MTU Weekend Ed. - Monthly Outlook Update (2/28/14 close)

stocks, bonds, USD, gold


Stocks -
The new all time high in SP500 removed the possibility that stocks have already topped in December and supports our assessment that odds favor a top in the March-April timeframe. See It’s TIME (1/24/14) and Chart 1 below.

Friday’s new all time high likely counts as wave (a) or (i) of [c] (Chart 2), suggesting a pullback followed by another upswing to deliver an overthrow (see Overthrow, 2014 (2/14/14)). Support levels for a near term pullback is around MA50 currently at 1821.

There’s the outside chance that stocks topped on Friday, since the minimum requirement (of a new high and a complete wave structure off the February low) for the top is now met. However, the Dow is still shy of its previous high. We are still one month short in time and some index points shy of a larger overthrow (Chart 1).


Bonds -

The two near term tracking counts on the 10Y U.S. Treasury yield are still in play (Chart 3). The 10Y yield is taking its time to decide which way to go.

Under the green count, recent weeks’ rally counts as (ii)-down of [v]-up in the yield space. The 2013 low in yield must hold.

Under the red count, 10Y yield has potentially begun a wave [c] or [iii] decline. The initial target is around 2.25%.

Note that the trend line connecting the 2013 and 2014 yield lows appears to be important at the moment.


USD -
The USD index has been declining for the entire month of February, without suffering technical damage in either direction (Chart 4).

If the USD index rebounds from current levels, near term upside potential points to the 82-83 area before running into some long term resistance (Chart 5).

At the same time, a potential head-and-shoulders pattern is emerging which points to a drop toward the 73 area if it materializes (Chart 4). A failed HS attempt likely introduces upside breakout potential for the USD index with respect to its long term resistance (Chart 5).

Gold -
Chart patterns for gold priced in euro and yen suggest continued upside potential (Chart 6 and Chart 7), particularly if the dollar weakens.

Readings on gold price in USD are mixed. While gold has broken above the 2012-2013 resistance line (Chart 8, red), it is now approaching short term channel resistance (Chart 9). A retest of the 2012-2013 resistance line is likely.

Market Timing Update (2/28/14)

[335pm] SPX update -

[730am] ES update -
Month end. New moon. See charts.

Market Timing Update (2/27/14)

[EOD] Stocks -

[820am] ES update -

Market Timing Update (2/26/14)

[1250pm] SPX update -
tracking counts, see charts.

[7am] ES update -

Market Timing Update (2/25/14)

[EOD]Stocks -
Adding a wedging 5th wave (to match one of the ES counts) to yesterday's EOD list of near term tracking counts. See charts.

(black) EDT 5th wave
(red-alt) a post triangle thrust (top, for now)
(blue) a flat / triangle
(green) initial waves of the next upswing

[735 am] ES update -
potential wedging 5th wave. see chart.

Market Timing Update (2/24/14)

[EOD]Stocks -
Real or failed breakout today? Interesting near term possibilities, see charts,  including,
(red-alt) a post triangle thrust
(blue) a flat / triangle
(green) initial waves of the next upswing

[730 am]ES update -

MTU Weekend Ed. - Short Term Update (2/21/14 close)

We observed in Overthrow, 2014 (2/14/14) that SPX was approaching the end of a five-wave advance since its February low. Indeed, stocks pulled back from their mid-week high this past week (Chart 1).  Potential nearby support levels are MA50 (currently around 1814), 1801-1806 and 1790 (Chart 2).

If additional wave [c] pullback does materialize next week, we could be looking at a (weak) inverse head-and-shoulders pattern which theoretically points to the mid-1900s.   That level also coincides with a equal-price ABC upswing with respect to the October 2013 low, and should adequately satisfy the requirement of an overthrow (Chart 3).  Whether SPX can get that high remains to be seen.

Market Timing Update (2/21/14)

[235pm] SPX update -

[905am] ES update -

Market Timing Update (2/20/14)

[EOD] Stocks -
SPX count - five wave up from Feb low to yesterday's high, LD down from yesterday's high to today's low, zigzag up to today's rebound high. See charts.

[725am] ES update -
small-degree five-wave decline from the recent high so far.

Market Timing Update (2/19/14)

[745am] ES update -

Market Timing Update (2/18/14)

[EOD] Stocks -
Potential small-degree triangle or terminal triangle.

[850am] ES update -
a small wedge, a larger wedge or a high. see chart.

MTU Weekend Ed. - Overthrow, 2014 (2/14/14 close)

The past week’s advance in stocks likely confirms that SP500 is on its way to a potential March/April top, as speculated in It’s TIME (1/24/14). See Chart 1.

The proposed top serves an overthrow not only to the diagonal count in Chart 1, but also with respect to trend line resistances at various degrees. As a preview, Chart 2 and Chart 3 illustrate.

Near term, one can count a five-wave advance since the correction low in February (Chart 4), that is (nearly) complete (Chart 5). Next Tuesday morning offers a time window for a potential pullback. Let’s see if the market takes it.

On a near term pullback, potential supports are around 1811 (SMA50), 1802 and 1789. See Chart 6.