WEEKEND JOURNAL NOTES : Sunday May 1, 2016

Posted on Sunday May 01, 2016


Sunday May 1, 2016

Starting with the S&P, let’s begin our weekend review. 

1) If you were reading the daily reports you were very prepared to catch this down move this week either on the short side or to get out of the day on longs. The downside target is still very much in play and is our first priority. I am a seller of any and all strength as long as the neckline does not become support again. An up move on Monday for the May fund flows will be viewed as a gift from the Market Gods in my mind. 

2) Based on what we see under the surface on the 30 minute chart above, along with the failed breakout above trend resistance, it looks to me, like we are seeing It looks to me, like we might have seen the end of a wave 4 corrective move. So how will wave 5 play out if this is indeed true? Well we take it day by day and watch to see if some of the fib support levels can come into play. I am a flexible, but fairly confident believer, that we will not see 2100 again for some time and that 2091 high will hold for the foreseeable future. I am a seller of strength into and below that area. 

I see 1 of the 3 scenario’s playing out below. I don’t predict the future, I am only using prior experience as a gauge here as I prepare for what might happen. I will change this view if we are unable to capture that 2044 target and the H&S top is killed off. Stay tuned to intrday and daily reports for updates. 
1) Pink, the 38.2 holds as support.
2) Blue, the 61.8 holds as support for wave 5
3) We retest Feb Lows.

Long Term Investors:

The 10/20 Month Moving Average Crossover : This is not going to play out exactly as it did in 2008 thanks to the Central Bankers, but this is an interesting monthly candle that will be difficult to overcome.


The Other Indexes:

The DJIA has by far the cleanest topping pattern. Expect 17543 to get captured followed by some defense of that support level. But does not look good here. 

NASDAQ Is a disaster. Has been a total laggard in this rally telling us the appetite for risk was not all that great. Again, I see a similar 1 of 3 scenarios playing out, but further downside immediate term. This still looks like a major market topping pattern that will need a catalyst to kill off. Trust me, the central planners are aware of this, so won’t be surprised to see some dovish speak if and when levels are tested.

The Russell: 

Here is what I am anticipating after a massive range breakout failure last week. We talked about this in the nightly report, things were looking very good above that level, but fell apart on Friday. We are now below this range. 
Further follow through below Friday’s lows probably means a retest of the April Lows. 


The Bottom Line:  
After Acquiring the upside target of 2084 on  4/18, the last two weeks have been filled with choppy consolidation and distribution/profit taking. We now look poised for further weakness as we begin the month of may. If I had a gun to my head, I would think we will acquire that lower targets in the next week and then see some more choppiness into opex before our next bigger move. 


This Week’s Chart’s in Focus:

Let’s review a few charts that I consider worthy of your attention:

(IBB):  Wow! Last week I tweeted that it looked like a date with the 200DMA was in order. However, now it has not only broken trend, but is back below former resistance on a closing basis, more or less confirming a failed breakout. Buyers better step in soon or this one is headed to new lows. 
The darling of the Biotech as had some noise this week. 

Regional Banks (KRE): @allstarchart picked this one up in his analysis. I don’t follow anyone blindly, but I will tell you when his analysis and mine line up, it is lethal. 
 Looks like it may have completed a right shoulder construction. I’m a seller into the recent highs at 41.20. I only want to be short below the 61.8 fib. Above that I am neutral. I am targeting 27.50.
If you look at the 30 min of this chart, it also has a little H&S pattern, a little pop Monday would be a welcome place to enter. 

Apple (AAPL) Please stop. This chart continues to be a disaster. Stay away for now. I still firmly believe it goes lower from here and I have been right on this one since September, despite everyone worried about Carl Ichan.
Here are my write ups on $AAPL


Here was a trade where we turned short term bullish into 105, which we got. 

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