The ABC’s of the Yellow Brick Road
Written by All About Trends
While next week could get a bit sloppy and choppy — it’s what happens AFTER we complete this pullback that you need to be focused upon. And that is a potential final run higher into year end or elections at least. We say that because we have no topping pattern showing on the market as of yet. Just a peak and a pullback all within a clearly defined uptrend channel.
Pay attention to these guys. They may be funny looking but they get it. Where do you think they got the money to pay for the lollipops anyway.
While the overall trend is up as defined by the yellow brick road we MAY still have a little bit of work to do yet to the downside as shown by the index charts below:
What we’re most interested in going into this week can be found in the little sky blue POL (Pullback Off Lows) lines. Those little sky blue lines are a bear channel in micro time frequency all within an overall market uptrends.
Keep in mind that while an overall trend can be up (or down) there are always going to be micro counter trends that take place commonly referred to as the Bunny hop dance of one back.
Now lets zoom in on those little sky blue lines to get a closer look via the 15 minute time frequency charts.
Even with the last two days of move up the indexes are still in pullback mode short term. This gives us pause next week with regards to new positions. See where we stopped yesterday? Right on what could be a downtrend line (Pink Wave 4 Line).
We still have three months to go till the end of the year and a lot can happen. IF we are going to get run up (5th and final wave higher) into year end which is a common occurrence then we need to knock over the pins (which we’ve been doing) so as to be able to set up the pins again into year end only to bowl for strikes at a later point in time.
Friday we said:
“The market conditions right now lead to more of what we saw in August — a back and forth chop fest, but in great shape technically via the Yellow Brick Road.”
In August we saw a tight watching paint dry chop fest that was really tight with no volatility. Now that summer trade is over we may be seeing the same thing with the only difference being more volatility.
Game Plan For The Week
Given what our index charts MAY be saying? We are apt to take it easy here, hang tight with what we have and use market weakness to pick off names from the long side watch list selectively.
Amazing Chart of the Day – CRM
Does everyone know their ABCs?
As in ABC POHs (pullback off highs)? This goes hand in hand with what the indexes MAY be showing here over the next week as talked about above.