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Jason Haver: Bears Make a Stand in US Equities
Bears turned the market where they needed to -- and now there appear to be five complete waves upward at multiple degrees of trend.
Jason Haver    

Last update was a bit tongue-in-cheek regarding my anecdotal sentiment readings, and my personal opinion that there was currently too much bullishness prevalent. I also noted that I felt the top was closer than the bottom for equities, and that wave (5) appeared to be complete or nearly so. I outlined the zones where I felt that thesis would be challenged; bulls were unable to reclaim the key zones.

On Friday, the S&P 500 (INDEXSP:.INX) made a final thrust upward, which fell about two points shy of "Target 2" for the bull count (as noted 2/14 on the daily chart -- at the time it was noted, it was contingent on 1850 being reclaimed) and also fell shy of the bull/bear divider noted on the chart. This now appears to be a complete five-wave rally at multiple degrees of trend, which suggests a meaningful correction is underway. Granted, one reversal day does not a decline make (though it's a good start) -- so the first important support zone for bears to reclaim is the 1839-40 area.

The count not shown (an ending diagonal) was noted on 2/26 -- that option remains possible (if less likely) and would lead to one last-gasp bull thrust higher. If bears reclaim 1839, that option becomes an even lower probability.


Click to enlarge

Bigger picture, there are now five waves up at multiple degrees of trend. This is one precursor to a larger correction.


Click to enlarge

The Dow Jones Transportation Average (INDEXDJX:DJT) is one of the markets that's kept me looking for a top in SPX recently, and the bear count remains alive and well in TRAN. The levels that bears (and bulls) need to reclaim also remain clear and are noted on the chart.


Click to enlarge

In conclusion, this is an excellent opportunity for bears to take control of the market and force a larger turn. All the ingredients are in place -- now it's simply up to the market to either make it happen or to find a way to disappoint the bears yet again. Next I'll be watching whether the decline takes the shape of an ABC or a larger five-wave structure to add confidence to a larger trend change (and then we'll all keep our fingers crossed that it's not yet another expanded flat c-wave -- a favorite poison of this bull market). Trade safe.

Follow me on Twitter while I try to figure out exactly how to make practical use of Twitter: @PretzelLogic.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
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No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Jason Haver: Bears Make a Stand in US Equities
Bears turned the market where they needed to -- and now there appear to be five complete waves upward at multiple degrees of trend.
Jason Haver    

Last update was a bit tongue-in-cheek regarding my anecdotal sentiment readings, and my personal opinion that there was currently too much bullishness prevalent. I also noted that I felt the top was closer than the bottom for equities, and that wave (5) appeared to be complete or nearly so. I outlined the zones where I felt that thesis would be challenged; bulls were unable to reclaim the key zones.

On Friday, the S&P 500 (INDEXSP:.INX) made a final thrust upward, which fell about two points shy of "Target 2" for the bull count (as noted 2/14 on the daily chart -- at the time it was noted, it was contingent on 1850 being reclaimed) and also fell shy of the bull/bear divider noted on the chart. This now appears to be a complete five-wave rally at multiple degrees of trend, which suggests a meaningful correction is underway. Granted, one reversal day does not a decline make (though it's a good start) -- so the first important support zone for bears to reclaim is the 1839-40 area.

The count not shown (an ending diagonal) was noted on 2/26 -- that option remains possible (if less likely) and would lead to one last-gasp bull thrust higher. If bears reclaim 1839, that option becomes an even lower probability.


Click to enlarge

Bigger picture, there are now five waves up at multiple degrees of trend. This is one precursor to a larger correction.


Click to enlarge

The Dow Jones Transportation Average (INDEXDJX:DJT) is one of the markets that's kept me looking for a top in SPX recently, and the bear count remains alive and well in TRAN. The levels that bears (and bulls) need to reclaim also remain clear and are noted on the chart.


Click to enlarge

In conclusion, this is an excellent opportunity for bears to take control of the market and force a larger turn. All the ingredients are in place -- now it's simply up to the market to either make it happen or to find a way to disappoint the bears yet again. Next I'll be watching whether the decline takes the shape of an ABC or a larger five-wave structure to add confidence to a larger trend change (and then we'll all keep our fingers crossed that it's not yet another expanded flat c-wave -- a favorite poison of this bull market). Trade safe.

Follow me on Twitter while I try to figure out exactly how to make practical use of Twitter: @PretzelLogic.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Jason Haver: Bears Make a Stand in US Equities
Bears turned the market where they needed to -- and now there appear to be five complete waves upward at multiple degrees of trend.
Jason Haver    

Last update was a bit tongue-in-cheek regarding my anecdotal sentiment readings, and my personal opinion that there was currently too much bullishness prevalent. I also noted that I felt the top was closer than the bottom for equities, and that wave (5) appeared to be complete or nearly so. I outlined the zones where I felt that thesis would be challenged; bulls were unable to reclaim the key zones.

On Friday, the S&P 500 (INDEXSP:.INX) made a final thrust upward, which fell about two points shy of "Target 2" for the bull count (as noted 2/14 on the daily chart -- at the time it was noted, it was contingent on 1850 being reclaimed) and also fell shy of the bull/bear divider noted on the chart. This now appears to be a complete five-wave rally at multiple degrees of trend, which suggests a meaningful correction is underway. Granted, one reversal day does not a decline make (though it's a good start) -- so the first important support zone for bears to reclaim is the 1839-40 area.

The count not shown (an ending diagonal) was noted on 2/26 -- that option remains possible (if less likely) and would lead to one last-gasp bull thrust higher. If bears reclaim 1839, that option becomes an even lower probability.


Click to enlarge

Bigger picture, there are now five waves up at multiple degrees of trend. This is one precursor to a larger correction.


Click to enlarge

The Dow Jones Transportation Average (INDEXDJX:DJT) is one of the markets that's kept me looking for a top in SPX recently, and the bear count remains alive and well in TRAN. The levels that bears (and bulls) need to reclaim also remain clear and are noted on the chart.


Click to enlarge

In conclusion, this is an excellent opportunity for bears to take control of the market and force a larger turn. All the ingredients are in place -- now it's simply up to the market to either make it happen or to find a way to disappoint the bears yet again. Next I'll be watching whether the decline takes the shape of an ABC or a larger five-wave structure to add confidence to a larger trend change (and then we'll all keep our fingers crossed that it's not yet another expanded flat c-wave -- a favorite poison of this bull market). Trade safe.

Follow me on Twitter while I try to figure out exactly how to make practical use of Twitter: @PretzelLogic.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
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