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Saturday, February 20, 2010

Week-end Outlook

A little something different this morning. Some Renko charts of various time frames, from the short 10 minute, to the longer-term daily chart. The reason I like the Renko is because a lot of the noise is eliminated, as the Renko's only chart price, with-out the consideration of time. I also elected to not put counts on these charts, there are plenty of counts floating around today, and I wanted to spend the day concentrating more on the Technicals and not waves.
I used the same four indicators I use in all of my charts. The standard MACD that shows a stock's momentum and direction by using EMA of the 12 and 26 period. The RSI, my favorite indicator, and one that works exceptionally well with the Renko charts, that shows how strongly a stock is moving in its current direction. The Full Stochastic Oscillator that is a momentum indicator, and an Elliott wave indicator based on the 5 and 35 period set-up in a histogram, where readings above zero are buy signals, and below zero are sell signals.

The 10 minute chart is already showing bearish signs, the MACD has a negative divergence on it as does the RSI, and the STO has curled over giving a sell signal. The EW indicator, also is on a sell. The only thing missing for a full blown sell signal is the MACD crossing below the zero line, but that is always a lagging indication. Short-term, the SPX is giving signals that the momentum is waning and there is little if any upside left before a correction to re-set the indicators to over-sold conditions.

This is the hourly chart, and by far the most bullish. The MACD is on a buy, and is close to reaching the trendline of resistance. There is still room for it to travel further up into over-bought territory before it crosses over and gives a sell signal, usually the cross happens after the top is in. The RSI is up into over-bought territory and still has more room to run. The STO is topped out and can stay that way for as long as it wants on a Renko chart, once it rolls over and crosses, then it will be on a sell. The EW indicator is on a full buy right now and will stay that way until to breaks below zero. The hourly chart is definitely showing that there could be a little more up-side left before a sell-off happens.
This is the granddaddy of them all, the big bad Daily chart, and it is the most bearish of all. The MACD is on a full sell now, complete with negative divergence, a cross-over, and a negative histo-gram reading, all things that NEVER happened with the sell-off back in July at 956. The RSI STO, and the EW indicators are also on a full sell. There is not a single thing that is bullish on this chart.
Well after all this, it looks like a short-term correction to the downside, before one more try at a higher high, to bring the hourly chart into full over-bought conditions, and then a large sell-off should commence.


  1. Great, objective analysis. Well laid out. Nicely done.

  2. What kind of timeframes are you looking at Columbia, for the short term selloff and one more attempt at higher high?

  3. "very" nicely laid out time frames and renko charts col, thanks!

    liked the explanations especially, 'bout when a full sell (or buy) signal would flash, which ones could rest at the top til it turned down for a sell (sto), and how the time frames fit within each other (hrly, daily) -

    what'll be interesting for me, is, if the markets do turn down, if the dollar, which has seemed over bought and too extremely bullish, will be a safe haven (inverse correlation) or continue to lose strength (become positively correlated to the markets) -

    i guess we shall see ;-)

    thanks again, nice work!

  4. You see the rise in the second renko chart from 1032 to 1150? It was a three. I'll speculate that it was wave 'A' of a large ED. If so, the drop we've just had was wave 'B' OR part of a triangle wave 'B'. We are now still in the triangle OR in wave 'C' to new highs which will be another three. Either way new highs are coming. Given time and dates I'll suggest that this is wave 'C' and will reach new highs by March 1st/2nd after which we'll enter a drop for wave 'D' back down to 1100.

    Just another view to add to the possibilities.