Directional Analysis

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.

Some times, just like in life, the markets get to crossroads. And just like you wouldn’t know what a person’s path will be until they start walking, I can’t say just yet which way this market is going to go. The beauty of technical analysis is that I will know the soonest the market makes a move, and I will make a video then. Until then, this is a Top/down analysis of the S&P futures since is the last day of the month.

The Indices continue to break down after every consolidation.  We can see in all the Indices that they are setting up for something big, something that will go longer than expected.  In this video I show how there is only consolidation areas and then break down and how all the Indices are just following one another. In the shorter term there might be another consolidation in the form of a ABC up before it continues the waterfall. Watch this video and see what I am looking at.

The Market is doing what its suppose to. This pattern can be brutal, especially in the way down. The markets emotions are higher on the way down, so expect for this pattern to be complete in about two weeks or so.  As far as Gold and Dollar, they are the only sectors that have a bullish outlook from my perspective. Gold also got Goldman Sacks blessing to go higher. So be ready for the volatility and the drama.

A continuation wedge has formed in the past month or so, it can be seen in most of the major Indices and some individual high beta stocks. So, What does this mean?  Well, the first thing is, we were on a down move before this pattern formed, so what does a continuation pattern do? just what it name suggest !  Watch this video and see what I look for when these patterns are form.

The direction is still to the south. Now that the quarter is over the damage has been done and  the big companies will start selling to make sure the minimize the risk for the rest of the quarter. The target is still farther south. The next update will review the targets I have predicted a couple of weeks ago.