Stock Market Kicked Can May Have Bounced Against a Wall
Stock-Markets / Stock Markets 2015 Feb 13, 2015 - 09:34 AM GMT
Here’s a new one. Micro Wave iii is 1.5 times the size of Micro Wave i. You would think that Micro Wave v would be 1.5 time the size of Micro Wave iii, but no…at 2089.04 Micro Wave v is 2X the size of Micro Wave iii! I have not seen such a combination before. Such is the life of an analyst in these times…full of surprises.
So the Orthodox Broadening Top trendline has been exceeded today, although a drop back beneath the trendline at 2075.00 would bring the formation back into focus. Usually the Broadening Tops aren’t considered nullified until the price has exceeded the trendline by 1% or more. We’re probably going to have an uncomfortable night of it, but read the next entry below to get some focus on what is going on.
Here’s another surprise. The hourly chart only covers the past 30 calendar days, so you miss the bigger picture looking at the smaller details… not that they’re not important, but it apparently pays to step back a bit. So a 2-hour chart with a 3-month look-back is a handy way to start.
Today’s view startled me because the Triangle formation is so clear in the 2-hour chart, but it was missed even on the daily chart until now. While today puts us into the turn window for SPX, tomorrow is a Primary Cycle turn date for the VIX.
It’s interesting how this is coming together. While the SPX has an Orthodox Broadening Top, which is nothing more than an inverted triangle Wave B, the VIX sports a regular Triangle Wave B. The behavior of a Triangle is to delay, or as it has been said, kicking the can. Unfortunately, the can is about to hit a wall.
We’ll discuss the ramifications of this at a later time. Suffice it to say that VIX has a better than even chance of bettering the Head & shoulders neckline at 32.00 in Wave C. How quickly that happens is anyone’s guess.
Regards,
Tony
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