Saturday, April 21, 2012

S&P 500 - Triple Screen 'Technical Analysis' - Week: 16 April to 20 April, 2012 - Flat Truce..

Last weekend we saw the Bears well entrenched in the short term (click).
Later in the week we studied the moves, that the Bulls made to Neutralize the Bears (click and click)
Price has followed our channel lines with Ninja Discipline.
As expected, the Moving VWAP34, was the resistance in the short term, all of last week. 
Lets look at our three screens to find out the action points.

S&P 500: Long Term View (or) Month Chart with closing prices in a line graph (or) EOM Chart: 
S&P 500 - End of  Month Chart (EOM) - 20 April, 2012. 
Three years worth of data is analyzed with the channel drawn above.
This screen has reversed from last week's positions.
Price is above all MAs once again.
Bears have lost the tiny toehold, they had last week.
The Bulls rule the long term view.

S&P 500: Medium Term View (or) Week Chart, each candle is 1 week's price action (or) EOW Chart: 
S&P 500 - End of  Week Chart (EOW) - 20 April, 2012.  
We zoom in with white weekly channel lines as above, and study the last six months price action for a sharper picture.
We have a Bullish Harami (See links to some free resources below).
The White channel bottom has been support, for last two weeks...Bears are yet to crack it.
Price is back above most short term MAs, with no Bearish Crossovers.
Bulls would hope that the Bullish Harami, would mutate into a 'Three Inside up".
Bears would give another shot at the Channel bottom (white)
This screen is neutral, despite last week's price action.

Bullish Harami (low reliability):
Three Inside up (High Reliability):

S&P 500: Short Term View (or) Day Chart where each candle is 1 day's price action (or) EOD Chart: 
S&P 500 - End of  Day Chart (EOD) - 20 April, 2012.  
To get a sense of the most recent trend, we use the yellow day channel lines presented above, which covers about 50 days price information. 
Price has rigorously followed the realigned channel lines.
M VWAP 34 has been the resistance yet again.
None of the MAs that we follow, have crossed over 'Bullishly' yet..
MACD histogram is just about in the postive.
Bear hold is nebulous, and they need to crack that White channel line soon.

Looking Forward:
MVWAP 34 (EOD) to our While Channel bottom (EOW), is the range to break, going into next week.
Longs would pin their hopes on the Bullish Harami (EOW), even if its reliability is low...

The Dow 30 - Ichimoku Study - Week: 16 April to 20 April 2012 - Bull Hold

......Regulars can skip below and go straight to the chart......


We do an weekly Ichimoku study, to complement our 'Triple Screen Technical Analysis', of the markets we study.
When taking the 'weekly' time frame, to use the Ichimoku Cloud, we need to consider...

The standard settings for an Ichimoku Kinko Hyo chart are 9, 26, 52 and are used on EOD charts.  
When Ichimoku was created back in the 1930s, a trading week was 6 days long.  So we have one and a half week(9), one month(26) and two months(52). 
Now that the trading week is 5 days, we should actually use 7,  22 and 44 instead. 
However, the majority of systems, worldwide, still use the old settings 9, 26, 52. 

We need to study markets, on a weekly basis on this Blog.  
How do we fit 52, 26 and 9 into that need?  With one candle being one week?
There are 52 weeks in a year, 26 weeks form two quarters (or a half year) and 9 weeks equal about 2 months.  Fits the old logic - albeit differently.
Presto, we have a longer term view with the same settings!

So, if you like to move off the beaten track, for a on...

Quick Reference : 
Chikou Span - purple line,
Kijun Sen - blue line, 
Senkou Span A - black line, 
Senkou Span B - grey line, 
Kumo - grey shaded area,
Tenkan Sen - red line.

Useful resources (free) from the Web:

DJI 30: Medium Term View (or) Week Chart (or) EOW with the Ichimoku Cloud: 
DJI 30 - End of Week Chart - 20 April 2012  
Last 6 Signals seen on DJI 30 - Week Chart (EOW) marked on chart above:

1. Senkou Span Cross: Neutral Bullish Signal (S)
2. Chikou Span Cross: Strong Bullish Signal (C)
3. Tenkan Sen/Kijun Sen Cross: Neutral Bullish Signal (T)
4. Kumo Breakout: Bullish Signal (B)
5. The Flat Kumo: Bearish Signal (Ko)

6Tenkan Sen Cross: Strong Bullish  Signal (minor signal - see arrow)

1. Price crossing the Tenkan Sen (red line) is considered as an early warning sign of sentiment reversal. In this case back from Bear to Bull (reverse of last week - now we know why this is a minor signal).

Conclusion is same as pointed out last week, 'Bulls are still all over this screen. Bears need to stay below the Tenkan Sen to have a chance of taking this one over.'