing a bounce in the monthly MACD, up from December's test of it's moving average. So the long term positive market trend is kept intact after the January trading month.

A warning sign though, see how the S&P 500 monthly closed up against the major 8/8th MML (Murrey Math Line), the strongest MML resistance in this theory. As seen on the same chart, monthly momentum is at the same time tracing out a bearish divergence vs. the higher high in prices, showing this uptrend is loosing steam. Any intra-month push higher in February but a close below this MML would be an even stronger warning, as this is often a technically strong reversal pattern. A Pin-bar formation like that, after the February trading month, up against this major resistance, would signal market weakness ahead.

S&P 100 BPI (Bullish Percent Index) daily Sentiment

The 20Y T-Bond etf TLT weekly closed below support this week. So the first Fib. support (around 112.3) could be the minimum downside target, especially since RSI-25 still has room to the downside, before getting oversold.

The Neural Net System (Re-trained 10/26) is still Long on the OEX weekly market.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com
Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

01/25 Since the S&P 500 has climbed beyond the Sept. 2012 high, (the OEX is still at a Double Top level) the wave 2 scenario has been excluded from the list of valid counts. The EWP doesn't allow wave two's to retrace more than 100% of wave 1, to be viewed as a still valid wave count.

So after the revision, an Ending Diagonal pattern from Spring 2012 is what comes up as the next likely wave structure, which in fact could be in it's last stages. It's a rare pattern.

Here is what the Elliott Wave Principle says about this special type of wave:

..."An Ending Diagonal is a special type of wave that occurs primarily in the fifth wave position at times when the preceding move has gone "too far too fast" as Elliott put it. A very small percentage of ending diagonals appear in the C wave position of A-B-C formations. In double or triple threes they appear only as the final C wave. In all cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement.

Ending diagonals take a wedge shape within two converging lines. Each subwave, including waves 1, 3 and 5, subdivides into a "three", which is otherwise a corrective wave phenomenon, producing an overall count of 3-3-3-3-3. The fifth wave of a diagonal triangle often ends in a "throw-over" i.e., a break of the trendline connecting the end points of waves one and three."...

So in the S&P 500 case, a test of the 2000 & 2007 highs from a "throw-over", is not out of the question, if the market decides to ignore the diagonal trendline. Sentiment readings (see BPI below) shows that optimism rises back to former extremes, a warning about an important top in the making soon.

The short term NYSE Summation Index is in a firm trend higher. In the very near term, a ConnorsRSI reading of 92.68 and RSI-2 at 99.92 reflects a quite overbought market though, so a pull-back is looked for. The S&P 500 will face resistance from the L2 DGL next week, time will tell if it's able to overcome it.

From a Murrey Math point of view, the S&P 500 has reached the blue 4/8th MML (Murrey Math Line) which is viewed as a strong resistance/support line in this theory.

The persistent market push to new highs, has caused a Volatility - VIX daily drop below strong support, which could open up for even lower Volatility (investor fear) towards the 2007 major low. The earlier strong support area now acts as stiff resistance instead.

The upper trendline on the OEX weekly chart and the close near it's high this week, suggest there is more upside room for OEX prices, excluding the Double Top possibility.

The weekly 01/27 (+/- 1 week) Gann Angle cycle convergence is due these days. It marks 90 calendar weeks from the April 2011 high, 135 weeks from the June 2010 low and 144 weeks from the May 2010 high.

The mid term positive trend going into it, portend a reversal in the opposite direction, if this GA turns out to have an impact. Given the normal leeway of +/- 1 week, it still has one more week to go. So even if the advance continues next week, this GA time window could still mark a top in the market, of minimum short term degree.

S&P 100 BPI (Bullish Percent Index) daily Sentiment

The 20Y T-Bond etf TLT weekly has yet to fall below support. If it does, more weakness towards the first Fib. support area (112.5) could be the outcome.

The Neural Net System (Re-trained 10/26) is currently Long on the OEX weekly market.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com
Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

01/11 The below excerpt from the previous comment, still has some validity, as the S&P 500 is still working on what looks like a Double Top patttern, from the Sept. 2012 top. A Minute degree five wave pattern from channel support, may have reached it's termination point.

..."Short term, the S&P 500 is getting overbought, with Friday's close printed up against channel resistance. A Double Top formation from Sept. 2012 is a possibility. This view is also supported by the current Volatility - VIX daily reading, which closed Friday at a strong support line, coming in from March 2012. The OEX weekly chart shows a close for the week up against the earlier broken trendline, with Stochastic momentum tracing out a bearish divergence."...

This week a Hammer (reversal) candlestick was formed up against this trendline resistance, so price weakness could be the outcome next week.

S&P 100 BPI (Bullish Percent Index) daily Sentiment

The 20Y T-Bond etf TLT weekly had an Inside Week, trading within the range of the previous week, reflecting indecision among investors. A bearish breakout from this indecision, signaled by a break of the previous week's low, would indicate more weakness coming, towards first Fib. support.

The Neural Net System (Re-trained 10/26) is still Short on the OEX weekly market.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com
Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

01/04 A brief STU comment this time, priority was given to the writing and publication of the Market Outlook 2013 Report, found under the link above.

Short term, the S&P 500 is getting overbought, with Friday's close printed up against channel resistance. A Double Top formation from Sept. 2012 is a possibility. This view is also supported by the current Volatility - VIX daily reading, which closed Friday at a strong support line, coming in from March 2012.

The OEX weekly chart shows a close for the week up against the earlier broken trendline, with Stochastic momentum tracing out a bearish divergence.

S&P 100 BPI (Bullish Percent Index) daily Sentiment

The 20Y T-Bond etf TLT weekly market is breaking down it seems. If the Fall 2012 low fails to hold next week, more weakness towards the first Fib. support, could be the outcome.

The Neural Net System (Re-trained 10/26) is currently Short on the OEX weekly market.

Below is also a S&P 500 Neural Net forecast for the next trading week, chart courtesy of chartsedge.com
Please, be aware that inversions can occur in these NN forecasts, like in the Bradley indicator. It should be used with other indicators.

Previous market commentaries:

2012

2010 - 2011
2008 - 2009
 


 

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