Just about to... 4 February 2013

It seems that after my previous post, the S&P500 appeared to be a little bullish for a while. While it was bullish, the signs are still clear that this rally is really tired out. Over the weekend, even Marketwatch.com posted some articles about this tired bull and the end of earnings seasons this month.  Some European issues yet again seem to take stage, and US data/earnings are a bunch of hits and misses.

So, what do the charts indicate?

A turning point, to say the least...

Here's why:

/ES (S&P500 futures)

What a beauty... Just look at the weekly chart. How this week ends may signal the longer term retracement as price is overbought, and the MACD are signalling a weak advancement into an extreme bullishness. Check out the decreasing volume over the past two months.
The daily chart show a little more, with MACD tapering off fast despite last week's late bull run. Today's sharp return to below 1500 signals a possible blowout top. How today closes can determine if this is a real blowout top. This is where I would be watching the candlestick patterns first, followed by other signals (of my program). You do see an alert for 1490, and closing below this level fulfils the bearish candlestick, etc.


VIX

If anyone has been watching the VIX, it is a good show...
The weekly chart starts this week as a gap up. Two outcomes, a close of the gap or a gap-and-run. The latter would really coincide with lots of downside for the S&P500. Notice the bullish divergence built up over the months in 2012?
The daily chart gave a buy signal last week, and gapped down 4 days later. However, gapping up today, and closing at current levels or higher would signal a gap and close.

Overall, the charts indicate incoming downside for the S&P500. Let's see how this works out...
Meanwhile, keep your powder dry!

The MadScientist


4th February 2013

Note: ALL material posted here is from my personal opinion, and my opinion may differ or change without notice. These do NOT constitute as solicitation, investment nor financial advice. By reading the materials presented here, Readers acknowledge the awareness that the materials are intended for educational purposes only. For investment(s) advice, related decisions and/or actions pertaining to investments, always consult your own qualified financial advisors, brokers, etc.

Charts are from TD Ameritrade Thinkorswim platform