A little rally today, as predicted, but doesn't change anything...

The technical conditions that allowed me to see today's rally last Friday also doesn't give it longevity. There is also a bullish bias to the last day of a month, and sometimes to the first two days of a new month, so we could stall for a day or two here, but the market is still in deep trouble, so I don't think longs will be rewarded....

Another Bearish chart....the Transports..

This index is used for Dow Theory Analysis..It's now rolling over...

Read the comments on the chart, there are three separate bearish principles at work here...

Monday will be a repeat of today....

We are short term oversold and nearing the Fibonacci 62% retrace of the lows on the 20th (on the $NDX) so an unimportant bounce is likely Monday, followed by more declines. Next week will be a good one for the bears...

Where we are now...(10:00 A.M. central time)

We have been stopped in this mornings rally by the trendline on the chart above, and resting over the trendline shown in the bottom chart. That offers resistance (at 1787.09, to be exact) but I see nothing that says it won't be broken, i.e. the downtrend continues...

Another featured site...

I've added Itulip.com to my links area...Some great information and insights there...Here's the link:

http://www.itulip.com/

Certainly not a boring site!

Market sags as expected..

The markets broke down through their intraday trendlines to confirm a bias towards weakness. They are short term oversold however so a small bounce tomarrow is possible before they resume their downward path...

On a different note, here is an article worth reading:

http://www.financialsense.com/fsu/editorials/willie/2008/0327.html

Jim Willie is a frequent guest author on financialsense.com and has here outlined the smoke and mirrors job that is being pulled on us in the U.S...Great read if you really want to know what's going on, past the spin of the corporate media...

A market in trouble....

Here's a classic snapshot of a trend failing on volume as it rises through it's Bollinger Band range, also with a wedge structure. It doesn't get much more Bearish then that...

This rally looks like it's over

In spite of the historical levels of "oversoldness" on several indicators we have seen over the last couple of weeks, the chart patterns are saying that this rally isn't the real McCoy, and is out of steam...I'm taking a small short position here, if the market moves down further I'll add to this position...

Possible channel on $SPX, also signs of a wedge as on other charts...

A little known indicator on Bigcharts, also a small wedge forming?

You can see on this chart by the vertical blue lines I have drawn, that when the fast volatility line is at a relative low when Slow Stochastics is relatively high, tops often form. Note also the wedgelike appearance of the last few days, outlined in black.

On the upper chart, you can see the same wedge forming on the $NDX 15minute chart...

Seeing Negative divergences on 15 and 30 minute charts

Although it isn't proof of anything, I'm seeing quite a bit of negative divergence on the major Indexes. Seems like they should start to correct soon. We'll see....

Well, O.K., a little higher then...

Market shows strength and heads up to next trendline...this one is at 1817.03 and price action moved just above it...Let's see if this holds so we can get a small correction for a good entry...not generally good to buy the market when it's short term overbought...

Temporary top probably reached

Indicators also quite overbought...Today's trendline at 1809.98...Fibonacci A=B projection at 1815.85...

uptrend officially established

We now have a higher low and a higher high, intraday, so uptrend is real..Market is also becoming overbought so some sort of pullback is likely soon....

Market off for Good Friday

My last post for yesterday forgot to look at the calendar, obviously, the markets are closed today for Good Friday...

End of Day, 03/20/08

The markets looks like their getting ready for more upside, even though the price action is at the $SPX trendline and just above the current $NDX trendline. Short term they are getting slightly overbought and a pullback is possible, but the next bottom will probably be a great buying opportunity (but buy cautiously and in small increments, please!) and ...Tomorrow was the first serious date I had for the start of the up move anyway, although Fed actions may have caused the low to occur sooner (the 17th) and higher than analysis indicated.
I have several breadth indicators that are rather unambiguously saying the bottom is in on the macro scale, it's just a matter of picking your entry point and stops. As I have said some sort of pullback on this incipient wave up may occur sometime Monday, although at this point it's hard to say how long after the open that will happen or how deep it will go...Watch your indicators...

Where we are now...

The recently respected trendline is being pressured again from below, and we have to be vigilant here as tomarrow was considered the be the beginning of the turn date window (with Tomarrow and Monday the highest probability dates) so with the Fed struggling to lift this thing, it could be turning early....watch for a break up through the price range it's in now with volume increasing and the turn is in...

The current value of the trendline on the $NDX is at 1742.69, right where the current high for the day is at 1:45 P.M. central time....

Warning..Change coming...

I am monitoring the market closely now, some of my breadth indicators are flashing that we are at a bottom, and we are close to our target dates of 3/21/08 to 3/24/08. Volume has dried up, and a large move may be coming..if short keep your stops close...

Smoke and Mirrors is all they offer

We're not in Kansas anymore, Toto...

I don't know how many of you are old enough to remember the original production of the "Wizard of Oz", with the then quite young Judy Garland, but there is an uncanny resemblance of many of our Banking industry leaders and government officials today with the the "Wizard" in the Oz epic. For those of you who have never seen this, the wizard was an incompetent phony, who only pretended to control events. Rather like the rooster who takes credit for the sunrise, you know. Smoke and mirrors is what he offered, not leadership.

....and so, the parallel with the Federal Reserve. The idea that lowering interest rates will have any effect at all on this economy is ludicrous, as it's the availability of credit, rather than it's cost, that is sinking the ship.

That availability, in turn, has been reduced greatly by abuses, allowed and even abetted by the same officials who now profess to want to "help" or have "solutions". The very thought that these people are still in charge after what they have done through greed and incompetence should make your blood run cold, it certainly does mine. A tragedy of first magnitude is manifesting itself. This is controversial, but it is hard to not come to the conclusion that our entire financial system (and probably the government too, no surprise) is saturated with people that are barely distinguishable from common criminals. Enron was apparently a warm-up, and now we see the entire banking and financial system has been running on Enron-like ethics for years....and now the day of reckoning is here...

However, there is something we can do about this. Remember, don't forget to vote and be politically active, get involved, it will be much worse if we give up...Be strong, be realistic, and be an example of high ethics to others, as that's the key to personal survival in the storms to come, and to turning this country around...

Best of luck to you all,
Mark Lytle
Houston, Texas

End of day, 3/19/08

Most of yesterdays gains were given back today, with the smart money at the end of the day putting the markets almost in a free fall. With the Federal Reserve baloney (polite way of saying it) out of the way, the markets are free to seek their natural level now, which is generally still down. Be mindful that a bottom could form by the end of the week, or early next week, as outlined on this blog a ferw days ago. Bears should be relieved, however,as for the short term, it's going their way...

Volume drying up...

Unless the Fed can pull some REAL magic, this rally is faltering...up volume is drying up rapidly at the attempt in the last hour to exceed the highs of early this morning..We'll see what happens next...

Where we ended up...

We ended up with a spectacular rally, but $TRIN is still very low and put/call ratios have moderated greatly. We are right at the point on both the $SPX and $NDX where the market could turn back down or confirm a bottom. Several breadth indicators are giving contradictory advice as that often happens near bottoms... My feeling is that we have a little more work to the downside to go, and the averages will be repelled by the trendlines one more time. Supporting this, is that volume declined sharply as the rally proceeded today, and short term sentiment has reached nearly extreme (euphoric) levels. At best that suggests a pullback tomarrow, but that isn't enough information to confirm or deny that a bottom has formed. I am skeptical, however, as I saw quite a bit of manipulation in the price behaviour today, and breadth was actually rather poor....

One more thing, the $NDX to $SPX ratio is at a relative local high, and that happens more often at local tops then at local bottoms....

Where my recent visitors to this site have been from...

It's fascinating to see the World Wide Web do it's thing....Currently, 1500 hits a month and GROWING...not bad for a new site...we try to give the average investor valuable information here....

A maturing sucker rally, if ever there was one...

Again as $TRIN and the hourly put/call ratios sit at low levels (bearish), market action approaches the current trendline...After the Fed announcement, I would expect a pretty good retreat ....Although there could be a short "pop" after the announcement, somewhat above the trendline, before it fails....

Tuesday after the open, rally should be unsustainable

Now a few minutes after the open, I am seeing instantaneous $TRIN readings in the neighborhood of .3 or so.

If it stays in that area very long, look for the rally to fail....

In spite of the FED actions, I expect my time and price targets to hold....

Expecting $NDX to bottom near 1600...

I can see Fibonacci projections down to just above 1600, and there is Exponential Trendline resistance near there as shown in this Trendline Chart...Ideally this should happen by the end of this week...

Monday, 3/17/08 premarket...Downleg gathers steam..

Looking at futures, The next downleg truly started Friday, and gathers steam today...

Market bounces away from Exponential Trendline on Volume

It appears the market dropped away from the trendline it has been respecting, on volume. I am anticipating a continual erosion in prices towards our target dates derived in the earlier posts..

Trend change days (top and bottom picking) part 3

The final method I use is also a Fibonacci method, mentioned by a variety of authors.

Basically you count Fibonacci days backwards from a "target" date and see if it confirms that date by producing alignments of tops and bottoms working towards the past from a presumed future turn date. For those unfamiliar with Fibonacci sequences, you are looking for turns on 3, 5, 8, 13, 21, 34, 55, 89, and possibly 144 trading days from a presumed target.

Note that all three charts line up best with a 3/21 or 3/24 target date. Is that it?

Possibly, but remember the Federal Reserve meets on the 18th and they are desperate to lift this failing market. The Fed is one force that can throw this count off, although there are others. Always use money management techniques as your first tool, and technical analysis as your second and lesser technique. The market can undo the best analysis you can do. That said, there is pretty good convergence on these three techniques...

By the way, another caveat is that having three "close" date target ranges does suggest this could be a "multiple" bottom, slowly grinding sideways from the 3/19 to 3/28 date, so a true and unmistakeable "bottom day" during this time period may be elusive, so be careful!

Trend change days (top and bottom picking) part 2

The second technique is one mentioned in Dynamic Trading by Robert Miner. It uses the time duration of previous swings to calculate the duration of the current swing. I prefer to weight the swing in the same direction two swings back more heavily then the swing in the same direction immediately previous to the current one.

For the three indexes shown so far here is the swing duration in days for the first swing and the most recent "high" day to count from:

$INDU 33 trading days 2/01/08

$NDX 9 trading days 2/01/08

$NYA 33 trading days 2/27/08

Now extending by various Fibonacci ratios from the high dates you get dates like these:

Index Ratio Result

$INDU 1.000 3/19/08

$NDX 4.236 3/26/08

$NYA 0.618 3/26/08

That's the result for using the "first" swing from the highs of last fall.

For using the "second" swing I get the following dates counting swing durations both from the nominal tops of these index and also from the second lower tops in each case:

Index Primary Top: Ratio Date Secondary Top: Ratio Date

$INDU .5000 3/25/08 1.272 3/26/08

$NDX .618 3/25/08 1.272 3/27/08

$NYA .236 3/21/08 0.500 3/19/08
$NYA 0.618 3/25/08

Using these methods, a consensus of around 3/25 - 3/26/08 seems to be emerging, again with a somewhat less popular option of 3/19/08 - 3/21/08

Trend change days (top and bottom picking) part 1

I use three coupled methods to highlight days when the trend can change. The first method uses my proprietary Exponential Time Nodes and Exponential Trendline Crossovers. Here are charts for $INDU, $NDX and $NYA. There is a congruence of dates in the 3/21-3/24/08 timeframe, also 3/24-3/26/08 timeframe, and a weaker signal around 3/28/08, by these methods. Compare the three charts and you will see overlap of these dates as represented by the .5000 and 1.000 Exponential time nodes and Crossovers on these dates.

Is a bottom close? Yes, but a few days away yet...

This image shows how obviously close to a bottom we are...In a subsequent post I will give a hint as to when I think this might happen...

Rally probably failed today...

With narrow breadth, we show here the high of today and the close plotted for the $NDX. This is what rally failures typically look like...Watch the futures tomarrow morning for additional confirmation...

Also, compare this chart with the same chart plotted Tuesday (also last Friday) and see the difference...

Where is the $NDX going before a MAJOR bottom?

Notice that this monthly chart of the $NDX has Bollinger Bands in the mid 1500's area, and it looks like it will be approaching 1600 for next month's "candle". Compare this with the chart of the $NDX plotted using Logarithmic Time (go to Tutorials section). Both are showing a similar lower limit. Not proof of anything, but worth watching.

Also, by the way, Point and Figure charts are projecting a target of 1630...

Logarithmic time - $SPX

Here we see that the $SPX has fallen below an important trend channel but has stopped at a precomputed trendline just below that. It may be splitting hairs but it could bounce weakly back up to the blue lower channel line and then fail and continue down. Several indicators I follow leads me to believe that weakness is the name of the game for the near future, so such a scenerio is reasonable...Just for a sense of perspective, the 0.00000 point at the lower left corner of the graph represents the date, October 10, 2002....

$NDX after today's rally

We're approaching a trendline that has stopped rallies in the past. Market is quite oversold, but I doubt this rally signifies that a major bottom has been reached

I wil be out of pocket the next week or so, traveling...

I should return on the 10th or so...