Posted by: stockscooter | January 1, 2013

Take Off your Party Hat and Put On Bull Horns!

The closer I look at the charts, with my proprietary indicators, the more apt I am to be sprouting bullish horns.  Yes, I know we just went over the fiscal cliff.  However, the powers that be often times wait until the end of the week or the end of the month to make a significant move.  I think we have that as of Monday.  The rather large positive day turned my monthly, first-to-turn oscillator (circled in orange) sideways for the month of December.  With the new month to start tomorrow, another bullish candlestick will turn it green.  This indicator had been down and red since September, as well on other models I use.  This movement is it’s first signs of life.  My trend indicator (circled in light blue) is showing a large spread between lines which indicates strength in the up trend, and with my oscillator about to turn up,  the trend will stay strong to the upside.  This could be very bullish.

Now let’s look at the count. I have developed a bullish count, which is in effect very bullish.  The start of a 3-of-3 could be in the making.  It may have already started last month, or it is in the work-out stages still. No matter, any good upside move from here may be a large 3-of-3 move, which would catch all the bears off-guard.  A third wave at this juncture would be powerful enough as to break the 1442 area on the S&P, which I believe may invalidate the bearish case.  Even a sustained close above 1430 (black line) would be bullish short-term, in which to build upon.  So, the last day of 2012 may well have been very telling.  We shall soon see,  because the market may start to reveal it’s true direction very soon.  A break above 1442 or the more obvious 1474, would indeed have me take off my new years party hat and put on my bull horns.

ZY243987-56

Here’s the caveat.  For the past 5 weekly candlesticks, the market has been doing the “Schwarzkopf”.  In honor of the late great General Norman Schwarzkopf, I named this market tendency.  I named it after the general over a decade ago because before he attacked Iran to free Kuwaiti citizens, he maneuvered on the  Iranian border.  Left then right, in then out, again and again until he could see how the Iranian national guard responded.  When he saw the direction of the enemy, the general out-flanked the Iranians and chased them down.  The market has done this maneuvering for 5 weeks (see chart below).  Each week is followed by a large opposite direction candlestick.  This is because a large move is in the making.  Let’s be careful not to get caught positioning before the market breaks.  There should be plenty of return, thereafter, in either case.

ZY243987-58

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