2009-04-09 Market Watch

Today the market jumped up massively and formed a major accumulation day.  On the following wave-counting chart, note that: wave B is confirmed to be completed and SPX is in 3 of C now; if this is true, then the next target is ~880; assuming the length of A and C are the same, the upside target is 946+ which is close to the 200-day moving average at 993.73; EMA50 at 805.75 is likely a support instead of a resistance now.

SPX daily (inversed) close up

On the following weekly chart, one can see that the volume keeps declining while the the market got higher and higher during the past five weeks. This is not a sell signal but seems like a bear market sign.

SPX weekly

Note the MACD on the daily chart: the current buy signal was confirmed on 12 March; currently the signal is still buy; once the signal line crosses over the MACD and gives a sell signal, one can start to short.  In the past there were several days of delay however the reward/risk is huge.

Here is ES hourly chart.  Assuming ES is in 3 of C, the target will be 875.  Moderate pullback is possible but significant downturn is unlikely.  The previous three pullback setup is: (1) RSI got overbought, MACD gave sell signal; (2) small pullback, may or may not touch EMA50; (3) rally and formed a higher high; (4) at the same time both MACD and RSI showed negative divergence; (5) MACD gave sell signal, pullback started.  The beginning of the new trend is marked by a few times of RSI oversold and buy signal on MACD.  Currently there is no MACD sell signal or any negative divergence, so the uptrend will continue for a while.  If it pulls back to 830-835, that will be an excellent entry before the next significant downturn.

hourly chart 2-hour chart

XLF seems a good buy on pullback at $10.  FAZ has no value to trade and has become a falling knife.  Get it out.

XLF hourly FAZ hourly

Miscellaneous:

SKF daily SKF hourly  GAME OVER

VIX daily: volatility is declining.

EUR/USD daily hourly: downtrend will continue for some time.  Where will the stock market go?

RKH daily: broke out with good volume.  Should pullback a little bit and continue the rally.

DXO hourly: The trend is still up,  and the upside resistance will be take out.