2007- now comparison

It is still unclear if this is a A-B-C or a -1-2-3 which implies a 4 and 5 to come.
Only after the waves are completed will we be able to say what it has been.

Here is again a comparison between 2007 and now on the weekly:
The divergences between Price / MACD and Price/RSI are to be noted.

On the 1-Hour chart we can see the MACD histogram decreasing: When <0, then there will be a good chance this leg is over, like in 2007. However, it may also just note the top of wave-3 up (if an 1-2-3) and hence a somewhat prolonged 4 and quick 5 may still be in the works.

How do you tell a TOP : I will write a separate entry for that, but for now lets just say that "a top in a particular time frame is in when a new down-trend has confirmed!"

it can still be a large A-B-C

Patience is the name of the game

The waiting out game

Daily: We need to see the MACD histogram turn negative along with RSI(14)>70. We are almost there, but not there yet, in order to call for a short term change in direction

15Min: There is a potential short term trading opportunity here again for a wave down

Let's put wave counts aside: October 2007 v.s Now

Let's forget wave counts for a short while and just look at technicals as a measure of market participants' behavior.

First on the Weekly charts:  2006-08  v.s  2013-14

- Price / MACD divergence
- Price / RSI divergence

both at an All Time High and just following overbought conditions

Second Daily Charts

- Overbought RSI conditions
- MACD histogram < 0
- MACD turning down at the top

worrisome Price / MACD divergencies

The markets can not continue to go up without a break-down!

For the first time since the low of Oct 15, we have Price / MACD divergence in the 2 hour chart corresponding to almost overbought RSI(14) conditions.

What worries me the most is the Price / MACD divergence on the weekly charts (as well as monthly).
This concerns the whole uptrend that begun in November 2012!

Where are we in this uptrend ?

one last push up left ?

looking for that tradable 1-2-3 down

Futures are breaking down in an 1-2-3 fashion

Potential 1-2-3 set up for the down side

We have again Price / MACD divergence, indicating a possible top of some sort on the 1-hour chart

We have a dip in Price & MACD which can serve as a launch of an 1-2-3 set up to the down-side. Usually, we would like to have a daily close below today's low.

More evidence that this uptrend is almost over

1-Hour chart: See count on the chart

10min chart: Detail from boxed area of hourly chart

Conclusion: The uptrend looks like it is almost over

Monthly analysis of 2007-08 and Now

MONTHLY

October High   <  September High 
    ($201.82)            ($201.92)


2007: You can appreciate the divergence between (1) price and MACD, as well as (2) price and RSI.

2014: No such divergences yet

  =>    We expect that we will see a higher - high some time in the future

Is it going to be next month (November) ?

We will wait and see!

Should a higher high take place next week, we will have the occurrence of the divergence we saw in the summer of 2007



WEEKLY

2011: You can appreciate the development of divergence between the top of 3 (high prior to '4') and 5 (high after '4') versus MACD and RSI. Following the topping off, we have a lower MACD and RSI along with a lower price, which displays a bend like this: ^


2014: We did not have a higher-high today!
I hope you can appreciate the similarities between 2014 and 2011 in the '^' bend of the price and the 3rd descending peak of MACD and RSI. Interestingly, at the top of each high, the RSI barely touched a value of 70.



DAILY

I spoke about how this uptrend is a single wave yesterday (Friday 10/31).



The 3 most important things in trading: 1-2-3 set up

A 1-2-3 set up takes place during:

=> a new uptrend,

and/or

=> a C wave.

Note: If you read this prior week's blog, you will see how we were looking for a 1-2-3 set up in the downward direction to call the start of wave C down
This did not happen, despite the divergence we were noticing between price and MACD in SPY, $SPX and ES/ (suggestive of an end to the uptrend).



WHERE ARE WE ?

1). Either a giant single wave-1 up: It would require a sizable drop and then a breakout (1-2-3)

or

2). a wave B: I here show what would confirm such case (below).



CONCLUSION: Wait patiently now until we have clarity