Market Update …

So all experienced traders know that Mother Market never makes it easy … the current market is I’m sure no different.  So if that is the case again here, then traders should keep an open mind when looking at the likely path going forward.  Here are some of the possible paths for the market going forward …

S&P 500 Index Futures Contract (ES_F) – 240 Minute Chart #1 

I believe that the above scenario is what most market participants are hoping for, and that is why I think that it is the least likely to be the road ahead.  Most traders are bulls and are therefore hoping that the late October low is the low, and that we are making an inverted heads & shoulders reversal pattern after finishing with the entire corrective price action off of the recent all-time highs.  Does this scenario make sense … I think that the price action down into the October low looked too strong to be completed with one simple ABC price structure.  Of course I could be wrong, especially when you consider the seasonality coming into play here the next two months.  Bottom line, is that we have to be aware of this possiblity, but I am leaning in another direction for the market.

S&P 500 Index Futures Contract (ES_F) – 240 Minute Chart #2

Some traders are holding out for a final flush that retests the actual October low … is that what we are going to see?  If too many traders are waiting for that, then it would make perfect sense to see Mother Market, fake traders out and NOT give us a final high-volume flush.  It’s obviously possible, but with the seasonality we are coming up against, I could see the market not completing the larger, more obvious ABC price structure.

S&P 500 Index Futures Contract (ES_F) – 240 Minute Chart #3

This is the scenario I think makes most sense when I look at all the evidence right now … I think the market’s internals are not such that we are going to push down to make a new low and complete the bigger ABC pattern (i.e., scenario #2) right now.  I think it makes more sense to see a seasonal rally now for the next couple of weeks … that will get the market set better for a final reversal down into a bigger C-wave move into support.  Imagine how many traders jump on the “end of the year/Christmas rally”, hoping to catch-up to the overall index’s YTD 2018 return.

I won’t bother showing all of the market internals that have me thinking this way currently, as the market has to prove out what it intends to do the next several days.  More important to traders is just the reminder to keep an open mind and be willing to accept whichever path the market eventually decides to take.

Here is a possible level for market to find resistance in a Scenario #3 pathway …

S&P 500 Index Futures Contract (ES_F) – 240 Minute Chart #4

S&P 500 Index Futures Contract (ES_F) – 60 Minute Chart

The move down into last week’s low looks to me to be a complete 3-wave structure.  The flush down into today’s low was probably enough to leave lots of traders behind if we are indeed going to bounce higher into resistance from these levels.  Speaking of today’s flush, let’s take a c;oser look at it.

S&P 500 Index Futures Contract (ES_F) – 15 Minute Chart

I can see a possible complete 3-wave structure here, but I can also see how we might need one more minor low below today’s low to finalize the fake-out.

Bottom-Line … be prepared for anything.  To me it looks like we could bounce here into a bigger B-wave high, before correcting one final move lower into a bigger C-wave support zone.  Lots of pain if that is indeed what happens.

Cheers … Leaf_West

Market Update …

Here is where I think we are on our way down to a bigger C-wave support for the S&P 500 and NASDQ 100 Indexes (both markets are forming a similar ABC corrective pattern) …

NASDQ 100 Index Futures Contract (NQ) – 60 Minutes Chart #1

I think that we have completed the first leg of the final C-wave of the ABC corrective price structure.  It looks like we completed a smaller 3-wave lower in the A-purple wave count in that bigger red-C wave.  Now we should be looking for a bounce into resistance which should have a minor abc-wave count.  Then we should have a final flush down into the bigger C-wave support.  That last leg down typically carves out a minor 3-wave structure – it is also typically ruthless and moves very quickly.

Where could the bounce to B terminate?

NASDQ 100 Index Futures Contract (NQ) – 60 Minutes Chart #2

It looks like we completed the purple A-wave with today’s price action … that lines up with my wave count of AAPL as well, so I think odds are we bounce from here until next week.  A nice timing window exists at 1pm-2pm on Monday, November 19th.  The last move down should be fun, and get everyone bearish into year-end, just when they should be looking to trade long out of bigger support.

Cheers … Leaf_West

AAPL is at Support …

Lots of hand-wringing over the decline in AAPL … poor fools don’t realize it is at support of the A-leg in the ABC corrective move.

AAPL – 65 Minute Chart #1

The Wave 2 for AAPL stopped right at the 1.618x extension target, and we have just pushed down into the 1.272x – 1.618x extension target zone for Wave 3.

AAPL – 65 Minute Chart #2

Price is painting its first dark blue extreme trend strength warning candle … that tells me that historically, price is getting extended here.  Price momentum is actually making a higher low here on this latest push into support.  Is the move near completion on the smaller time frame charts?

AAPL – 15 Minute Chart

I think we are making a low here in AAPL … next move should be a bounce into resistance followed by a final move into a bigger Wave-C support zone.

AAPL – 195 Minute Chart

Where will AAPL find resistance?

AAPL – 65 Minute Chart #2

The above chart shows the POC supply of resistance for the whole move lower off the previous high.

AAPL – 65 Minute Chart #3

The above chart shows the POC supply for the last leg lower after the earnings release on Nov 1st.

Best of luck everyone …

Cheers … Leaf_West

US$ Update ….

I wrote a blog post about the US$ yesterday morning (click here for that post).  The price action in the DXY US$ Index today makes it look like a possible high was made yesterday to complete the B-wave I have drawn on my weekly chart … here is that chart from yesterday’s blog post.

US Trade Dollar Index – Weekly Chart (as posted on November 12, 2018)

Here is the price action from today …

US Trade Dollar Index – 240 Minute Chart

US Trade Dollar Index – 60 Minute Chart

The 240-min chart shows that the ATR support is still in place, and I like to see that taken out before I begin to think that any daily chart is turning lower … that ATR support is at $97.03 vs the current price of $97.16.

Could crude oil have made a pukefest low today right on the heels of the US$ making an important top??  Yesterday, I thought crude would find support around the lower support line of the broadening price pattern chart.  Here is that chart updated for today’s pukefest …

Crude Oil Futures Contract (CL) – 240 Minute Chart

Normally, the 3rd wave of a price structure will terminate around the 1.272x extension drawn off of the 2nd wave … if the third wave gets extended it would normally stop at the 1.618x extension target.  Every once in a while, you get some real good capitulation like we did today probably in crude.

Anyways, the US$ top would be an important event for crude and other US$-based commodities.

Cheers … Leaf_West

So Far So Good …

The bigger ABC corrective pattern in the S&P 500 and the NASDQ 100 Indexes are playing out pretty much as I discussed in my earlier blog posts.  I think we found minor support in the NASDQ 100 futures this afternoon and we should bounce higher for the next day and a bit …

NASDQ 100 Index Futures Contract – 60 Minute Chart

How does the timing look going forward?

NASDQ 100 Index Futures Contract – 120 Minute Chart

The next minor resistance should be found at about 7050 – 7060 in the 8am-10am time window on Wednesday.  The next push down should then go to about 6715 at around the 2am-4am next Monday morning.

Then the bounce from there should push to about 6980 in the 12am – 2am window on Nov 23rd … that is on a Friday so the high could be at the end of the day Friday or in the evening hours when futures reopen on the 25th.

The final support low should be around 6270 and be made around the 2am-4am window on Nov 30th … looks like a good old-fashioned puke fest into month end.

December should be a good month to the upside …

Cheers … Leaf_West

Important Top Coming in US$ …

If I can so myself, I’ve had a really good read on the US$ and its longer-term price structure.  Here is the weekly chart for the US trade dollar …

US Trade Dollar Index (DXY) – Weekly Chart

I called out the push right into the Wave 3 high back at the end of 2016/beginning of 2017, and I think that we are at just as important of a top as that resistance level here soon as well.  Whether or not we are making an ABC or a 3-wave move lower off of that late 2016 high, the next move will be for the US$ to go a fair bit lower.

That move lower will have a big impact on US interest rates, inflations, commodity prices (i.e., gold – see my note from yesterday) etc.

US Trade Dollar Index (DXY) – Daily Chart

The corrective bounce in the bigger weekly chart can be seen on the above daily chart to be an almost complete 3-wave structure.  In fact, I think we are in the last minor leg higher in the very last leg into Wave-3 resistance.  The pivot high to be broken and therefore, complete the price structure is $97.20 vs the $96.90 close on Friday.

Bottom Line … not many people are focused on the upcoming change in direction in the US$ and the important change it will create in asset pricing.  Best of luck to all.

Cheers … Leaf_West

Looking Ahead to early 2019 …

It’s always nice if a trader can find a sector early in a possible bigger wave move … its doubly nice if you can get that bigger move early in a new trading year, as it is sure to make the year taste much better.  Looking forward to a possible out-performer in early 2019, I can’t help but be drawn to the Gold Miner Sector.  Let’s take a look at this sector’s potential for early-2019. Continue reading

Is Everyone Back In Yet?

To set up a C-wave lower that will complete the price structure of what I think are ABC corrective waves in the major US equity indexes, price has to complete its move into resistance on the bounce out of last week’s lows.  It looks like we are getting close …

S&P 500 Index Futures Contract (ES_F) – 240 Minute Chart

The ES futures contract has completed a minor abc corrective bounce right into a logical area of resistance.  Price shouldn’t move much higher than the highs of this morning’s trading (around 2787.75)

NASDQ 100 Index Futures Contract (NQ_F) – 240 Minute Chart

The NQ futures have not yet broken the minor a-wave high of 7143.25 made on November 2nd.  A break of that high is needed to make an official abc-structure for this bounce into resistance.

Russell 2000 Index Futures Contract (RUT_F) – 240 Minute Chart

 

The RUT has completed what looks like a minor 3-wave corrective bounce into logical resistance.

Bottom-Line … for the next wave lower to really have the flush-out power and thrust that the C-wave can often have, the market needs for all of the bull-tards to get back in long.  The election news of a split US government may be just what gets the last trader back fully long expecting a clear sailing for the Xmas rally that is sure to come like it does every year.  Maybe Trump’s speech at 11:30am eastern actually sets the absolute high for the corrective bounces.

Cheers … Leaf_West

Is Downtown Josh Brown Whistling Past the Graveyard?

“Downtown” Josh Brown named JPM his final trade today for the half-time fast money show.  Is he correct in his expectation that JPM is a screaming buy here?  Only time will tell, but there is a lot of overhead supply facing the market and JPM here after the damage done by the market in October.

JPM – 65-Minute Chart #1

If my read of the overall market corrective pattern is correct (i.e., ABC correction), then JPM is likely to find resistance in the SLOT and pull-back one more time.  That pull-back may make a higher low which will be bullish or it could follow the market down and make a lower leg (i.e., a final C-wave move).

There are lots of buyers of JPM during the market weakness that may be willing to sell their shares if they can get back to break-even.

JPM – 65-Minute Chart #2

The whole run-up in JPM from this past summer has also produced a lot of stranded traders down here at the current levels … the Point of Control that needs to be taken out before I would consider JPM bullish would be that $113.50 – $115.50 zone vs the $108.00 current price.

Cheers … Leaf_West

The A-Low is In for the NQ Futures …

At the close of the 195-min candle at 10:15am eastern today, the futures chart that I am using to trade the direction of the NQ during the corrective move I last posted on this past Saturday broke on a closing basis, the ATR resistance level.

To me, that ATR break allows me to mark an A-Wave low in the NQ’s ABC corrective pattern I am anticipating.  I have adjusted my timing and retracement charts to that new low.  Here are the NQ charts from this past Saturday’s post (click here to read that entire post) …

NASDQ 100 Futures – 195 Minute Chart (from Saturday Oct 27th)

NASDQ 100 Futures – 195 Minute Chart (from Saturday Oct 27th)

NASDQ 100 Futures – 195 Minute Chart (from Saturday Oct 27th)

Here are the updated charts for the action this week …

NASDQ 100 Futures – 195 Minute Chart #1

NASDQ 100 Futures – 195 Minute Chart #2

Note that I am now looking for some chop in the price action to show me that price has accepted the ATR break higher.  The timing windows are approximate, but the B-Wave high is scheduled for the day of the US mid-term election (Nov 6th),  The C-Wave low, bigger support for this corrective pattern is for Nov 15th around mid-day.

Cheers … Leaf_West