Weekend commentary
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2.10.01
SPX this week:
SP 500 mags (Left side is magnet horizontals, right is magnet trendlines)
SP recent mag trendlines (Magnet trendlines from 1990 on)
SP 500 close up (SPX recent mag tlines in a close up perspective)
Forest:
Horizontal mags
From 1.07.01 commentary: SP 500 is sticking to 1300 here and it must hold If it does so the upside target starts at 1360 (quarter zone) then 1420 (very important neutral zone) and 1480 (quarter zone) would round out the upside targets for the coming 3-6 months. Longer term target of 1539 (regular mag). If 1300 holds I foresee a year of trading between 1360-1480... very much range bound.
If 1300 is lost the downside targets start at 1266 (neutral zone) then 1231 (weak mag). If these fail the downside gets very nasty... 1155 (quarter zone), 1080 (neutral zone), 1004 (quarter zone) and 932.2 (regular mag). If the lower areas are tested (1155-932.2) the key will be the reaction of the SP 500 to the 1080 neutral zone. If it holds well it is signaling a likely return to 1300. If it fails the view shifts to 932.2.
2.04.01: The buy below 1360 positional trade (last Monday entry) worked out on the bare minimum hold time and not a day longer. Friday's action of breaking 1360 decisively shouts of a 1300 mag retest.
Not a whole lot to add to the above commentary. 1300 is VERY pivotal.
Longer term and key magnet trendlines
From 1.07.01 commentary: Since October the SP 500 has broken through four of the 1980's mag tlines and a key trendline from 1996. In addition to that the last two magnet trendlines have been downtrends. Basically this is telling me 1) be cautious with longs until the 1980's trendlines are regained and 2) be cautious with longs until the overhead downtrends are taken out.
A look at the horizontals and tlines combined shows big time overhead from 1360-1420. Getting up through this area is going to take a very strong bull push.
2.04.01: Last week's key mag trendline cross marked a high and Friday's close was a magnet trendline cross sell signal (close below cross day(s) low). Indicating a sideways/downward market into the next important cross which hits around the 16th of this month. It is a tri-mag trendline cross in the low 1340s. The trendlines which cross are noted in gray on the Market Magnets Spreadsheet
Also, the bulls failure to touch the low 1390's key mag trendlines was a bearish signal. Essentially it showed the bears are much stronger then expected as they defended their territory with the front lines.
The action into the 16th is pivotal based on the key tri mag trendline bisect. Up into the cross would be bearish. Down into it... bullish. The crosses generally reverse the short term trend. As this is a quite unusual cross (first mag tri cross I have seen) I feel it will carry added significance. Therefore, a good hard down week would be just what the doctor ordered for the bulls, IMO.
Sideways week would have a lean toward bearishness. Reason: the dominant trend is currently down, a sidways action is considered bull win in a down market. Cross reverses the current trend, hence sideways action would be bearish.
There are two other key crosses this week involving 1980's trendlines. First is Monday, second Thursday. Friday's tri mag trendline bisect overrides the others IMO.
Chart Pattern
1.21.01: Weekly chart shows a definite downtrend channel which is being challenged for breakout. If it holds resistance the implication is a move below 1200 to test the bottom of the channel again. The bottom of the channel is valued at 1179ish this week and moves down at 9 points per week thereafter.
2.04.01: Downtrend channel breakout held last week. But the weekly bar indicates a top is set and a likely return to test the channel top to occur soon. This weeks value of the channel top is 1318.
Topping pattern is set up in the weekly chart. Shooting star top was confirmed with Friday's close. Chart pattern is bearish.
Indicators
From 1.12.01 commentary: The 89.3.5 stochs still look very good for a bottom. Weekly indicators continue to improve. Indicators are bullish.
2.04.01: The 89.3.5 stochs should be tracked closely. The pullback should not breach 20 and best if finds support above 30. If 20 is broken the bear is going to leave tracks all over the market.
Weekly indicators continue to show improvements. No sell signals there.
No change on the 89.3.5 read. The weekly indicators rolled over last week. Will watch them closely for signs of positive divergence if we retest the December lows.
Tying it all together
Forest points towards erring on the side of caution for both long and short side. No targets this week. Action into Friday's cross is my major focus.
TREES:
S&P recent magnet trendlines
Two crosses which do not show on the recent trendlines chart occur this week. They do not show because they have 1980's trendlines as part of their cross sets. They point to a likely bottom Monday followed by a rise into Thursday. This could be the last chance to make money on the long side for quite a while if it does play out this way. Up into Thursday would set up Friday's tri bisect to form a very solid top.
1340's strong overhead.
Chart formation/bar pattern
2.04.01: Wednesday formed a dark cloud cover (topping bar) confirmed by Friday's close below Wed low. Strong lean toward downtrending action early this week.
Nothing to add.
Indicators
Very oversold and set up for a buy signal.
Tying it all together
Will be looking for the action outlined in the recent magnet trendlines section.
Nas 100: Nas 100 mags Nas Comp Weekly Gartley
The 10.23.00 to 12.8.00 trendline is quite important. (see Market Magnets Spreadsheet for day to day value of said trendline) If it holds support then the pullback is just a simple return to retest a broken downtrend. I would like to see it just sniffed and move up immediately off of it. Continues as a day to day market.
Short term indicators set up for a buy signal on any given day. 89.3.5 stochs broke through 20 which is a strong warning shot from the bears. Be careful out there (if long).
Dow 30: Dow 30 mags
2.04.01: Likely to pullback from this area. Very much standard stuff here after reaching a target. Most likely pullback is to the newest mag tline in the 10670 area. Could be played on the short side if nimble. Best long term technicals of the big three indexes (SP, Nas and Dow being big three). Therefore, I like Dow best for longs if/when pullback finds solid support.
Trendline is a higher then 10670 now. Still looking for it to be tested. Anchors for said trendline: 10.27.00 to 1.25.01.
Russell 2k: Russell 2k mags
2.04.01: The 515 target was hit last week and the Russell immediately sold off. I would have preferred it tested the area for a longer time. 470-480's look likely to be retested.
No updates.
BKX: BKX mags
I initiated a long BKX position on Friday. Stop is close below Friday's low. Mag quarter zone support is right here, short term technicals giving buy signal and a bottom type bar formed on Friday (requires verification of a close above Friday's high).
CRB: CRB mags
The 222s still look likely. A "must hold" type of area for commodity bulls.
BTK: BTK mags
BTK has a 3 day fin is the main focus here. Buy close above 613.1, sell close below 580.9. Fits nicely in the magnet trendline scheme of things. The retest of the downtrend on 2.05.01 has marked the bottom of the current downswing. A break north through 613.1 (on closing basis) would signal a move to the overhead uptrend in the high 600s. A break below 580.9 (on close) would be a return to trendline which is not necessary at this juncture, thus bearish. Signals a move down to the 522.8 regular (horizontal) mag at a minimum.
SOX: SOX mags
From 2.04.01 commentary: Much like the SP the SOX top last week did not quite reach the magnet target. Looking for a move down to the low 600-630ish area. Will be a day to day read and I do not like long or short SOX at this point in time.
From 2.06.01 commentary: When this bottoms it has potential to spring back in a very fast manner.
No updates.
IIX: IIX mags
Downtrend retest likely this week. They are very close to Friday's low. Failure to hold and immediately bounce signals a move to the upper 220-lower 230 area.
SP 500 Weekly fins: Weekly fin chart
2.4.01: Bottom of the fin range was very stiff overhead. Retest of yellow downtrend likely. Bulls should not like this chart.
No updates.
SP 500 Weekly forks: Weekly fork chart
The uptrend fork has a higher significance level due to it's more logical anchors, IMO. Not watching this chart to closely. |
