Market Update

 

In my last post I pointed out the huge number of Bottom Spotter alert signals at stopsandtargets.com

As of yesterday’s close 1589 of those initial signals have been confirmed… that’s a big number.

 

The following link shows a sorted list of all active Confirmed Bottom Spotters:

https://stopsandtargets.com/members/signals/spotter.php?param=BSbuy

You can sort the list by any column heading to uncover new potential market leaders.  The default starting sort is by last signal date and then by percentage gain on each date.  Lots of interesting symbols to look at starting on 12-27-18 (the day after the massive bottom numbers of bottom spotter alert signals were triggered).

 

 

Let’s take a quick peek at the stopsandtargets.com analysis tab for the S&P 500 Futures and then the timeframe charts to get our bearings…

 

 

Above is a screen capture of the current S&P 500 Futures ‘Summary’ analysis tab.

  1. The broad market rating is now BULL 1, which indicates ‘the first stage of a new uptrend progression in an extended long-term bear market’.
  2. The Bottom Spotter signal on December 26th was confirmed on the 27th and has advanced 11.6% to date.
  3. The short-term timeframe is currently ‘in play’ and remains bullish above 2568.50
  4. The long-term range envelope is between 2316.75 (countertrend buy on 26-Dec-18) and 2,895.25
  5. The intermediate range envelope is between 2316.75 (countertrend buy on 26-Dec-18)  and 2,690.50
  6. The short-term range envelope is between 2,438.50 and 2599.50 (countertrend sell yesterday).

*Note that the range envelope range lines are now drawn in on the summary Stop/Reverse Lines chart in a light gold color and are labeled L, I, and S. 

I find the new labeling to be extremely useful to help visualize where the stop/reverse lines are within the ranges…

  1. The long-term stop/reverse line is clearly rangebound with a bearish bias (),
  2. The intermediate stop/reverse line is equal to the descending intermediate top ( trending bearish).
  3. The short-term stop/reverse line is equal to the last higher daily bar low, which indicates it is trending bullish ().  Remember that short-term is now in ‘aggressive mode’, which means the stop/reverse line instantly indicates and follows a trending move whenever a daily bar low (at the end of a trading day) is higher than the stop/reverse line (trending bullish) or a daily bar high is lower than the stop/reverse line (trending bearish).

Taken together we see a Bull 1 market structure where the short-term is trending against bearish long-term (2782.75) and intermediate (2690.50) stop/reverse lines.

That’s a lot of very useful information packed into a quick glance.

 

 

 

Since the short-term timeframe is currently ‘in play’ I have also included a screenshot of that tab above.  Note that the range envelope lines are also on the timeframe charts.  That is a VERY cool addition since it now helps to quickly visualize where an ideal entry zone sits in relation to the range boundaries.  In the example above we can see that ES has been banging on the top of the range envelope to expand higher.  Yesterday we got a countertrend sell signal at the range top when the advance stalled and

 

Next I’ll show you what that means and why it is happening, using my charts..

 

 

click on image to enlarge

 

The initial ES monthly bar sell signal came at 2874.

Notice that the very long term range envelope bottom (see dashed lines on the monthly bar chart above) was previously pierced at 2546.75 (on the way to an eventual bounce off of the very long term trendline at 2316.75). That range envelope lower channel had not been broken to the downside since the last bear market bottomed in 2009–so, obviously, that’s a pretty big deal.

That line at 2546.75 was the source of recent short-term resistance that cracked in the last few days.  That now opens up a test of the next MAJOR hurdle above, which is 2607

 

click on image to enlarge

 

Zooming into the weekly bar chart above, we can see perfectly the dynamic that created the massive Bottom Spotters… That was the bounce off of the very long term (VLT) trendline support.  That test was preceded by a break underneath the last higher weekly 4-bar pivot low at 2607.  That was only the tenth time that has happened since 2009–and in each and every other occurrence price eventually reclaimed that level to resume the bull market climb.  That pattern is what I call The Weekly Bar Paradigm and I have been saying here for almost ten years that we will know with absolute certainty when the secular bull market has ended when the time comes that price can NOT reclaim a break through the last higher weekly 4-bar pivot low.

We are now here after an impressive short-term rally from the trendline bounce!  This is the big test of the first rally after a major pullback sequence–and that is why we can expect some nervousness and possible profit taking in this area.

Long story short… in order for the secular bull market to continue 2607 MUST be reclaimed.  If price cannot make it through on this poke, then we could possibly get a pullback with eventual consolidation for a second run higher from a ‘W’ pattern–but no matter how the coming days and weeks shake out—2607 is the KEY!

HEAD’S UP!

 

 

click on image to enlarge

 

The last image above is the daily bar/range chart which shows support and resistance, stop/reverse lines, and range envelopes.

Notice how the rally from the VLT trendline has advanced to just under the key 2607 line.  The stop/reverse line for the ST is at the last higher daily bar low (2568.50) and the top of the short-term range envelope is just above at 2599.50.  There is additional resistance above at 2630.  Somehow, the market will need to get through there to continue climbing higher.

Note also that the intermediate range top continues to descend and will soon be within striking distance if the short-term trend can continue higher.  If price eventually touches the top of the descending intermediate range envelope top then look for a potential pullback from there.

It’s all about 2607 and the short-term stop/reverse line will let us know when the next pullback starts.  Watch 2607 and then the descending intermediate range top (which will be descending rapidly in the coming few days) for upside targets.

…my .o2