Anticipated Sequence Levels For This Week’s Time Ratio Zone
The SPX ranged
between 1225.63 – 1215.93 for most of the last
four days as the 08/12 1225.87 low has been the initial resistance. It was a
1219.71 close on Friday, +0.6% but -0.9% on the week. The Dow closed the week at
10,559, -0.4%, while the Nasdaq, 2136, and QQQQ, 38.82, were both -1.0%. NYSE
volume on Friday was light at 1.21 billion shares and only averaged 1.31 billion
shares for the week. The August option expiration was a non-event and created no
real travel range for traders to work with. The volume ratio was neutral on
Friday at 52, with breadth +365. The 4 MA of the volume ratio is 37 and 4 MA of
breadth -489. Volume in the index proxies was extremely light Friday and overall
the casino was basically empty. In the
sectors, the OIH was +1.5% on Friday’s crude oil advance, but was -3.5% for the
week as it corrected some of the recent overbought advance. Other primary sector
losers on the week were retail, with the RTH -2.6% and CYC -2.1%. The BKX,
+0.8%, was the only green sector at week’s end. The up volume/down volume ratio
for the week was just .70, the lowest since the week ending 06/24. The week’s
net breadth was -1404.
This week has several time ratios starting with
Monday 08/22, while the SPX 1219.71 close is right at the Wave 4 1219.55 high
and 50-day EMA now 1218.69. The lower primary channel line and then 89-day EMA
is 1213 – 1208.73. The current downtrend channel from the 1245.86 bull cycle
high is a parallel line situation where leg AB =CD at 1219.50 and the 1.272 Fib
extension of leg BC is 1217.22, 1.414, 1214.38 and 1.618, 1210.30. The .50
retracement to the 1183.55 low from 1245.86 is 1214.47 and .618, 1207.38, which
is in confluence with the 89-day EMA of 1208.73. The retracement levels in play
from 1245.86 – 1136.15 are .236, 1219.97 and .382, 1204. The stochastic
oscillator is the most oversold since 06/27 on the way to the 1183.55 low and
prior to that the 04/20/05, 1136.15 low zone. There certainly is enough sequence
as we enter this time week.
This commentary is simply meant to give you the
anticipated sequence levels so you can focus all of your attention this week on
the price action around these levels which will put us on the correct side of
the next short-term move which will most likely be this week. We can’t know yet
whether it will be a reversal or acceleration but we are ready to play because
we are prepared with a high-probability frame of reference.
Have a good trading day and have a good week,
Kevin Haggerty
