JPM Update – Dec 13/18 …

I wrote a blog post about Downtown Josh Brown’s bullish call on JPM back on November 2, 2018 (click here).  Bottom line is that he proclaimed JPM as one of his favorite stock pick/set-ups … I thought it was just bouncing into resistance.

Here is the chart from that post …

JPM – 65 Minute Chart (November 2, 2018)

Here is the current chart …

JPM – 65 Minute Chart

The 61.8% SLOT level was once again a very important resistance.  You can see that we are pretty close to the C-wave 1.272x extension target.  When I look at the C-wave up close, I do not see a nice normal wave structure, so I am a bit hesitant to call the end to the bigger C-wave move here.  The move lower might be done here but maybe we need one last new minor low to complete – we’ll see. 

Banks as a sector have shown all sorts of problems the past while in comparison to the overall market.  I think JPM and the rest of the banking industry will continue to be laggards as a slowing in the economy gets baked into the stock market.

Cheers … Leaf_West  

ES Update – December 11, 2018 …

Although today’s price action was not what market bulls would have wanted considering how we gapped higher and then trended lower for most of the day, the price wave created by today’s action still keeps possible the read I talked about in yesterday’s road map (click here for that post).

S&P 500 Index Futures Contract (ES) – 30 Minute Chart

Once we see that we are bouncing higher out of a new minor low tomorrow sometime (probably in the morning, then we can watch to see if resistance around that 2726 level (61.8% resistance) will hold and whether or not my read of the bigger price pattern is accurate.

Bottom Line – while not ideal, the price action in the ES today still keeps in play a bigger bounce out of yesterday’s low.

Cheers … Leaf_West

Road Map for the NASDQ 100 …

I have been mainly trading the NASDQ 100 futures during this corrective price action, and therefore, I like to keep a close eye on the price structure and timing windows.  Here is my current read …

NASDQ 100 Index Futures Contract (NQ_F) – 240 Minute Chart #1

Unlike the S&P 500, the NADQ 100 Index made a bigger first wave lower.  I can count 3 minor waves lower into yesterday’s low, and therefore I think we have begun the B-wave bounce in the current corrective price structure.

NASDQ 100 Index Futures Contract (NQ_F) – 240 Minute Chart #2

Where will the NQ’s bounce to?  I think we are likely to make it back to the SLOT resistance zone and I have drawn the resistance level here at 7155 – that is my rough target currently.

NASDQ 100 Index Futures Contract (NQ_F) – 240 Minute Chart #3

If we turn lower at 7155, then the 1.272x extension target for Wave C will be around 6259.

Let’s look at deriving a timing window for Wave B and Wave C … we can do that by looking for prior turns in the waves completed so far.

NASDQ 100 Index Futures Contract (NQ_F) – 240 Minute Chart #4

The first leg lower (small wave-a), the small wave-b corrective bounce ended right at the 1.382x timing window. and the small wave-c ended right near the 2.382x timing window.  Let’s draw the next wave to see where those windows ended up …

NASDQ 100 Index Futures Contract (NQ_F) – 240 Minute Chart #5

Using the next bigger wave lower down (small wave-a) to draw our timing targets, the small wave-b corrective bounce ended right near that same 1.382x timing window we saw in the prior wave analysis. and the small wave-c ended right at the 1.786x timing window.

Using these previous windows,  let’s draw the big corrective wave pattern to see where our timing windows could end up …

NASDQ 100 Index Futures Contract (NQ_F) – 240 Minute Chart #6

So, wave symmetry makes me think that the bigger wave-B timing window should be right around that 1.382x extension target … that puts the B-Wave high in right around the December 10th in the 6am – 10am time slot.

Wave-C’s time window is not quite as sure thing as the B-wave based on the prior c-waves coming in at 1.786x and 2.382x.  If we look at these time slots as a bigger window, we look for a bottom for Wave-C between Dec 30th and Jan 29th.  That is a big window, and since we know that Wave C’s typically complete in 3-wave patterns, we should be able to get a good sense of the completion window when we start getting closer to what looks like a completed 3-wave structure.  Bottom line is that we are likely to end this corrective pattern in early 2019.

Cheers … Leaf_West

Next Move for the SPX is Higher …

When I look at the Price Structure of the current corrective pattern in the S&P 500 Index, I think that we are still in the midst of making a bigger ABC.  If that is correct, I think that the median line will act as support here and we will bounce higher to complete the B-wave of the corrective pattern … that will set up a pretty ugly early December for the bull-tards.

S&P 500 Index (SPX) – 195 Minute Chart #1

The median line looks like it held to the exact penny at yesterday’s low … so are we ready to bounce higher?

S&P 500 Index (SPX) – 195 Minute Chart #2

If we are going to bounce off of the median support line, seasonality will definitely help.  The bounce higher will be the minor C-wave of the bigger corrective B-wave, and those are typically 3-wave structures.  The final move to complete the bigger ABC corrective price pattern will be vicious … that should also be a bigger 3-wave structure/down-leg.

S&P 500 Index ETF (SPY) – 195 Minute Chart #1

For traders of the SPY, price should bounce to at least high enough to take out the A-pivot high of the B-corrective wave structure.  That is $281.22 or about 6.5% higher than yesterday’s close … that type of move should suck in lots of year-end rally’ers and that is exactly what needs to happen to set-up the final C-wave to support.

S&P 500 Index ETF (SPY) – 195 Minute Chart #2

The final C-Wave should find support around $250.50.

S&P 500 Index (SPX) – 195 Minute Chart #3

The final C-Wave for the SPX should find support around 2510.

Bottom Line … Enjoy the bounce here traders, and be on the look-out for resistance in the SLOT.  If my read is correct, the bounce in price will fail there and turn lower for the final C-wave move into support.

Cheers … Leaf_West

 

 

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