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A little correction


Hi there,

It looks like the $ cycles give room for a correction in equities.  And the sell volume is too big, oversold market.  And everybody started to get scared of the selling.  It is time for a correction.  How big, I think the answer in the the $ cycle:

USD 2D:

On 2D:

  • hist and osc about to do bullish cross in 3-4 days
  • the sentiment is at 47 and points UP, momentum is almost to the green side at -17%
  • no buying volume yet
  • MCcellan vol osc is green

USD 1D:

USD 1D:

  • we have bullish cross on hist and almost a cross on osc
  • the buy and sell volume may have a bull cross tomorrow
  • the sentiment points down (at 55), momentum is at +16, points down
  • mccellan vol osc is green but points down
  • and RSI points down as well

So based on the USD 1D and 2 D we can say that for about 3 days, until the 2D can do a bull cross, the $ may wait with the pressure on equities.  So I expect a lateral or slightly down move for the $.

Let’s see the stock market, RUA3K 2D:

RUA3k 2D:

  • the sell volume is at “max”, meaning that in the past, every time the sell volume got that big, a correction started
  • we had a small MVO red today
  • the hist and osc are red
  • sentiment and momentum are low and red
  • McClellan vol osc is red and very low for 2D bars, meaning that is the past, every time the red volume got that low, a correction started
  • the long trend hist is about to cross on the upside, this is a fake signal, it is not at the same time with the slow hist
RUA3K, 1D:

RUA, daily:

  • It looks like the selling lost some of the power today
  • the hist is red but diminishing
  • no buy volume
  • the momentum and sentiment started to ease and to point UP
  • the RSI started to move UP from oversold condition

Based on 2D and 1D, we can say that the selling is still very powerfull, but a correction is close. How big? Maybe about 2-3 days.  I’ll say that by Thursday whoever is long from today needs to verify if long is still a good play.  I mean we can always correct with time, dont ever forget this.

Based on ichimoku, spx:

and fibonnaci retracements, I will say a good target to load a short, a small short position, if the sell volume stays elevated, will be 1295-1298 on SPX, up to 1311. If no experience, like me, and you want to load a short, please think about going only with a 1X , dont go with 2x or 3x unless you react fast to changes and you know how to deal with short positions.

If we go to 1295 on spx, I will load a 1x short, RWM only a unit, just to be able to verify the analysis.

We need to look at the $ move during the correction to the upside.

One thing to do, is to look for stocks that dont fall too much or are just correcting a little compared with the market indices. Take note, these may be the leaders when the bull returns.

Good luck.

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Categories: Miss Market
  1. June 14, 2011 at 12:35 AM

    Thank you very much for your report/analysis. I see $DXY need to test 71, so correction would be huge. RUT back to 870 and/or SPX back to 1375 area

  2. VolumeTrends
    June 14, 2011 at 12:55 AM

    Hi Deej, welcome to my blog

    That’s a scenario as well, we take one day at the time and we look at the volumes.
    If the USD 1D and 2D go to bear or double bear cycle, then maybe a test may happen at 71, who knows….

    But a full retest, seems to me, it is very bearish in the overall scenario….

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