The ACD Method

I would add that if the market is topping here with 1422 spx high, the price action makes sense, mkt tries to get to a new high, fails, probes lower, reverses, price discovery right Mav.
 
I have numberline confirmations in the QQQ, SPY, and the IWM will be there shortly.

We held that 134.75 gap TO THE TICK on friday. I think as long as we hold that area in the next few trading days we are setup up to take out the 1375 highs in the next week or two. I would expect for us to retest the highs at 1420 within the next couple months.

This market has been held down by alot in the past 3 months...it has become immune to the bad news. As soon as that gets lifted i dont think well just go sideways...we will go higher!

Here we have the QQQ'S classic test of the breakout area. We held that on friday...watch the action here you can look at alot but the action doesnt lie!
 

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Quote from Quon:

It's interesting because we've been talking about this, and there seems to be a H&S there, and it seems to me like last Friday was our confirmation day. So to me, it feels like this, along with the gap hold in the SPY, (despite yesterday's weakness and tough report) and those number lines, gives you reason to be bullish. That said, who the heck knows?

A nice tell would be if we were able to test and hold the weekly A down this week. If that were to happen, I think we'd have our answer.

Also, earnings in the banks very soon. JPM puts up a good number and it could be a catalyst. While people aren't expecting much out of earnings, it's interesting to note the strength of the small caps and U.S. names. Many companies have already lowered guidance, so that can help us move with beats.
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The number lines dont lie. We have had a massive reversal in the numberlines for most of the market in the past 2 weeks. Everything that was shortable has reset. There aren't many shortable areas in this market. We have confirmed uptrends in many sectors and half the major indices!The question is whether you believe we will lift higher...I tend to think this market is strong. What does a strong market do...it lifts higher. Look at the jobs report on friday...you can say it was a light volume week etc. But! regardless the market has held key levels in the face of all the bad news.

A couple days of digestion will work off this oversold reading and I think we will push to the highs!
 

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Quote from Maverick74:

Shan and I had a "long" talk about this on Friday in the office. LOL.

Here is a summary of what I said. I am neither bullish nor bearish. I see the market through the lens of volatility and it's why I use and love ACD. June saw us trade from 1260 to 1375 pretty much in a straight shot up. I think the market has to absorb this move. I told Shan that I believe we will not break and confirm either the monthly A up or A down this month. That means with the monthly A up in ES at 1383, I think that level will hold. We may trade 1390 or the 1375 level may hold but I don't think we "confirm". On the downside that level is 1328. Again, we might trade down to 1315 or 1320 but we don't confirm. I think the market will be range bound.

I think any large move we get will happen in August and September. So right now that puts us right in the middle between the two goal posts. That means we could trade higher and fail and grind lower the rest of the month or we could hit the lower end of the range and grind back higher. I'm agnostic as to which is more likely to happen. Markets rarely move straight up or straight down. If they did, trading would be very very easy.

Having said this, there are plenty of stocks breaking out to new all time highs and many sector ETF's at or near 52 week highs. There is something for everyone.
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Number lines are very strong but my call still stands. I think this month is a consolidation month. Neither A levels will be confirmed. However, if we do confirm a monthly A up, I'll be all over it. Same for the monthly A down. My end of year call still stands. I think we take out 1423 sometime in the fall and it will be a straight shot up to 1500.
 
Alcoa earnings tom...official start to earnings season! Next month or so should make for some good trading. Everyone ready for this??
 
Quote from Shanb:

Alcoa earnings tom...official start to earnings season! Next month or so should make for some good trading. Everyone ready for this??
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Yep, should see some clear leaders emerge after this earnings season.
 
Here is what is on tap this week:

Monday July 9

China CPI (June): China CPI was 3.0%yoy in May. Consensus expects 2.3%, while we expect a print of 2.1%.
Draghi Speech at the European Parliament in Brussels
BOE Tucker Testimony to Commons
Eurogroup/Ecofin Meeting
Also Interesting: Japan Current Account Balance, Turkey IP, US Consumer Credit, Mexico INPC Headline Inflation

Tuesday July 10

UK Industrial Production (May): We expect -1.7%yoy, slightly above consensus at -2.1%yoy for May, down from -1.0%yoy for April.
Weidmann Speech in German Constitutional Court
Also Interesting: France IP, Italy IP, Sweden IP, Norway CPI

Wednesday July 11

Japan Monetary Policy Meeting: We and consensus expect no further easing steps from the MPC at this meeting.
Germany CPI (June): Consensus expects 1.7%yoy in June, unchanged from the print in May.
Brazil Monetary Policy Meeting: We (and consensus) expect the SELIC to be cut by 50bps from 8.50% to 8.00%
United States Trade Balance (May): Consensus expects -$48.4bn in May, down from -$50.1%bn in April. We expect a print of -$50.5bn.
United States FOMC Minutes
Also Interesting: Czech CPI, Hungary CPI, Turkey Current Account Balance

Thursday July 12

South Korea Central Bank Meeting: Consensus expects the base rate to remain unchanged at 3.25%.
Indonesia Central Bank Meeting: The policy rate was at 5.75% in June. Consensus expects no change in the July Meeting.
Chile Central Bank Meeting: We and consensus expect the base rate to remain unchanged at 5.00%
Euro-area IP (May): Consensus expects 0.0%mom up from -1.1%mom in April.
ECB Monthly Bulletin
Also Interesting: India IP, Sweden CPI, French CPI, US Initial Jobless Claims, Mexico IP, Peru Central Bank Meeting.

Friday July 13

China Real GDP (2Q): We expect real GDP to grow at 7.9% yoy (consensus 7.7%yoy) down from 8.1%yoy in the first quarter.
China IP (June): Consensus expects IP to be 9.8%yoy in June up from 9.6%yoy in May. We expect a flat reading.
Russia Central Bank Meeting: We and consensus expect no change in the overnight auction based repo rate at 5.25%.
US PPI (June): We expect a -0.4% print in June against consensus estimates of -0.6%mom, up from -1.0%mom in May.
University of Michigan Consumer Sentiment – Provisional (July): We expect a print of 74, very close to consensus at 73 and marginally up from 73.2 in June
Also Interesting: Japan IP, India WPI, Spain CPI, Poland CPI, Hungary IP
 
Quote from Maverick74:

My end of year call still stands. I think we take out 1423 sometime in the fall and it will be a straight shot up to 1500.
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Looks like we've got another 4 years of BO then...

InvesTech found that if the stock markets rally to gains in the 2 months leading into elections, the incumbent party wins the presidency. And if the stock markets slump to losses in that critical September-October period for shaping psychology, the incumbent party loses. Out of the last 28 presidential elections, this simple indicator has proven correct 25 times. This is an astounding 89% success rate!

Broken down further, in 15 out of 16 times the incumbent party was re-elected to the presidency when the stock markets rallied in those final two months before voting. And in 10 out of 12 times when the stock markets fell in September and October, the incumbent party lost. These are super-high correlations over more than a century’s worth of data, so this stock-market indicator has to be taken very seriously.

http://www.marketoracle.co.uk/Article35495.html
 
Quote from dv4632:

Looks like we've got another 4 years of BO then...

InvesTech found that if the stock markets rally to gains in the 2 months leading into elections, the incumbent party wins the presidency. And if the stock markets slump to losses in that critical September-October period for shaping psychology, the incumbent party loses. Out of the last 28 presidential elections, this simple indicator has proven correct 25 times. This is an astounding 89% success rate!

Broken down further, in 15 out of 16 times the incumbent party was re-elected to the presidency when the stock markets rallied in those final two months before voting. And in 10 out of 12 times when the stock markets fell in September and October, the incumbent party lost. These are super-high correlations over more than a century’s worth of data, so this stock-market indicator has to be taken very seriously.

http://www.marketoracle.co.uk/Article35495.html
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Well, not that I'm trying to over analyze this, but I was thinking that the rally would come after the election and I assumed the rally would be predicated on a Romney win. I could see this market being very volatile in the fall and correcting again before the election. But these predictions are beyond ACD.
 
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