mkay, I am back to blogging after some great time "off", bulilding bicycles, exploring Linux, meeting MORE hotcopperites (hiya pwillow :)))), hacking blackberries (the electronic, not the prickly variety, though I have done enough of the latter in my youth :))
Here's wot I've written on the monthly SPI chart alone... bit of stuff on Elliot Wave and general stuff... will be tackling the lower timespans over the next day or two...
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Happy 2010 Everybody (at least from a round-eye perspective... chinese new year Sooooooon)
In retrospect, despite my questioning as to whether it was time to short the indices, the XJO at least responded with a resounding NO....
Sure, a supposed light volume push, but ultimately it is price I am chasing not volume here.
This first post will concentrate on the monthly, big picture view, and subsequant posts on the matter today/tonight will tackle the lower timespans.
Monthly:
Interesting... Firstup... we have at last made new highs after the last three months of unknowingness.
Coupled with the new highs is the interesting fibonacci retracement level of 50% around current price level give or take a few points.
Price has cleared the 21 period moving average quite well.
Further stuff... More and more data is coming through on this time span which is great for the indicators that I commonly use.
MACD Both the fast (blue) and slow (Red) lines are pointing up, and have strong seperation. Heading towards that zero line which will provide a bit of resistance once they get there.
Stochastic Now into the overbought area though the usual... these things can remain overbought for some time and this is the first entry.
Some further points This is the first time in my career as an analyst (no not my CHOSEN career, I wish to be a trader, but so far the analysis is winning hands down :) ) that I have "called" a monthly chart, which I have been doing so since about the march lows, though not here.
Be it right or wrong, I am applying what I see on the monthly to what I have seen and traded on lower time spans, making the ASSUMPTION that fractal style correlations will occur, that is, if a particular pattern or setup or price movement occurs on a this timespan, then I EXPECT that there will be similar outcomes and price movement as a result,as have occurred whilst I have been watching similar patterns and movements unfold on lower timespans.
Why am I saying this?
Well...
watching lower timespans in similar situations such as this I actually beleive that we are now in a situation where price MAY, on this time span (beginning in the next bar or two, so we are talking in the next month or two), be about to fake to the downside, or possibly go further, and make an attmept at previous lows.
This is based on the following observances on lower timespans, this instrument and others.
IF we are in a downtrend on this timespan...the first time price gets above the 21 period Moving average and holds, price generally ducks down below the average again.... If one is in a downtrend...
I cant really tell, over decades, which this monthly timespan should really be applied to... what price has done historically... for all I know based on the small snapshot of data I have going back to 2007, we could well be in a major uptrend over the last few decades, and this is something I guess I must pursue.
Okay... so that is point number one... we are now in a higher probability area for downside before major upside... but NOT YET.
Another point worth noting here, which I will go into more detail in the next post when I rip apart the weekly, is the previously mentioned 50% fibonnacci retracement level, AND some conjectures on Elliot wave...
Now I have long held the possibility that what we are seeing in the monthly is basically a 5 wave structure down,
Wave one being the first dip, marked on the chart as A, Wave two being the reaction up wave marked as B, and wave three being the remaining major decline into the march lows.
This then suggests that the rise up from the march lows is wave 4... According to Elliot wave theory, wave 4 cannot close in the area of wave 2.
The wave 2 area starts just above the 50% retracement level. Roundabout 5017 on this chart.
If price holds above this area in the next month, hmmm the 5 wave idea must be re-addressed and negated.
And of course, if price doesn't do that, well ahh... we would have to be getting close to the end of wave 4.
Now though never accurate, wave 5 is touted as oft being similar in length to wave 1... Wave 1 is roughtly 1800 points... 5000 less 1800... 3200... roughly 400 points above where daily divergences sugggest a downside target could be.
but... in the meantime... this timespan is still on the up so short at yer own peril based on this chart.
(20min delay)