Summary from oscillators
The Ratio Adjusted McClellan Oscillator is forming a positive divergence, meaning that selling on the New York Stock Exchange was not quite as broad as it was at the prior low, which penetrated <100> – a danger signal. Two versions for this divergence
No evidence that institutions have begun buying this market in earnest. This pattern was confirmed using Data Trader Pro. Large blocks were bought on Wednesday, sold on Thursday before AMZN earnings.
The Ratio Adjusted McClellan Summation Index has penetrated the 2016 lows without the hint of an upturn.
Ticks: $TICK hit -1474 Wednesday and -1289 on Friday
Weekly stochastics testing February 2018 oversold levels.
Moore’s 2C-P hit 12.6 on Friday. Lowest value we have is 7, hit on 2/9/18
Joel’s Net$ Values: Feb correction saw a point percentage drop of -11.84%. Oct correction is at -10.63%, as of Oct 26th. 2592.60 would equal Feb percentage point drop. Feb correction took $145 billion out of the market. Oct correction has taken $147 billion out of market as of Oct 26th close. Feb correction saw a Net$ drop of 18.88%, For the Oct correction to match that, Net$ would have to hit $828.96 billion. As of the 26th it’s at $874.45 billion. Based on current points per $billion, Net $828.96 should equal approx 2603 SPX. (Notice: If we consider the outflows of 145 billion during February, we have exceeded that correction by 2 billion now, it is needed a 5.20% drop in Net$ values to match February Correction in percentage/outflows terms )
Based on OI, we could go higher into the 31st, just to collapse into Thursday and Friday again.
EW Analysis:
Previously on October 21st: There is serious risk for the market to go fast to 2680 or lower on a break below 2748.3, until then this level is broken, price action looks more like a bottoming scenario.
Previously on October 23rd: market must hold 2722; failure to hold should be shorted with stops at HOD; 2754, invalidation off today’s five up should target 2681 or 2624. A consistent move past 2757 would project 2809 or 2855.
Current
Having hit 2627.4 lows, SPX did the worst we could have expected, developed an ABC off the lows, things would have been glorious for the bulls if we had created five up of such consistent level.
On the downside market hit 2.618 extension and reversed sharply, but this abc off the lows developed on Friday could be a wave iv up that went to .382 retrace of the ½ down within the c wave down (link). Much above 2713 we can not consider higher highs as extensions within wave iv and we must/should assume market bottomed above the 2590 expected level.
Below 2713 still can the market subdivide lower in strong manner toward 2602.5 (link) and I don’t pretend to squeeze the 2590 level, knowing Joel has a target for Net$ Value at 2603. I gave the benefit of the doubt to this market at the highs, won’t give it at the potential lows.
Lets see if Market can advance above 2692 tomorrow, follow through above 2723 will mark an inflexion point that will set 2705 as support thereafter.
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