ES #F 072806

The daily chart showed more upside potential, with 1285.25 visual as potential LIS and upside target to reach for today. The 120min chart this morning had a buy pattern ready to be triggered. The plan was to buy at the open and to hold all day, given that the 120 and 60min charts were bullish. Upside movement will help the daily reach its PRZ.

Range bound

Market is stuck in a range for most of day. Good for scalpers, not so good for those who like to trade the "bigger picture". Best to enter at the "ends" of the range for safer and higher probability trades.

Looking at the 60min to give me direction. This chart shows weakness.

ES #F 072706

Market looking to reach 1292 to 1294 ish after first testing 1290.00 high.

Counting Waves in Real Time ES #F 072607

Counting EW in real time is hard to do, but it doesn't stop me from trying. This is what I saw that got me ss off 1279.75 high towards the end of day. Notice that wave 3 had 5 waves, as did wave 5. There was a preliminary 5 wave count off the 1266.75 low, but the 5th wave up was longer than the 3rd wave, so I knew that didn't look right, and so expected extention in wave 3 and further move up, and the higher timeframe charts (esp. 60min.) supported the move upwards.

Old resistance becomes new support LIS

Market found support at 1266 level and once it climbed back up thru 1269.00 LIS, it went up to test the highs from yesterday.

First signal is a sell signal for the morning 072606

Market looks like it wants to retrace some of the move up first before moving higher. Resistance at the .382 fib level and backend resistance at 1273.25. 1269.00 is current support for now. 60min chart and 120min chart in position to trigger sell pattern if 1269.00 support breaks and becomes LIS.

ES #F 072606

Chart still looks bullish with no sell pattern in sight off the daily chart. Looking for a test of yesterday's high at 1278.75 if charts remain bullish looking. 1269.00 currently holding as support. Upside targets for today are: 1283.25 test, 1290.00 test, 1292, 1294.00 test, 1301.25 and 1309.25.

IF the market retraces first before moving higher, THEN downside targets are: 1265.25, 1261.25, 1259.75 and 1257.00.

Amgen (AMGN) Chart Analysis

Is it time to buy Amgen? There is a clear buy signal off the weekly chart, but the monthly chart is not so clear. Upside targets are: $72.40, $75.17, $80.00 then $81.88ish.

Never short a dull market

The daily chart had no sell pattern in sight ... so this move up is not that surprising. Market looking to test the highs, first 1290 then 1331.25. The clue for the move up began with the 60 minute chart; I should have paid more attention to it.

3 wave corrective pattern

Market made a 3 wave corrective pattern into 1263.75 and powered up. Upside momentum in the charts. Looking for upside target to complete wave 5. Then bigger retracement down.

This is something that I always have to keep in mind -- after 5 waves up, look for bigger abc correction into the .618 fib level. The 120min and 60min charts were looking kind of toppy. When the move this morning made a 3 wave corrective pattern down into 1263.75, that was a clue that we were in a wave 4, and should be looking for the next upside target as a potential end of wave 5. After the higher high came in, we made a bigger corrective move down. We overbalanced and that confirmed that wave 5 was complete, and that we were in a new wave. The downside target now is the 1255 to 1256 area. Big PRZ there.

Also, I see currently 3 waves up into 1273.25 high off the 1231.00 low. Will be keeping an eye on this.

ES #F 072506

The higher timeframes indicate that a pullback is possible off the 1269.00 resistance high. Looking for a possible abc 3 wave movement into the .618 fib level at 1253.25 ish level. A sell short against the 1269.00 is a low risk trade for today. IF we do in fact retrace the move up, THEN downside targets for this morning will be: 1259.25, 1256.25, 1253.24. There is also a gap down below at 1244.75 that remains unfilled. Daily chart still shows some upside potential. Upside targets (should the market succeed in moving up before a retracement) are: 1272.50, 1277.25, 1283.25 and 1290 test

The $SPX has found support and looks to be heading up to test the high of the year.

Monthly chart sure looks toppy and showing divergence all the way up.

Weekly chart showing a buy pattern signal shaping up to take us to test the high. Lots of support can be seen on this chart.

Plan the trade, trade the plan 072406

All upside targets hit. We tested 1269.00 high and pulled back for profit taking. Possible 5 waves up into this test of 1269.00 so we could have a deeper retrace. Watching 8min chart for direction. Good way to end the day. The higher timeframes gave the clues as to direction -- all timeframes were in agreement, making for a nice trend day up.

ES #F 072406 PRZ

PRZ hit at 1266.00 level. Looking for bigger retracement here as possible.

Upside targets for ES #F 072406

The upside targets are: 1259.25, 1263.50, 1266.00, test of 1269.00. The expectation is that we retrace the last leg down and re-test the 1269.00 high before deciding to go higher.

ES #F 072406

Today should be a buy and hold day, especially off the globex lows. All timeframes say up for today. Now that the low of 1243.50 is holding and we have retraced the last leg up, let's see if we can retrace the leg down from 1331.25 high. So for the next couple of weeks, eventual upside targets will be: 1292.00, 1309.25, 1319.50 , and test of 1331.25 before seeing whether traders want to take it higher or not without a retrace.

Nutrisystem (NTRI) Chart Analysis

Monthly chart still bullish with no sell pattern in sight. We are however, in a retracement/corrective wave. Interesting that Cramer reports that there are lots of short sellers on this stock.

Weekly chart shows current resistance at $67ish. IF stock sells off against this resistance level, THEN I will target the low and look to see if buyers come into the market at that level.

Daily chart says to be prepared for a pullback to test the current lows at the $63.00 level

Ashland Inc (ASH) Chart Analysis

Chart shows a 3 wave pattern into $75.17 resistance. The move up shows regular divergence. "Old resistance becomes new support" at $58 range currently holding. No clear chart pattern. Price can go either way.

Current resistance is at $67.61 and support at $57.39.

Daily chart looks a little bearish, as we are below major resistance. I would not be surprised if we go back to test the low at $58 range.

Ingersoll Rand (IR) Chart Analysis

Charts look very similar to VMC and MLM. "Old resistance becomes new support" PRZ at $36.90 got broken. Now looking for this LIS to hold as resistance for now down as possible. Will be looking a the daily and weekly charts for evidence of buying or selling.

Weekly chart shows no buying signal as of yet. We have now fallen through all moving averages on the weekly chart. The LIS at the $44ish level is now resistance and this showed up as a blue ice failure on the daily chart.

Daily chart shows a blue ice failure at the LIS shown on weekly chart. We have fallen through all moving averages on the daily chart as well. Daily chart shows small LIS at $38 to $39 level.

Martin Marietta Materials (MLM) Chart Analysis

Charts for Martin Marietta Materials not much different from those of Vulcan Materials. Same analysis applies.

Let's see if there will be any buying here for a bounce and retracement. Then I will look for possible sell pattern to make JOT sell short.

Will there be buyers showing up? If not, potential area to look for support, and buying activity will be at $68 level.

Vulcan Materials (VMC) Chart Analysis

Cramer is bullish on rock companies saying there is a boom in road building and highway construction. My trading system shows a clear sell pattern in place on the VMC monthly chart.

Weekly chart shows that prior resistance level of $76.31 failed as support, and now we have LIS, with a blue ice failure for lower.

The daily chart shows possible support for a bounce, but we have fallen through the 200sma and now we do have strong resistance above. Can we clear that resistance to go higher, or will we fail yet again, and the bears take this stock lower, as indicated by the monthly chart?

News Corp (NWS.A) Chart Analysis

As of this date, Cramer is bullish on this stock. However, the monthly chart shows potential stallout. We have a potential 3 wave pattern into PRZ. While the monthly chart does not show a clear sell pattern in place yet, the weekly chart does.

There is a clear sell pattern in place based on my trading system.

We have an ABC corrective wave to test the high, making a double top with a sell pattern in place. Current support is now broken, with a downside gap to be filled. Let's see if "old support becomes new resistance for further downside action. We also had a small blue ice failure pattern that triggered the recent selloff. IF the 89sma at $18.00 does not hold, THEN next level to look for support is $17.30ish. I will wait for a clear buy signal to buy this.

Ametek (AME) Chart Analysis

While Cramer is bullish on this stock, I am bearish based on the look of the monthly chart. I will watch for signs of a turnaround before buying this.


Another example of a 3 wave pattern with retracement making a slightly higher high before making a lower low.

The Power of 3

I have been noticing a lot of 3 wave structure patterns the past year, occuring in all timeframes, from intraday all the way to monthly charts. Does the 3 wave structure pattern on a monthly (longer) chart indicate a bigger picture congestive or corrective pattern? There are those that say we are in a secular bear market, and that we are in a big picture corrective wave. Others say that markets are fractal in nature. Is what I am seeing an example of that? I will be keeping an eye on the monthly 3 wave patterns to see how they play out in real time.

The monthly chart of 3M shows a clear 3 wave pattern down to $69.71 low before making a retracement back to test the high with another clear 3 wave pattern. Then the stock sold off to test the $69.71 low for the month of July. Can we go lower, only time will tell.

The daily chart of XLE (Amex Energy SPDR) shows a clear 3 wave structure down before retracing with a 3 structure into the .786 PRZ. Will this current down move make a lower low? Only time will tell.

The daily chart of JNJ shows a clear 3 wave pattern up before making a correction that overbalances. Then it takes off to new highs, and completing another 3 wave structure before retracing. Now we have tested the high at the $62.00 to within a penny. Will this be a double top and we head down from here? Or will we break through the resistance to go higher? All three timeframe charts say that it could go either way.

The 6000V intraday chart shows a clear 3 wave pattern retracement before making a run to test the high and making a double top before selling off for the day.

The $SPX index chart shows a clear 3 wave pattern down before a retracement that overbalances, finds resistance, and heads back down to test the lows yet again. Can we make a lower low after this 3 wave pattern? The next couple of weeks are going to be very interesting to watch. The charts show that more downside is indeed possible.