Seeking Alpha

aarc's  Instablog

aarc
Send Message
  • The Test Of Time 0 comments
    Aug 7, 2012 5:08 AM

    SnP500 is now at the Critical Resistance of the Head and Shoulders Neckline as illustrated in my Comment of July 30:

    - g14.picoodle.com/ltd/img14/5/7/30/aarc/f...

    That was last week. As of today Spx is already going past a day more than the 2.00x TimeLine (Blue Up-arrow) which means that the bulls may be running out of time as many Traders and Investors also consider TIME = MONEY.

    This is another way of analysing the patterns (this one is updated to today):

    - img14.imagefra.me/i587/aarc/141u_d1c_ubk...

    The important parts to consider are the Sine Wave being formed by the MACD and the Low-Teens Gestation of the ADX Indicator. They both fore-tell a strong vertical move - either to the UPSIDE or DOWNSIDE. The Weekly and Monthly Charts are also in their Low-Teens gestating for possible strong move either to the upside or downside.

    As the two charts above show: SnP500 is approaching a critical stage on the daily charts with the bulls still having a small edge against the bears. Likewise, the hibernating bears will have to prove their mettle with the Head and Shoulders Resistance. Until then, this is still a toss-coin trade.

    For the Bears:

    - img15.imagefra.me/i587/aarc/141u_e38_ubk...

    The wavecount for the bears is a little bit iffy since the Zigzag followed by a Flat combination is a rarity. The Double Zigzag Count violates the property (or character) parameter for an X-wave (which consumes much less time in vast majority of cases) so it is of lower-probability. But then again, let the market decide.

    ----------------
    Trading Strategies:

    In a Highly Bi-polar Market such as the one we are in now (since Feb, 2011 as illustrated in many charts in previous instablogs) Trading Strategies could spell the difference between making money or losing big...

    I bought SSO again using the 30min chart Divergence Buy Signal per last Instablog (also provided several examples of how to enter Divergence Buy Signals in Comments last July 24 to help those not well versed in Technical Analysis). I sold 1/3 of Swing Trade positions on the first intraday rally (just in case the Zigzag + Flat actually works at that time) and hold the rest. Will sell some more at or near the Double Top Resistance and hold at least half of positions for the Bullish Count. 1460.32 is the Nominal Target for a 1-2-3-4-5 for the iii-rd wave rally and 1545 the Final Nominal Target for a Complex 1-2-i-ii-1-2-3-4-5-iii-iv-v-3-4-5 Spiral Meltup. Intraday Wavecount since Friday last week are still very favorable for the bulls. But don't discount the possibility the bears will win as the bulls are taking in too much time Climbing the Walls of Worry. I will be using Trailing Stops on the other half to protect paper profits per SOP Trading Strategy.

Back To aarc's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Most Commented
  1. Merry Santa Claus Rally ( Comments)
  2. The Acid Tests ( Comments)
  3. Sticks And Stones Part III ( Comments)
  4. Back to Sept 2008 ( Comments)
  5. Global Outlook ( Comments)
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.