Two Thousand Seventeen
In the last report, which was just prior to the Fed meeting I discussed the current T structure and the expectation of highs associated with ends of the various arms of the T scheduled for the week of December 13 and then New Year, and then late January and possibly late February. Possibly higher highs but not necessarily.
As we can see, we did indeed get an important high at the end of the 2nd major arm of the T on December 13 and we have now seen the 3rd major arm complete yesterday, and with the declining momentum since then we have found the market struggling to make new highs.
Although the market peaked on December 13, after numerous warnings from the Arms index, Put Call ratios and Relative Strength, price didn't actually make a formal 'Cover' Signal until December 28, and didn't yet make a Sell Signal, as it plays in the vicinity of what I call the Mid-Channel – an important bull/bear line for short term direction.
And so moving into an exciting New Year full of new expectations due to all of the political changes associated with the Trump election.
I am looking for a stabilisation period to be resolved before the next move higher as the market re-charges after that exuberant move in early December. As we can see from the T Structure projecting further highs in January (13th and 21st) and in February (16th and 24th), and also from the prescence of a cash-build up from the recent oscillator highs that can form a small T structure that could project into those same time frames. These may be highs but not necessarily higher highs, especially given the noticeable drag on momentum since December 13.
Be prepared for whatever comes next.
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Wishing you all a 'Very' New Year and much Prosperity.
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