I'd like to take the other side of the argument here and look at the charts through a bull's eyes. Below you see a daily chart of the SPY (SPY). The SPY broke out of its descending trend channel and has now pulled back to that channel. It has pulled back on decreasing volume, which is a bullish sign. It is also holding its 10 period moving average.
From a stochastic standpoint, the market was oversold for a long time. It has tagged the overbought area. It could stay overbought as long as it stayed oversold.
Now, I'd like to explain the state of things through the lens of Advanced GET.
We have triggered lower on the daily chart and the initial target is 118 with a stop above the 7-23-08 high, which is 129.15. I would use a stop of 129.30.
Zoom out to the weekly and you see a much lower potential target at 110 (MOB taken from 10-10-05 low) and then a lower target at 98 (MOB taken from the 8-9-04 low).
So, the initial target is 118. Trail a stop and you may be able to stay in the trade down to 110 and even 98.
This is how I view things at the moment. I'll let you know if that changes.
It was good to meet all the GET and potential GET users in Palm Springs. I will address the results to the survey I took in an upcoming post.
Joel Stahl
Would you consider the wave count on this trade to be a negative factor? and if so/ not why?
Posted by: Rich | July 31, 2008 at 09:18 AM
I show the wave count as a wave 4 pullback. This is in sync with the stochastic sell we are seeing.
Posted by: Joel Stahl | August 01, 2008 at 07:56 AM
On a current weekly chart I show a wave c. The stochastic sell looks like it did work when the chart posted here was current and I think you would still be in the trade.
Posted by: Rich | August 03, 2008 at 04:25 PM