$SPX - Update

The fork lines have been useful as support and resistance.  Yesterday, price struggled at the orange fork line for much of the day, and then fell to backtest the yellow support. 

Technically SPX is still in an uptrend as price has broken up out of the yellow fork, and remains in the orange uptrending fork.  Another test of yesterday's high seems likely. 

10min Chart

Silver - Nice Bounce

The yellow support line that I showed on the weekend worked perfectly.  I mentioned yesterday when the yellow line was touched, and bounce expected.  From current levels, I am expecting a decline again, and test of $27 area. 

Excellent setup again on the short side!   

4hour Chart

 

$SPX - Next Week

Some dips on Monday are possible.  In my view, the market may be setting up for a moderate bounce into September 28th.

The first week in October looks weak, but I am not overly bearish either.  I will outline the details, and will have further charts to come shortly.  As I mentioned earlier though, the current European crisis does appear to be heading into a climax, with fears to subside soon afterwards. 

10min Chart

  

Silver - Collapse Resumes - 2012 Target $6.50

Silver has begun the largest leg down now, and has resumed the collapse that started in April. 

My theory has been confirmed as explained earlier this summer, and the recent collapse in Silver and Gold was indicated by the symmetrical patterns.  Fundamentally, the European crisis is nearing an end, and this is clearly reflected by the recent price behaviour of Gold and Silver.  Notice that I did not say "solved", but rather the current "crisis" is nearing an end due to the cycles.  Without a crisis on the near term horizon, there simply is no reason for Gold or Silver to act as a safe haven. 

In coming days many will say that the reason Gold and Silver are collapsing is because deflationary pressures are building similar to the Summer of 2008.  Gold fell in the Summer prior to the Sept. 2008 market crash. 

This view is simply incorrect.  Without a crisis there is no use for a safe haven.  It is just that simple.

Silver target for 2012 is $6.50.        

Daily Chart

The completed symmetrical pattern is shown below.  Silver flirted with the main red trendline several times, and then collapsed out of exhaustion.  Notice that the pattern on the Right side of the Cycle Line is stretched out time wise compared to the Left side. 

Price will now "catch up" for that time with a severe plunge down to the 2012 target of $6.50.  The implication of the symmetry is that the entire bull run in Silver will be retraced.

2hour Chart

$SPX - Relative Performance Comparisons

If you have followed my work for some time, then you recognize that I am often mentioning relative performance comparisons between indices.  For example, I mentioned on Sept 20th concern that both Small Caps- RUT and Financials - RIFIN were weakening relative to SPX.  While SPX was flirting with the highs from Friday Sept 16th, the picture was much different for these indices. 

Many times it is the subtle things to pay attention to, and this weakening was indicating at least some type of pullback was approaching.  The strength of the selloff was surprising, and was not picked up by my cycle analysis method which was unusual. 

10min Chart

$SPX - 15min Update

I thought it was interesting that the close was right at the white triangle that I have been charting for some time.  This may be a backtest and significant support level.

15min Chart

$SPX - Volatile Day

On the weekend I said this:

"My cycle analysis has been working very well in capturing the turn timing for major swings.  Weakness Monday may not last long because the cycle analysis looks very bullish starting later on Monday, and especially Tuesday."

"On Friday, price was stopped at the red fork line.  I suspect that a pullback here may only test the turquoise fork line, and then the rally may resume once again."

There was a strong bounce up from the turquoise line into the close as per the analysis. 

I'll size things up in the morning, but I think mkts could bounce strongly from a weak opening.   

15min Chart

$SPX - Similar Bottoming Patterns

The similarity of the recent bottoming pattern compared to mid-June suggests to respect the strength of the current rally. 

My cycle analysis has been working very well in capturing the turn timing for major swings.  Weakness Monday may not last long because the cycle analysis looks very bullish starting later on Monday, and especially Tuesday.

There are several other intriguing patterns that I am monitoring closely.  The price action tomorrow will be important, and I will have further details on that tomorrow. 

On Friday, price was stopped at the red fork line.  I suspect that a pullback here may only test the turquoise fork line, and then the rally may resume once again.

2hour Chart

$SPX - Coiling

A large triangle may be in the works with price action coiling.  There are several trend/fork lines crossing in the 1190 area. 

Today looks quite bullish in my cycle work, but tomorrow looks more problematic (bearish), and so may see a dip after today.  It might be wise to approach carefully as the triangle matures - at least on a short term basis.

30min Chart

$SPX - Triangle Apex Hit - Bullish

Interestingly, on Friday SPX declined with a direct hit at the triangle apex.  In terms of timing, strong reversals often occur at a triangle apex.  In this case that would be bullish for the markets.

The turquoise fork lines that I have shown in previous charts have continued to be useful in outlining the sideways consolidation that the markets have experienced since early August. 

The cycle analysis that I have been using with good success is quite bullish next week. 

As well, Nasdaq 100 has been outperforming SPX, and that is often another positive indicator.   

15min Chart      



Nasdaq 100 has been outperforming SPX as shown in the following comparison, and has been increasing it's lead in recent weeks.  The index appears to be leading up.

15min Chart



$SPX - 15min Update

The turquoise fork lines from the August 29th SPX 15min chart have worked well in marking turning points.  The top was marked with a slight overshoot, and in addition, there was a decent bounce up from the lower line today.

My cycle work called for a decline with peak bearishness centered on today (as mentioned last week).  According to that analysis, the cycle remains moderately bearish until Friday.  Starting this Friday it turns quite bullish again including the majority of next week.

15min Chart

$RUT - Looking Top Heavy

Last Friday, I said that my cycle work was bullish for this week.  That has been accurate with the market grinding higher this week.  Using that same analysis, next week looks bearish particularly early in the week centered around Tuesday. 

This also matches up with the summer 2010/2011 timing similarity that I outlined in the last post.

The small caps hit an interesting point yesterday with a reversal down. 

4hour Chart