Finally Profit Taking? ~ 11/4/2009

$COMPX 2055.52 -1.80 -0.09% 2,199,386
$INDU 9802.14 30.23 0.31% 1,352,197
$INX 1046.50 1.09 0.10%

HOD SPX 1061 backtest of a break of trend support.

Weekly price actions are turning negative suggesting profit taking after 8 months rally based on debt spending. We have not seen any market correction even after 50%+ market advance since the March low. Last week is a CIT pivot. Even though some of major market price and breadth indicators are misleading to show oversold, we didn't have a price correction.

After the market advance based on debt spending, carry trade, momentum trade, etc, we may finally see a meaningful correction.

The followings are two different scenario wave formations. As shown on the SPX 60min chart, we may see a completing wave (v). As shown on the SPY 15min chart, we may see a start of wave {III} correction. I noted that tentative wave 1 target is SPX 950 - 1000 +/-.

For a less bearish Long Term scenario is that we are in Wave C correction.



What the markets are hoping for Americans to spend until going bankrupt; however, many are already "shopped until drop dead". In addition, the current globalists' agenda is not helping the United States as we are continuing to see "Trade Deficit" in addition to cost-cutting as we just heard "Microsoft" is cutting additional 800 jobs. We are in a long term down K cycle which Greenspan in late 1990s has massaged the cycle to avoid the downturn creating bubbles; therefore, Americans are worse off now than we had gone through the long term down cycle at that time. Of course, that means that the greedy globalists made fortune as we are hearing about the huge Goldman bonuses.

We now have internet and cyber communities through which some are learning realities of politics, economics, and financial conditions. Therefore, bears were right -- but were slaughtered... e.g. Bernanke greedshoot since March. Maybe we finally see a correction or a serious pull back so that many will realize and sober up. For example, we are seeing some of excellent Japanese products because out of pain, they rose above mediocre performances, e.g. GM losing to Toyota. I don't like Microsoft Mouse, another example, compared to Sony Mouse because the performances are clearly distinguishable. Sony mouse can do precision drawing while Microsoft mouth is bulky and terrible with precision drawing. Many Asians and females have small hands, and big mouth is really pain in hand after using for hours. Americans and students need to go through new learning process.

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The Fed Madoff Economic data ~ 11/2/2009

$COMPX 2049.20 4.09 0.20% 2,402,839
$INDU 9789.44 76.71 0.79% 1,546,439
$INX 1042.88 6.69 0.65%

Markets traded to lower TL supports as noted, e.g. SPX 1029 LOD in a short timeframe with a wide range day and finished the day with doji/hammer formations.

Previously shown EW daily chart lower target of SPX 1000 +/- is Wave 1 target area; however, markets are trading at pivotal juncture going into the FED announcement Wed day.

Only way for the EW formation to work for bearish scenario is Extended (v) of 1 of (1) of {3} with wave 1 target of 950 +/- as shown on the 15min chart; however, markets are closed at pivotal juncture, so, I am staring at doji/hammer closed charts with teary eyes.

As some of Americans are now aware of dreadful Fed manipulation of economy and financial amrkets, we now have to wait to see how the Fed Bernanke will do with markets, but so far he is still broadcasting hyped GDP, misleading economic growth propaganda. As Jesus said, we may just have to deal with the power craving FED as Bernanke is continuing to bamboozle Americans and globalists.

Actually, the Volcker early bubble stage which was followed by the Greenspan bubble madness was the beginning of the grand swindle of Americans and the United States as we can see on the VLT chart. http://trend-signals.blogspot.com/2009/10/what-fed-has-done-to-united-states.html

• No More Over-Reliance on Consumer Spending: Volcker

  White House economic adviser Paul Volcker said his meeting on Monday with President Barack Obama focused in part on reducing U.S. economic reliance on consumer spending. Volcker Talks Economy in CNBC Exclusive

• Seesaw moves in the stock market have not discouraged some strategists who believe the market remains in an uptrend, despite near-term choppiness.

Stocks Monday rose early on a strong ISM report and a surprise profit from Ford, but they gave back a triple-digit gain at midday as the financial sector came under selling pressure. But buyers stepped in, taking stocks from negative levels to gains once more. The Dow finished the day at 9789, up 76, and the S&P 500 rose 6 to 1042. Financials ended higher, up 0.8 percent, even as Citigroup, which led the decline, finished lower.

Monday's intraday move though was volatile but mild compared to the sharp snap up last Thursday on Q3 GDP, and the big let down Friday when the Dow lost 249 points after a weak consumer spending report.

http://www.cnbc.com/id/33593806

SPX 60min EW bearish scenario

SPX 60min EW bearish scenario - 50% retracement of 26.5%, 230 points during Jul-Oct 2009.

Regarding Climactic Bottom

Another rule for 5th wave: it can be truncated.

http://investorshub.advfn.com/boards/read_msg.aspx?Message_id=38862678&txt2find=w5


Following the correction period, based on Intermediate Wave 5 scenario, SPX 750/666 truncated or SPX 555 which is normal W5 price length.


Long term analysis

http://investorshub.advfn.com/boards/read_msg.aspx?Message_id=36128257&txt2find=long

Furthermore, the Oct-Nov 2008 bottom is or can be considered as "Climactic Bottom".

I called climactic bottoms on previous major market bottoms, and the Oct-Nov 2008 bottom is one of most volatile climactic bottom which I have seen. We will not likely see another one severe than that anytime soon.

http://investorshub.advfn.com/boards/read_msg.aspx?Message_id=33665846&txt2find=climactic

SPX 60min

The Caveat final count down

The Caveat: Even though markets rallied based on the Bernanke, Obama, and Geithner speeches, we still have potential bad news such as more bad news from the commercial R.E. fall-out and personal credit fall-out.

e.g. Commercial RE loan default and Moody downgrade jumbo loans http://www.cnbc.com/id/29774863/

Markets bottomed at SPX 666.79 for 2009 and NO SPX 555?

Did the Bernanke 60 min interview effectively eliminated bearish sentiment for the year?

The Obama and Geithner speeches also effectively eliminated the bear for the year?

Commercial R.E. loan defaults are skyrocketing.

AP reported "Delinquency rates on loans for hotels, offices, retail and industrial buildings have risen sharply in recent months and are likely to soar through the end of 2010 as companies lay off workers, downsize or shut their doors."
http://trend-signals.blogspot.com/2009/03/final-count-down-3-4-5.html

Commercial real estate loan defaults skyrocket

WASHINGTON: With loan defaults rising, analysts say the struggling commercial real estate industry is poised to fall into the worst crisis since the last great property bust of the early 1990s.

VIX and VXN are trading below 200 dma suggesting that markets will continue the recent uptrend with the subdued volatility. However, the volatility closed above the contracting triangle trendline support going into the Q1 earning reports in April. Also, $CPC/CPCI/CPCE reading are extremely low below 2 year + low. With the commercial RE defaults and more economic and earning bad news, Markets have the excuse to sell-off trading down to SPX 555 target as a final wash off going into mid year.

The final count down 3-4-5 to SPX 555 during the April Q1 earning reports?


Alternative EW Market Price Actions: Final Count Down 3-4-5

http://www.youtube.com/watch?v=0ZkllM8znx4

If markets trade to SPX 555 +/- by mid year, I expect the rally off from the low will be stronger than the rally which we recently have seen.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=36634247



14775











14774

Final Count Down 3-4-5?

Markets are trading at critical pivotal prices which could be ST tops and which could be followed by sharp declines to finish off the final decline into mid year. Because of the recent excessive bullish sentiment, it is difficult to pounce the ST top; however, the 3/6/2009 could become one of the well-known false bottom. VIX and CPC formation is getting ready to explode which I think that it is to upside as markets trade down. Markets will soon confirm or negate the scenario since markets are trading near at pivotal S/R. After reviewing all major market charts and formations and considering other factors, we could see unexpected market actions as we have seen during the last couple of weeks. But for this time, we could see market actions to the opposite side.



VIX and VXN breakout to upside?


Pivotal Resistances:
SPX 830 +/-
DOW 7780 +/-
Nasdaq 1555 +/-
Q 31 +/-

The cyclical bull market will come when markets trade to the final target to SPX 555 +/-, DOW 5555 +/-, and Nasdaq 1000 +/- for the bear market which started in October 2007.




$BKX

$BKX 17.75 reversed at the same time as SPX 666.79 on 3/6/2009 and rallied to 31.05 on 3/23/2009 -- 70% rally from the low which is below the 1995 support at 30. $BKX is also trading near at the pivotal resistance 31 +/-. The bearish case for the major markets is to resume the final down move while $BKX is testing near the low 20, a higher low.

During $BKX is testing the low, the targets for major markets are SPX 555 +/-, DOW 5555 +/-, and Nasdaq 1000 +/-.
________________________________________________________________________

The cessation of the recent rally as the ST Top to resume the final down move:

Posted by: *~1Best~* Date: Tuesday, March 24, 2009 10:37:06 AM

Markets are trading at pivotal S/R which could be a start of a strong move to downside which is technically sound after the recent reactive bear market rally of 20% +/- from SPX 666.79 on 3/6/2009 to SPX 823.37 on 3/23/2009. The bearish case is a long squeeze which is the opposite reaction to the recent vicious rally. A bearish case is, rather than resuming the strong bounce since 3/6/2009, resuming the down move during the Q1 earning report as a final down move.

Resistances:
SPX 830 +/-
DOW 7780 +/-
Nasdaq 1555 +/-
Q 31 +/-

The volatility setup could be a contrarian setup which is signaling a strong down-move, but again markets are trading at all important pivotal junctures.


$VIX and $CPC as of 3/23/2009:

$VIX closed at 42.01 while $CPC is at 0.70 which is the 2 year low (CPCI is lower than CPCE which P/C ratio is saying many are buying Index ETFs)



Thou shall not "lie-to-me" :

Investors can't handle the truth
We've adopted a culture of whining and embraced the 'Lie to Me' mindset
By Paul B. Farrell, MarketWatch
Last update: 6:35 p.m. EDT March 23, 2009

Meanwhile, it keeps getting worse. And our leaders know it, know America is trapped in this insidious "lie-to-me" mindset. They know that if they just "lie to me," we'll let them do whatever they want. http://tinyurl.com/c3lhc5

DOW and SPX very long term analysis as of March 6, 2009:

Best or Worst case scenario: trading in long term consolidation period or continuing death spiral?
The recent market actions are showing extreme bearish actions selling off 58% since the Oct 2007 stop resembling the 1929 and 1973 bear market scenarios. I commented on the comparative market analysis of 1929, 1987, 1997, and 2007 on my comments during 2007; and now we are experiencing the market crash scenario since the Sept/Oct 2008 crash like sell-offs. Many anticipated the market sell off since 2007 going into 2008 sell-off. The current bear market action is well anticipated by many market participants as the market sentiment can be seen in some indicators showing positive divergences comparing to the 2000-2002 sell-off -- money flow in long term as example is showing a positive divergence. The long term positive divergences can be seen on the DOW and SPX long term charts shown below. The customized Trend Strength and direction indictor which I developed is showing over sold condition as it is shown on the DOW monthly. The indicator set on major markets is showing the similar readings. Tested on the various time frame and major markets, we can see it on the DOW monthly chart, after the strong trend during the last 20 years since 1980s for 20 years, the indicators are in oversold level after the major sell-off during 1931, 1943, 1973, 2002, and 2009. This is confirming that markets are clearly oversold and show positive divergence.

The question remains whether we have seen a major bottom for the markets. As commented on my previous cycle analysis, we are now entered into major market correction period since the Oct 2007 as we can see that we are going through major financial and economic crisis such as bursting of debt bubbles bankrupting major banks such as Bear Stern and housing market crash. As noted during the last few years, the crisis which we are facing is expected as we have seen the ARM housing market bubbles and which we are still assessing whether we are seeing housing market stabilization. While it is very difficult to assess whether we have a major market bottom based on the fundamental analysis, we can better rely on technical analysis as it is more objective and mathematics. Based on my market analysis over many years, this is the case that markets do find market tops and bottoms regardless market participants' extreme sentiment. Therefore, in my opinion based on the analytical point of view, I am still holding the view that financial markets lead economy and think that this is the case for this bear market.

Given the current economic and financial condition described above, in my opinion, the best case scenario is a long term consolidation period in LT megaphone RST formation as shown on the very long term charts: DOW 1920-2009 and SPX 1871-2009 as shown below. Given the current market volatility, the long term chart is showing a distorted view as it does not show the market crash of 58% destroying many long term investors' wealth since 1996. Before commenting on the fractal scenario, given 58% correction, the long term chart should visually show the price below the mid level on the chart, but that is not the case in reality, we need to keep that in mind.

As shown on the DOW Long Term 1920-2009 chart, the best case scenario given in the current market and economic condition is that markets consolidate in megaphone RST formations in a long term. DOW has rallied almost 30 years after finding a major bottom during 1931 after the 1929 crash. It consolidated for almost 20 years during the 1970s. Then again, the market rallied during the 1980-2000. We are now in the bear market since the March 2000 top showing a long term RST formation. That is the long term 40 year cycle within the long term 80 year cycle since the 1920s. Considering the market volatility, it is difficult to predict the market direction with 100% accuracy; however, we are likely seeing a completion of the 5th wave correction from the October 2007 top. Based on the long term and short term price action analysis within the context of the fundamental conditions, I see the best case scenario is that markets are consolidating in a long term in a fractal formation of the 1930-1980 long term price action. Hopefully, this is the case, otherwise, we are heading to in death spiral dire economic condition wiping out many small investors' life time savings.

The SP500 very long term chart of Jan 1871 - Feb 2008 shows the series of fractal formations starting from the 1871 inverse fractal formation of 1880 +/- and 1930 +/- market volatility. The price fluctuation is showing inverse fractal formations which are followed by consolidation periods shown as blue circles on the chart. Noted the 50+/- year LT K-cycle of 1870-1930, 1931-1980, and 1981-2030? Based on this analysis, we could be in the Grand Super Cycle of III, not V. Considering the global market actions, the Grand Super Cycle III speculation is also valid. The SPX long term chart shown below clearly indicates that the global markets finished the Impulse wave III in very long term view. However, $NIKK market cycle indicates that it has its own market cycle similar as the Nasdaq market cycle. The Nasdaq does not have very long term data, therefore, the market can be treated as anomaly. Since markets are volatile viewing from the long term range, we may see and should see more government control with tighter regulation as markets can easily be manipulated as we can see through the recent market actions.

In conclusion, in reality, the best scenario which we can expect is the long term consolidation period during the 1980-1930 long term 50 year K-cycle, rather than a continuation of the recent death spiral.

SPX Jan 1871 - Feb 2009 VLT Apex breakout formation: the APEX breakout in 1990s

The SPX retracement chart with EW notations shown below: it is the likely completing 5th formation rather than continuing the recent death spiral sell-off. The recent sharp sell-off from the Oct 2007 is about 58%.

SPX weekly

Another week of financial market doom gloom like rabid dogs and vultures (e.g. C). Distressing markets.
Doom & gloom Bandwagon ~ I commented on the extreme bearish case for many times on my previous comments with the count showing on my ibox for months. Depressing scenario and the projections are obvious as I commented before the regressive scenario going back to 1990s breakout. Commented on the breakouts since 2006 cycle comments. Markets are profiting from shorter hedge funds making billions and trillions. Hyping lower and lower projections.

It is unfortunate to see but I commented on the subject during the last few years that Americans need to re-engineer ourselves like what Japaneses did. However, we are not living in 1990s any longer, but we are living in global economy where many companies are looking for cheaper and efficient products around the world -- so, we need to go through economic cycles as well as readjust global economic cycles.

It's depressing, but I never jump on hype bandwagon drumming hype drum. Market doom and gloom hype is astonishing to say the least and disgusting.

It is quite unfortunate that market regulators failed for decades since 1990s-, however, that was the exact purpose to manipulate bubble and bust to profit from, e.g. Paulson hedge fund/greenspan.

SPX EW Weekly

Market Analysis

Major market intradays are showing positive divergences and we have seen a sharp intraday reversal going into close. As we can see on 60min charts, the market momentum is about to turn positive. This market condition is exactly what I referred to on 2/9/2009 market comments that we need to see an intraday market correction, and ideally, markets are oversold and ready for a continued trend up. However, the sell-off which we have seen on 2/10/2009 after the Geithner speech was unexpectedly sharp taking the markets all the way down to the pivotal supports. Ideally, markets have performed as expected in whole even though we have seen wild swings to work off intraday overbought market condition. And now, markets have bounced up from key supports and as commented earlier posts which shown below, while SPX closed above SPX 800, DOW has not closed above 8000. However, DOW has only 30 components, so, we still have hope for markets resuming the recent vst trending up.

SPX 60min EW chart is updated with the break of lower TL support today; however, the EW formation is still intact as an alternative count. If I think that the wave formation is probable, I would not choose it; hence, I think that we have a good probability that we could see SPX 900. Market forecast based on EW are not trading signals as the formation has alternatives.

Daily indicators are now down because of the sharp sell-off on 2/10/2009; however, weekly indicators are positive; therefore, if we see a continued up momentum making new high off of intraday charts which are now oversold and bouncing up, we could see a completion of SPX trading to 900. Of course, the long term bearish wave 5 of supercycle A-B-C correction from March 2000 to Oct 2007 is a typical wave forecast; however, remember that EW waves are not a precise market trading signals. Having said that, since markets have consolidated for almost three month, we could see a move to expand the trading range; and, I am still anticipating to trade up, not to downside, of course, until proven otherwise which is not difficult. If SPX breaks below 800 and if DOW does not recover 8000 during the next couple of days, markets will revisit the Nov2008 lows. The scenario is bearish, and we could see markets continue to lower. However, I don't think that markets will be further demolished. Nevertheless, we are entering to a shortened OE week, and the week could be tricky as usual. I hope that we will see healthy economic stimulus plans as I think that nationalization of banking industry could be a good strategy. Good luck

_____________________________________________________________________________________________________

After open, markets went into doom and gloom and just when it seems that markets are falling into deep holes, the dark cloud is pushed away, and markets bounced from the supports finishing the day moderately neutral to positive -- a sigh of relief for now.

When the dark doom cloud is going to be away and to stay away is the big question, but I see a ray of hope as markets closed above SPX 800 and Nasdaq 1500, but sadly DOW closing at 7932 refusing to show a sign of hope closing below intensely watched DOW 8000 support -- technically, DOW is a rotten child among SPX, DOW, and Nasdaq. DOW is performing worse than SPX at the moment.

We have intraday ranges around 3%.

$COMPX 1541.71 11.21 0.73% 3.06%
$INDU 7932.76 -6.77 -0.09% 3.09%
$INX 835.19 1.45 0.17% 3.28%

A consolidation day

A consolidation day, after bear-shorts ravished markets yesterday, as noted in premarket that markets are oversold after massacre on 2/10 with an excuse of Geithner initiative. DOW closing below 8000 is a concern and bearish, however, intraday is oversold and showing a sign of recovery. We have a hopeful news going into close that we now have a stimulus package making a progress even though some itemized subprograms need to be further refined and agreed upon between the parties. The sell-off after Geithner speech clearly was overdone and markets were consolidating from the damage.

Markets traded to lower price channel supports: Qs 29.73 and SPX 822 -- DOW 7852 and Nasdaq 1509 which are key support areas. Intraday on major markets is oversold, and markets are trading near at pivotal supports. Short hedge fund pushing down markets at the pivotal supports is not a good news.

$COMPX 1530.50 5.77 0.38%
$INDU 7939.53 50.65 0.64%
$INX 833.74 6.58 0.80%

Market Analysis and forecasts

After the sell-off using Geithner excuse, markets closed near at supports, Qs 30.34, after bouncing off from noted 30.10 S.
SPX 827.16 after bouncing off from 823 S. Markets are now oversold at the aforementioned supports, but with irrational momentum driven market, the pivotal supports should be watched as we have many chest-beating bear beasts.

Today's' market events: http://www.cnbc.com/id/29129662



1Best Market analysis update and forecasts as of 2/9/2009 close

GOOG and AAPL rallied 30%+ since 1/20/2009 bottom performing stronger than most of other stocks. FAS which is 3x (triple leverage) of financial rallied 50% since the recent low 7.64 even though it sold off from $58 to $7.50 in a few months.

We have the first prime time Obama news conference at 8 pm, so, hopefully, we will be a better tone to market actions after a consolidation period instead of severe sell-off which we have seen after 1/6/2009 doji close. As noted on my previous comments, markets are trading at important resistances, so, breaking above is quite positive for inter mediate term. Hopefully, we will see healthy consolidation period and resume moderate market bounce to SPX 900 and to SPX 1000 +/-. SPX 850 is the breakout support. Good luck




Market analysis update and forecasts: 2/6/2009 close

The SPX daily EW cycle formation is based on alternative scenario which SPX is forming a completion of a corrective wave D of a corrective wave "A" of Supercycle "V", VLT for my notation, from Oct 2007 rather than a continuation of a corrective wave 4 of wave "C" of Supercycle "V".

SPX 900 +/- is a strong resistance just same as SPX 870 which I noted on my earlier postings.

SPX 800 is a downside pivotal support which I noted and now as traders are closely watching the support areas: SPX 800, DOW 8000, and Nasdaq 1500.
The SPX 60min is broken above the vst downtrend as alerted a breakout from SPX 850. It traded to SPX 870 R. SPX formed a symmetrical formation as shown on the chart, and is in progress forming a diamond formation trading to SPX 900.

Markets are bearish even though we saw price advance during the last couple of trading days; and, the stimulus program is still being refined and redefined subprograms. I think that markets are already starting to discount the stimulus program and further delay of the stimulus program finalization will negatively impact markets. We now have intraday overbought markets, hence, having a good consolidation period rather than severe sell-off is certainly a plus.




SPX daily is showing a breakout from the intermediate term down trend line. The breakout is confirmed by a positive momentum signaled by daily macd. Going into the Friday rally pushed markets to break out from resistances, I alerted positive divergences. SPX has broken above alerted 850, but didn't close above 870 R after trading to 870.75.

SPX shows less strong breakout momentum than Qs and Nasdaq which are showing opening and closing prices are above the ST down trend lines. Since Qs and Nasdaq is leading markets, we can consider market price actions are to upside.



While SPX 60m price actions provide a better signal to a breakout, the daily price action shown below is yet to improve. 60min price action is now getting overbought, however, we had better market trading volumes during the last couple of trading days. SPX closing above 20dma is also positive, yet, as noted earlier, SPX 870 is a strong resistance. Breaking above 870 is, of course, positive that markets will further advance to 900 and to 950. Nevertheless, SPX is approaching a resistance which could change the wave formation to more bearish scenario if it fails to show strength during the next week. Whether we will see "Valentine massacre" is yet to be clued in.


Qs has broken out of the symmetrical formation with a strong advance price formation closing at 31.37 after trading to 31.51 near 1/6/2009 high, forming a series of modified cup & handle formations which I noted on my previous comments.

Based on a successful triangle formation breakout scenario, the price will progress to 34 +/-. This is a vst positive scenario and a negative scenario wave formation is making to upper trend line resistance and regressing to downside breaking the lower support. Qs/Nasdaq is leading markets and during the next week, whether markets will show a continuation of positive price action is in question even though we have seen better price actions for a bounce lately. Clearly, Qs is giving, at least from a hopeful perspective, us a clue to future market direction. Within the larger price formation, a break of a diamond formation is also in progress as Qs is breaking out of the symmetrical triangle formation. However, if the diamond and symmetrical triangle formation is not successfully complete the vst target to 34 by failing to breaking above RST formation which is an extension price action of the diamond formation, then we have alternative EW counts which will be considered later.

Market Analysis update and forecasts

The SPX daily EW cycle formation is based on alternative scenario which SPX is forming a completion of a corrective wave D of a corrective wave "A" of Supercycle "V", VLT for my notation, from Oct 2007 rather than a continuation of a corrective wave 4 of wave "C" of Supercycle "V".

SPX 900 +/- is a strong resistance just same as SPX 870 which I noted on my earlier postings.

SPX 800 is a downside pivotal support which I noted and now as traders are closely watching the support areas: SPX 800, DOW 8000, and Nasdaq 1500.

The SPX 60min is broken above the vst downtrend as alerted a breakout from SPX 850. It traded to SPX 870 R. SPX formed a symmetrical formation as shown on the chart, and is in progress forming a diamond formation trading to SPX 900.

Markets are bearish even though we saw price advance during the last couple of trading days; and, the stimulus program is still being refined and redefined subprograms. I think that markets are already starting to discount the stimulus program and further delay of the stimulus program finalization will negatively impact markets. We now have intraday overbought markets, hence, having a good consolidation period rather than severe sell-off is certainly a plus.

Market Comments: SPX daily is showing a breakout from the intermediate term down trend line. The breakout is confirmed by a positive momentum signaled by daily macd. Going into the Friday rally pushed markets to break out from resistances, I alerted positive divergences. SPX has broken above alerted 850, but didn't close above 870 R after trading to 870.75.

SPX shows less strong breakout momentum than Qs and Nasdaq which are showing opening and closing prices are above the ST down trend lines. Since Qs and Nasdaq is leading markets, we can consider market price actions are to upside.



While SPX 60m price actions provide a better signal to a breakout, the daily price action shown below is yet to improve. 60min price action is now getting overbought, however, we had better market trading volumes during the last couple of trading days.

SPX closing above 20dma is also positive, yet, as noted earlier, SPX 870 is a strong resistance. Breaking above 870 is, of course, positive that markets will further advance to 900 and to 950.

Nevertheless, SPX is approaching a resistance 870 and 900 which could change the wave formation to more bearish scenario if it fails to show strength during the next week. Whether we will see "Valentine massacre" is yet to be clued in.



Qs has broken out of the symmetrical formation with a strong advance price formation closing at 31.37 after trading to 31.51 near 1/6/2009 high, forming a series of modified cup & handle formations which I noted on my previous comments.

Based on a successful triangle formation breakout scenario, the price will progress to 34 +/-. This is a vst positive scenario and a negative scenario wave formation is making to upper trend line resistance and regressing to downside breaking the lower support.

Qs/Nasdaq is leading markets and during the next week, whether markets will show a continuation of positive price action is in question even though we have seen better price actions for a bounce lately. Clearly, Qs is giving, at least from a hopeful perspective, us a clue to future market direction. Within the larger price formation, a break of a diamond formation is also in progress as Qs is breaking out of the symmetrical triangle formation.

However, if the diamond and symmetrical triangle formation is not successfully complete the vst target to 34 by failing to breaking above RST formation which is an extension price action of the diamond formation, then we have alternative EW counts which will be considered later.

Market Comment

Major markets are trading near at pivotal resistances: SPX 850, DOW 8100, Nasdaq 1550, and Qs 30.80 going into the stimulus plan voting. While daily and weekly price momentum is developing to upside, intraday price action is now showing negative divergence. If market sentiment is healthy and bullish, market price actions can move up with strong advance even with negative divergences. That is not the case as market sentiment is quite bearish and edge. Nevertheless, breaking above the noted resistances is quite positive as the resistances are pivotal for further price advancement to SPX 900/1000. Of course, failing to break to upside market will revisit the Nov 2008 low.

http://trend-signals.blogspot.com/2009/02/stimulus-program-debate.html
Stimulus plan debate was healthy debate making progress to effectively spend the huge amount of money. And it is necessary to take some time to refine and to redefine many details. Hopefully, the debate will continue with healthy and productive modifications and will be approved during the next week or soon.

We have dreaded Eco news in premarket, and how markets will react to the eco news -- probably bearish as usual.





Qs daily chart shows a positive macd momentum; however, market sentiment is very bearish and a break out from the formation is an initial short term directional signal.

I just hope that the next week will not be bloodbath prior to the President's & Valentine's day. We had "Valentine massacre markets before; but, I hope that is not the case.




Qs 60min chart looks like a bee hive with red/greed arrows. As shown on the chart, Qs initially traded above the symmetrical triangle formation; however, today's HOD 30.77 is a strong resistance.






With VLT "A" correction scenario, the following Qs chart is ending wave 5 -- only if the break to upside is valid which it looks to be with low probability if market reacts very negatively with the Eco news in premarket. In any case, breaking lower support invalidates the scenario.

I noted on the VLT corrective "A" wave scenario which is logical than "C" considering the US economic and financial condition. Furthermore, major market formations suggest that markets are in "A", not "C", and Nasdaq has its own wave pattern.