Directional Analysis

Some times there is not enough data in the market to be able to call the direction. Now that I have the data, here it is!!! My bias is still to the down side. We are hitting a major wall in the form of  a down trendline. There is only two things that could happen at this time. 1.We can break through and have most people be right about the new bull market  OR 2. We can reject the trendline and confirm all the negative divergence, Elliot wave counts, and contradict most people. Well, I am with the latter. When money manager are saying on national TV that no matter if good or bad news come out the stock market  will go up, that is the time to go short……

The move up above the 1131 resistance are seems to be a fake break out. As far as the technical go, we can not just look at one indicator and think that its all or nothing just by that one indicator. It is foolish to think that a pilot of a 747 just looks at one of his instruments in the aircraft, the pilot has to look at all the instruments to be able to fly the aircraft smooth and safely as possible. The same applies to technical analysis, we can’t just go with one trend line or one indicator. We have to look at the patterns the Elliot wave and the trend to make the right decisions with the least amount of risk possible. Watch this video and see where the S&P 500 futures are doing and what my view is for the market direction.

Once again the economic news came out better than expected. Starting with Fed EX to PPI to Jobless claim and it does not seem to matter the futures are still pushing lower. Yesterday, on the surface, the market seem to stay strong and resilient because it open on the red and closed green. On the contrary! we tested the area of resistance that I have been talking about and we couldn’t take it out. This tells me that the buying pressure isn’t there. So, what happens when you toss a bowling ball up against a roof that will not break? Eventually you get tire and the bowling ball and you have to go down!!! I am not a pessimist by any matter, in matter of fact my glass is always half full. Thats is why I like the markets, you can always make money whichever way the market moves. The only thing you have to do is be like watter and be able to adapt and overcome.

This is video 1 of a three video series. I am making these videos to show the different way to look at the market. Although they may be a little different, they are all congruent on what the ultimate outcome is going to be. Watch all three videos and look for the similarities and what they all have to say for the near future.

Just like the S&P500 index cash and the SPY’s, the Futures have follow the same patterns. Now they are showing negative divergence on the Indicators and Oscillators just like it did back in the movement up in the middle of the summer. I don’t doubt that the out come will be same as before, LOWER prices.

This is just a quick intraday update to show how a trend line and Divergence works for making a probability guess. Its much harder to do this on an intra day basis by the close anything could happen. I do have strong evidence that the close will be much lower and next week even lower…..

To be a good technician, you have got to be unbiased. So this update is doing exactly that! I have had a Bearish sentiment about the markets, but I am an analyst first. I have done an analysis of the two main Indices which gives you the Bullish outlook. This is just in case the markets flip, which more often than not they do. In this video I give you the reasons why the markets could be turning around and the possible area of target if they do turn to the upside.