BullBear Trading: Stock and Financial Market Technical Analysis

Some market technicians possibly calling a top here...



I know that Steve Hochberg at Elliott Wave International is calling a top near here,

and here are two other sites talking about tops:

http://www.safehaven.com/article-14518.htm

http://www.marketoracle.co.uk/Article13552.html

The second guy is using Fibonacci Time ratios, which are occasional useful, but I have found them too infrequently to be generally usable. They can work, however.

My trendline work suggests that both the $NDX and the $SPX have the right characteristics by my system to be at a top, we'll see what Monday brings....

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Comment by Mark Lytle on September 21, 2009 at 1:18am
Mea Culpa. It's late, 12:17 A.M. and looking back no, the $SPX is not in Gap resistance. We'll discuss more tomorrow (later today).
Comment by Mark Lytle on September 21, 2009 at 12:40am
True, there's not a lot on the $SPX. The $SPX is sitting at a Gap resistance.
Comment by Steven Vincent on September 20, 2009 at 9:59pm
That is interesting. So the larger the red bar indicates that there was high volume but little price movement at that price level?

I can see what you are saying about momentum. With regards to congestion I assume you are speaking of horizontal price resistance. I see some on your q's chart but there's not a lot on the SPX here.
Comment by Mark Lytle on September 20, 2009 at 3:27pm
It just delineates congestions zones where a great deal of volume resulted in very little price movement. We are approaching that now on the $Nasdaq. The $Spx shows something similar but not as extreme. The $Nasdaq is often the first to change trend, however. Again, I am not calling the top per se, but you have very heavy congestion right overhead, overbought weekly indicators, and momentum is at best flat or slightly declining..look at the MACD histogram. The market could travel slightly higher, but if it were really to traverse all of this prior overhead congestion, then we are on our way to the moon.
Comment by Steven Vincent on September 20, 2009 at 3:13pm
Please explain that indicator. I am unfamiliar. Thanks.
Comment by Mark Lytle on September 20, 2009 at 2:49pm
Here's another way of looking at resistance....Volume by price on the QQQQ's:

Comment by Steven Vincent on September 20, 2009 at 2:47pm
I think we may not get a top until there is some real capitulation and all the bearish sounds are silenced. From a contrarian pov, that's when you could start to look for a top. Also, we should define what kind of top we are talking about...short, intermediate, long term? Pullback in an advance or trend change?
Comment by Mark Lytle on September 20, 2009 at 2:16pm
I haven't called a top, per se, I'm saying it meets some criteria I have. Also it hasn't broken yet through the resistance, that I track, though it might....
Comment by Steven Vincent (test) on September 20, 2009 at 1:55pm
While there certainly could be a top here I think that to call one at this point would be pure speculation and guesswork. Picking a top is not advisable. There is some evidence that we are seeing the acceleration of the bull trend rather than its fading.


The scenario remains unusually bullish. We have an upside breakout of trend resistance on strong volume following a technical failure of two alternate rising wedge formations and RSI having undergone a range shift and breaking a downtrend. Price should either reverse sharply early in the week or see upside acceleration with bear capitulation and sideline money chasing the rally. In the latter scenarion I would look for RSI readings of 80 to coincide with the long term bear market downtrend line around 1115-1130 as a target. The breakout could certainly be a bull trap however and a reversal and breakdown of the rising wedge could happen but it would need to happen fairly soon.

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