Migrating to WordPress

To all readers,

This blog will be migrated to timeandspiral.wordpress.com with effect from 27th December 2011.

All new postings will be listed on wordpress. Please save into your favorites. There is also an option to follow time and spiral through email.

In this transitionary period, this page on blogger will not be removed until further notice. But kindly note that there will be no new updates on this page.

Week in Review

As at last week, the sentiment was pessimistic as the indexes start to fall, hitting a low on 19th Dec, at 1202. I gave a target near 1200 levels, which was at fib 61.8. In the postings sent last week, I told my readers that I remain confident for a rally this week and on Tuesday 20th Dec, markets gapped up 3%.

After wednesday, markets started going into a narrow range, moving a little higher and higher on light volume. A bearish wedge is forming.

Yesterday, I reviewed the price targets and gave alternative scenarios. Scenario 2 is out. If the markets do not fall below 1248 on Tuesday, then the price actions of yesterday will conclude that we are still in C wave of the wedge, and we have D & E to go. This also implies that there will be a spillover high on 27th Dec (markets are closed 26th).

23rd Dec is a cycle turn in my books and giving +-2 days, 27th Dec is acceptable. Since 1260 has been exceeded and if we are still in C wave, the targets will be raised to1270-1275. Also, 1270 is 0.618 extension of the rise from 1158 to 1267.

But If the markets start falling right away and goes below 1248, it is a warning that a top has already been in place at 1265.

I remain confident just like last week and I stick to my view that we are going into general weakness till the first week of Jan.

As volume is light, I expect markets to be either in a narrow range or start falling next week.





We formed a narrow range bear flag on the VIX hourly chart, so we could see a lower vix next Tuesday corresponding to a higher high on the SPX. Look at the MACD, it has crossed up and if Tuesday sees a lower VIX but with a higher MACD, there we have it, the recipe for a turn. Both the hourly and dailies would be on positive divergence.



Same analysis ties with USD's picture. This is a daily chart. MACD has crossed down, tying with a rise in markets on Tuesday, but as price is now on support so I wouldn't expect to see a big drop in USD. Its MACD should cross up soon.

Lastly, this is a season to be merry. I would like to express my gratitude for your support and I wish everyone a wonderful Christmas and have a great long weekend.

See you again next Tuesday.

Updates on price target

It was indeed a quiet range bound day...

As SPX has hit 1255, I am providing 2 scenarios as time draws near for a turn.

1. On SPX cash front, if we are in a rising wedge, we have made a ABC, left D and E to go, which I think we will have it on 23rd.
Wave D should target 1250 and wave E 1260. 1260 is just 5 points shy of my original target, so fret not, if you have already taken a short position.

2. It was a ABC corrective move from 1202 and we have peaked at the 78.6% fib at 1255.

In all, a top is near. Time to load shorts.

I will provide more updates and charts later.

Range bound

As mentioned yesterday, it would be a day of consolidation, and price actions resulted in a Doji.

I mentioned too, that prices could see a gap up today, if history is of any guide. Futures are currently pointing to a positive start, gapping up a couple of SPX points. However, as opposed to Tuesday's moves, I think for today, we should see a very quiet range bound day.

My observation is that the SPX will be carving out a bearish rising wedge with negative divergence forming. This aligns pretty well with the bullish descending wedge in VIX.



For swing traders, it is a good time now to sell away your longs and start positioning for shorts.

Timing wise, 4th - 6th Jan could be a low, before bouncing up in the 2nd week of Jan. I will provide some estimates to the price targets nearer to the date. However, be careful that price cycle inverts from time to time. So the planned target low date may turn out to be a high date. But in all, it should be a turn.

See you folks tomorrow ! Happy trading !

A day of consolidation

The VIX chart keeps me on my toes and this is one of the reason I am wary of this rally. Look at VIX. It is forming a descending wedge with positive divergence on the dailies. Once it bottoms, the initial run-up will be very fast & furious. So I am a expecting a mini-crash in the main markets after 23rd.

To form a positive divergence, the VIX has to turn up today, meaning the general markets will be weak. This has to occur if the thesis is working.




USD has turned down slightly, coinciding with the market rise yesterday, however, it is still well within the rising channel and should again, turn up on 23rd, targeting 79.50 area as the bottom. Overall, USD is moving up and points to higher highs in the next few weeks. Another reason to believe we are going to see a weak Jan.




What a great day for bulls !

Major indexes were up nearly 3%, though most of the action took place pre-markets. This had been the trend recently...markets gapping up or down huge, and consolidating during main hours.

We should see a consolidation today, or general weakness in the markets, perhaps closing negative. This is required if we are going to top on 23rd Dec. Tomorrow would be another gap up day if history repeats.

All charts are pointing to 23rd Dec for a turn. We should see weakness in the markets in January, and in my opinion, that is a major buy period. News will start surfacing regarding eurozone problems again etc... that should not deter us from buying.

I will be sharing January's road map, the turns and perhaps touching a bit on price targets after December.

I am getting busier these days as the quarter is closing, hence my apologies if I do reply late to your messages. I will try to provide daily market updates if possible, but might get delayed a day or two. I brought my laptop back home and promised to WORK, and again, I find myself shored to the computer trading screens haha. Ok, I got to go work. Please check back again tomorrow for market updates.

Have a good day ahead !

And here we RALLY

VIX Chart

Vix is currently below MA50 and MACD is giving a sell signal on hourly frame. However, watch out for the daily positive divergence forming soon. That will give us the signal to short markets.



SPX Chart



Spot on !

The call for yesterday's low near 1200 was met. SPX hit 1202 on 19th Dec, made a positive divergence in hourly timeframe and reversed up today.

Market gapped up today and we should be rallying this week aka the Xmas Rally...

The next turning date should be made between 22nd to 23rd Dec. My initial price target is 1250-1255. But let's see how fast and furious this rally goes. If its powerful like we see in Oct or late Nov, then 1300 range will be met.

I try to avoid giving price signals as this blog is mainly for timing signals. Price or even the direction is not a guarantee. Sometimes, price cycle inverts.

For Singapore investors, those who bought Noble yesterday must be laughing all the way to the bank now... :)

Next week's rally

The reversal off the lows of 1209 on 14th Dec had been weak. If we do not rally huge enough on Mon, then next week's rally (Xmas rally) will probably only form a lower peak and not the initial target in the range of 1300s.

There is a possibility still, on Monday, that we test the 61.8% at 1200 level before reversing up. This may form a positive divergence on the hourly charts.

I am confident that there will be a rally next week, peaking in the cluster of dates between 20-23 Dec, targeting 1250-1255.

I will provide Jan's road map after that.