Bullish Breakout Looming!

Welcome to the final trading day of the first 1/3 of the year!

Yes, what a lot of people don't get it is that not only do quarters mark major milestones in the market, 1/3rds do too and usually marks big changes in the market as well. And this time round, as the first third of the year comes to a close, I do expect some big changes in the market as well. And what is that?

A major bullish breakout!

Yes, the first third of the year has been the most volatile in years and it has come to a point where both the technical pattern and the general market sentiment is crying out for a bullish breakout. Yes, just like what I said at the start of the year, I expect this year to be like 2007, a run up year before the market crash which, from how the bonds market and global economic data is lining up, seems to suggest some time around 2019. As such, I don't see this intermediate correction end in any other way but a resuming of the previous bull trend.

On the technical front, the S&P500 formed an clear, textbook styled, bullish wedge formation with bottom raised by its 200MA (or some call symmetrical triangle, I personally don't see why its symmetrical), a bullish formation which is so textbook styled that any half decent professional investor would have noticed it and would be acting on it. As such, I personally do not see the market going any other ways either.

So, lets enjoy the ride upwards!

For now, the market remains in short term neutral trend within an intermediate neutral trend and primary bull trend.

Things Get Dangerous...

US Market closed a strong day EXACTLY how I said it would yesterday! Here was what I said:

"Even so, I and expecting and won't be surprised to see today close a very strong bullish day, taking the S&P500 above its 30SMA before things get really dangerous"

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So yes, the SP500 has managed to close above its 30SMA strongly like I said it would and, like I said it would again, this is when it can get very dangerous. From here a strong opening typically leads to a negative close and a failure of the reversal. In fact, even if this reversal holds, moving down to retest the 30SMA for support before moving higher is high probability pattern as well. As such, all in all, at this point in time, I see more short term downside than upside and a reassessment of the coming short term downside will be necessary to ascertain its nature, whether a retest of the 30SMA or yet another failure to breakout for real.

For now, if you have profitable longs, you should really look towards taking profit on them today when market opens positive.

For now, the market remains in short term bull trend within an intermediate neutral trend within the framework of a primary bull trend.

Bulls Will Go On...

Welcome to week 3 of April, which is expiration week for April regular options!

Last week unfolded exactly how I said it would, UPWARDS. This was what I said last Monday morning:

"In fact, from the higher lows that have been formed throughout the whole of last week, I am actually more convinced than ever that this IS a bullish reversal point! :)"
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And so it was. The US market pivoted and turned upwards despite economic numbers being worse than expected generally. Last Friday, the US market closed down strongly but is really just a neutral candle that did a higher high and a lower low while bond yields and total equities put call ratio remain unsupportive of its bearish movement. As such, I would call last Friday a cautionary profit taking day after a good week's run. Also, the Monday following such a Friday tends to be a strong bullish one as well. As such, I do continue to see more upside possibility than downside possibility this week.

The only big event of the week is Friday's options expiration which typically do not significantly affect equity prices. As such, I do not see any reason why the market won't continue upwards in realisation of my bullish reversal prediction.

For now, the market remains in short term bull trend within an intermediate neutral trend within the framework of a primary bull trend.

What Did I Say?

What did I say about the US China trade war in my report yesterday?
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Check the news now and see what happened?

China just have to make one statement and everything is defused! That's the way it has always been. News and policies like this NEVER results in a market crash or an economic crisis. Policy makers ALWAYS find a win win solution, that's exactly the job that they do! Everything exactly as I have expected, including how the US market was already really bullish yesterday even before such a turn of events today. Why? Because investors are generally bullish at this point and only need a little push or a bit of an excuse to buy! Today, we shall see the market surge in fulfillment of my prediction!

For now, the market remains in short term and intermediate term neutral trend within the framework of a primary bull trend.

US China Trade War Market Crash?

Exactly as I said it would yesterday morning in my report to paid subscribers, the US market turned around on Monday's oversold condition and closed positive.

 

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However, it is again in my opinion, not a truly bullish day because the market traded well within the trading range of the Monday sell off. This makes it just another neutral sideways day. However, there is still not reasons nor indications to believe that the market is going to turn around south today Wednesday. In fact, it looks mostly like its going to be a low open high close kind of day, setting the motion for that high probability reversal I mentioned on Monday morning. This is especially so with the market futures already pointing sharply lower. Whenever the market futures overreact like that, the day usually ends up in the reverse way.

As such, even though the market still looks very volatile and at a very critical junction with news of a US China trade war blasting away hoping the market crashes, it just doesn't look like its going to work out that way.

For now, the market continues in short term and intermediate neutral trend within the framework of a primary bull trend.

Start Of A Market Crash?

Welcome back from the Easter Weekend!

I hope everyone had lots of fun because I certainly did, viewing cherry blossoms in Jeju island of South Korea! :)

Even though its a beautiful spring with flowers in full bloom right now, things are not looking all that rosy in the US Market at all. One thing I did get right last week though was that, as usual, Easter week closed sideways / positive. One good thing about the positive day last Thursday is that it set the market up nicely in a rising peak, rising bottom formation which places the odds going forward from this point UPWARDS, rebounding off the February low as I have said last week.

Yes, the market is very very close to a market crash but not JUST yet.

I know a lot of people who thinks this is the start of that crash but I still don't think so because the necessary pieces are just not in place yet. Just like everything else in life, there is a chain of events that must happen before something big can happen, that's the same thing in the stock market as well. Even though a lot of people think the stock market just crash with no timing and no reason, that's just not true. Its only true for people who don't know what to monitor and what signs to look out for. For those people, even the weather seems random (I hope you guys know the weather ISN'T random).

Yes, the pieces for the market crash is coming together but not just quite in position yet. As such, there is no reason for me to believe that the market is going to suddenly go much lower and crash at this point without reason. So, if that scenario is not possible, then the only reasonable way forward is a recovery out of this intermediate correction and back into the primary bull trend. So, lets see what happens.

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For now, the market turns a short term neutral trend within an intermediate neutral trend and primary bull trend.