Saturday, February 4, 2023

MTU Weekend Ed - Bull and Bear (2/3/23 close)

SPX is stalling inside the prior resistance zone (Chart 1) in its forth attempt to break it. 

The recent upswing is likely wave THREE (bullish) or wave C (bearish) - Chart 2 and Chart 3 - in the context of a/the big picture (Chart 4).


  1. Charts 1 & 2 -

    The key question is whether the decline from late 2021 to the June or Oct lows on SPX DJIA etc (and os indexes DAX) is whether or not it is a distorted abc or 12345 down.

    MTUs count is on the possibility its a abc and if so the current rally seq may be mid section of a 5 in progress.

    To me it looks more like a 12345 down.
    If so there is interesting count at this time. The 5 down was around 10.5 months from the Nov 21 high to early Oct low. Mkt is now just on 4 months from the low making time ratio of 10.5:4, which makes the 4 as being Fib 0.381 in time in 3 waves up (abc?).


    Chart 4 - LT

    I have said before the problem I have with the count since 2009 is the one there would make wave blue 1 larger than 3 which is not what is usually seen. That the main problem.

    Then there minor problems with the count.........

    The only 5 to 2021 I see possible is this.
    If you were to call the 13 yr advance to 2021 5 waves, the points would be wave 1 = 2011, wave somewhere in mid-late 2012, wave 3 = 2018, wave 4 = 2020 low and wave 5 = late 2021. But there are still issues with that count and Im not satisfied it the valid count.

    The blue count on chart 4 ignores the fact there is no abc allowed for wave ii in blue 1 (just after 2011 peak). In it wave i would be the 2011 peak and wave ii MTU seems to imply only has an single "a" wave (or a very time compressed b-c after it, which is far too compressed to be valid in my view) in late 2011. Once to you accept the missing b-c then the 2012 price action which in error is factored in the chart 4's wave iii to 2015 peak, then that wave iii is missing its wave subwave ii. There's a missing wave flow on effect.

    So to my mind the Oct 2012 low is the end of wave ii of my view of a 5 to 2021. iii would end in 2018. iv = 2020 low. v = 2021. With i being 2011. With this count you don't have any missing waves in either time or price swings.

    Given the wave count tho is distorted and has been since 2003 or at least 2009 anything is possible.

    1. Sorry MTU, the way you have been talking about the count in Chart 1 & 2 led me to think you thought 2021 to late 2022 is a abc (your blue count), but I note you indicate via the A-B waves it may be a 5 for A as I noted.

  2. SMAC (Special Moving Average Calculator) Update -

    I will report the DJIA one turned down on Fridays 3 Feb 2023 close (only slightly in its number value), however this is due to some data stream averaging with the flat mkt that index has had the past few months, specific to this index's unusual chart pattern. Extrapolation shows if DJIA remains around same levels for a few more days the SMAC will turn up again, and remains so it will continue up. Flat price action over several months causes these multi turns in the SMAC.

    The SPX SMAC remains moving up. Note SPX has not been flat the past few mths (so there's no flip in it like DJIA).

    I'll be interested to see what happens with all this turn indicator at this timing juncture as its an important one.

    But note it makes a turn signal error in 15% of cases.

  3. SMAC (Special Moving Average Calculator) Update -

    Close of Tues 7 Feb 2023 at 34156 pts - the mkts sizeable gyrations down-up today saw my DJIA SMAC indicator turn up again. After being down 1 day.

    (These type of rapid changes in direction in the SMAC only happen under unusual (sideways) chart patterns like DJIA has seen the past 2 months).

    DJIA initially turned up on 30 Jan (see prev posts) and its seen a net gain of 440 pts since then to 7 Feb over 6 trading days.

    The SPX one continues up.
    It turned up on 26 Jan and has been consistently moving up for 8 trading days. Its curve looks quite convincing for up cycle in progress based on past patterns. SPX index has moved up around 105 pts since the turn signal on 26 Jan.

    Note: both the SPX & DJIA SMAC commenced this run from halfway point of its previous curve cycle, rather then a deep low (its indicator curve is like an irregular shaped roller coaster ride), so on this recent up signal one needs to be alert and watching the EW count and other timing things on this run. If this up signal had started from a deep low in its curve I would be more comfortable with this signal being high confidence of a 2 month trend up. But in using it for trading you use a mechanical method and just go with its signals hedging the position to minimize risk.

    On its curve in 35% of instances past obv show you do not see a solid sustained rally in the mkt when this indicator turns up from a halfway point on its curve. The temp. up turn signal fails. The other 65% of saw a reasonable rise in the cash index.

    Ive seen instances with this SMAC in the past where in uncertain mkt chart patterns its turned up and you dont believe it at the time but 3 months later you look back and you see it was right. But its still has 15% error rate too.


    I will only be putting this commentary of this SMAC on for a month or so as an example of its value and predictive capacity, as Im sure MTU and others will be interested.