Turning Point of all Stock Indices? Saturday, February 16, 2013

Hi Traders,

Please don't forget that we hold two webinars every Wednesday:

• one at 7pm (Sydney time)
• one at 7pm (Perth time)

Back to trading, there are rumors about the stock markets topping and reversing. To read some confirmation let's see a comparison of the major daily charts: DAX30, DJ30, FT100, S&P500 and SPI200.
 
ps: Don't miss the last chart at the bottom

SITUATION

Although waves 1 to 4 somehow coincide in each daily chart, this correlation looks broken afterwards, with only FT100 and SPI200 showing 5 waves (of a minor grade) to the top.
 
This means that:

• all charts might start a major reversal in the the week 25Feb-1Mar or even the incoming one
• OR
• they are actually starting a very minor reversal down (wave 4) followed by a minor double top (wave 5). Only then, the major reversal would take place.

The DAX below shows a little downtrend. Basically, if it bounces back on the channel line, it might form a double top or even reach level 8000 where a major reversal would start.

click on the chart to enlarge and "esc" to exit

 

 

 

See the double top in the FT100  below - which comes usually a week earlier then the other markets. Note the Stochastic in negative divergence although both the awesome osc. and the wave osc. don't give us any go yet.

 

 

 

click on the chart to enlarge and "esc" to exit 

 

 

 

 

 

DJ30 and S&P500 below show a very distressed reversal candlestick formation called "wheezing pattern" at the top, meaning an imminent reversal.

 

Whether this is  going  to be a major reversal or instead a small a-b-c down followed by a double top this is not  clear.

 

At present there seem to be only 3 waves up out of 5. Note the Stochastic in negative divergence although both the awesome osc. and the wave osc. don't give us the go yet.

 

 

 

click on the chart to enlarge and "esc" to exit 

 

 

 

Yet again 3 waves up only - out of 5 - for the S&P 500 below with the wheezing formation which is by definition a very bad sign. Note the Stochastic in negative divergence although both the awesome osc. and the wave osc. don't give us the go for a major reversal yet.

 

 

 

click on the chart to enlarge and "esc" to exit 

 

 

 

Instead,the SPI200 below shows the completion 5 ripples up plus the reach of the expected target at level 5000. Actually, level 5041 is the perfect "50% retracement up" of the major slump occurred in 2007-09.

 

 

click on the chart to enlarge and "esc" to exit

 

 



 

Finally, note the weekly chart of the SPI200 just below. We have some significant coincidences:

• we reached the same top 3 times
• the last wave looks a "two step pattern" which is a 3-wave pattern (completed or almost near 5041)
• Note the TIMING:  if the 18 weeks pattern will be repeated, the reversal should occur the week 25Feb-1Mar or even the incoming one.

 

 

click on the chart to enlarge and "esc" to exit



EURUSD, Friday, Feb 15, 2013

Hi Traders,

Here some good news first.

1. We moved back the webinars to 7pm (from 8pm)
2. From Wednesday 20th, we are going to run 2 webinars each Wednesday:

• one at 7pm (Sydney time)
• one at 7pm (Perth time)

This way everyone in Australia, Singapore, Indonesia and around the  same longitude wiil be able to attend our webinars. Hence, the next one is scheduled for Wed, Feb 20, 7 (NOT 8pm).

Back to Trading Markets now.


SITUATION

Markets seem to be reversing quickly - almost every market - and so the EURUSD.

As you can see by the monthly chart below the EURUSD has reached the same top of January 2004 and then it started reversing. Now, if this is a "two step pattern" like it seems to be - a three wave pattern up - there is NOT going to be any wave 4 and 5 up.

Hence, this new downtrend could take the pair to some of the below mentioned targets, according to the completion and amplitude of the new 5 waves down, being the first two targets more likely to be reached:

• 1.230
• 1.191
• 1.160
• 1.121
• 1.065

Judging by the weekly chart below the two-step-pattern seems to be  completed and the new downtrend has started already. See the reversal candlestick as a confirmation.



The daily chart below shows the nearest target being at 1.33 (blue line) - for those of you who want to take a short downtrade - but also even lower if the area 1.3188-1.3139 is reached. Then there should be a retracement up in three waves.

There are 4 well shaped waves - out of 5 - in the 4-hour chart below. Consequently:

• you may want to take a quick short to 1.33 or lower
• you may want to wait for the completion of wave 5 down and then take a long position to get the retracement up.
• you may wait for the retracement up to be completed and then short EURUSD again .

ENTRY POINT:

The 1-hour chart below shows 4 litlle waves (out of 5). The fifth will be up. Just wait for the fifth wave to be completed before taking a short position. You'll see a reversal candlestick at the top of this new little ripple 5.

There are also three oscillators below:

• the "wave" oscillator, similar to the Bollinger bands (but it's not). This is going to give you the earliest entry signal. Check this oscillator near the last candle in the 1-Hour chart below.
• 
  
• It shows the red lines still running inside and the grey lines still running outside. This is an indication that the downtrend is still on. Again, just wait for the fifth ripple to be completed before taking any short position.
• 
  
• EXIT SIGNAL. This oscillator will alert you that you reached the bottom of the big wave in 1-hour chart when the two lower lines (both the lower-red and the lower-grey) perform a sharp angle up. 
• 
  
• Note: DON'T enter any new long trade till all four lines swap position (the grey lines getting inside and the red lines moving outside)
• 
  
• Also, enter the new long trade ONLY when both grey lines narrow down.

• The "awesome oscillator" provides a slower but sometimes safer signal.  Just wait for it to get to zero line before getting any position.
• 
  
• Finally the "Stochastic Oscillator": Entry only if the the stochastic of the 1-hour chart (or 15min-chart) shows a divergence, never before.