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March 20, 2013

Market is Topping Out $DIA $SPY $QQQ $COMPQ $RUT $FAS [*VIDEO & POST*]

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Written by: Kay Kim
Tags: , , , , ,
 

Last Update: 4.17.13

 

3.20.13 Wednesday

 

Dead_Bull

Bulls Are Getting Tired

Watch it on 720p HD

 

3.27.13 Wednesday

 

$DIA Daily MACD

3-27-2013 5-03-28 PM

This daily MACD Negative Divergence reveals that before the steep corrective move, MACD is able to represent early indication before its corrective bearish move.  Looking at this roughly 3 years daily chart, you can see that when this divergence is formed, correction happens every single time without fail.  Does this mean it has to play out this time? No.  Nothing has to play out in the market but we can conclude that the chance of this corrective move happening soon is very high.  Take a look at the “X” market where we didn’t form divergence (stock making higher highs and MACD making lower highs) thus the correction never came about.  That proves that the Dow Jones reacts very well to these divergence signs.

$DIA Weekly Oscillators

3-27-2013 5-08-24 PM

Obviously this being a weekly chart, it could take weeks before it starts to really play out but as you can see we are grinding the top of it’s band which means the market is at “overbought territory”.  This does not mean market HAS to roll over but it is very significant and early indication that it could if or when we have other analysis confirming that the possible correction is on it way.

$COMPQ Weekly MACD

3-27-2013 5-13-17 PM

This is rather troubling signal because we are forming “Three Peaks Negative Divergence”.  As you can see last three times when it was formed, it followed by very STEEP corrective move. This being weekly chart, it could take weeks before taking its place but definitely a warning sign that I wouldn’t ignore. This is alarming because other market indices analysis also confirms that the corrective move is on it way.

$QQQ Daily H&Ss Within a H&S

4-17-2013 9-14-07 AM

(Chart updated 4.17.13)

Looks like we are forming right shoulder within a right shoulder.  As you can see once the neckline support is broken, this thing tanked.  It is more troubling because $COMPQ already had pretty significant signals with Three Peaks Negative Divergence and $QQQ is now just confirming the potency of that $COMPQ weekly chart above with this daily H&S patterns within a H&S.  In the event that we break below $67.50ish support (which could become the neckline for this recent H&S pattern), high chance we could fall pretty hard.

$SPY Weekly MACD

3-27-2013 5-17-26 PM

Topping signal at its best.  Again I have to emphasize that this being weekly chart, it could take another 2-4 weeks before anything happens that we can tangibly see but definitely a warning signal that I wouldn’t ignore.  Last 13 years, MACD’s 4 to 5 level reading is where it signifies topping signal as it was never able to travel higher than 5 reading on MACD.

 

4.3.13 Wednesday

 

$SPX vs $RUT (Daily)

4-3-2013 9-45-33 AM

$RUT to lead $SPX to Bearish?

$DIA Bearish Divergences to Watch

4-3-2013 12-38-13 PM

 

4.17.13 Wednesday

 

$FAS Warning Signal on the Financials

4-16-2013 10-05-55 AM

This chart was posted for our On Air subscribers on Monday as a warning signal that topping process is starting to play out on the financials which could be a indication that the market as a whole is also getting top out.

$INDU Dow Jones Avg. Weekly RSI

4-11-2013 8-42-08 PM

Warning signal at best.

$SPX vs $RUT (Daily)

4-17-2013 10-12-42 AM

$RUT is leading $SPX to bearish



About the Author

Kay Kim
Kay Kim
Kay Kim is a full time equity market options trader, the Founder of TrueVine Capital, Inc. and the Owner/CFO of Lucky Klover, Inc. Kay has been trading the market since 2007 with extensive research and development on technical analysis. Though Kay may not have 20+ years of experience, he makes it up with his aggressive style of trading with in-depth technical analysis.




 
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6 comments
JackGodoy
JackGodoy

Hi Kay,

Any idea where Gold is headed? I have been shorting ANV and it has been in a steady downtrend for months. If the markets crash, will Gold rise? Thanks, Kay

2kaykim
2kaykim moderator

@JackGodoy well the theory is that once investors lose faith in the overall market they start to put their money in GOLD.  So yea I am expecting rise in GOLD.

JackGodoy
JackGodoy

@2kaykim @JackGodoy

http://seekingalpha.com/article/1100301-gold-fails-3-times

Here's an article from January from a guy that correctly called the Gold bubble collapse back then. he thinks gold is headed to $700 within 5 years. He also called the APPL crash corrrectly, way back in Sept or Oct of last year. He gives pretty compelling reasons for the crash, but of course Gold bulls will hear none of it....until it is too late.

JackGodoy
JackGodoy

@2kaykim @JackGodoy 

Hi Kay,

I have a quick question regarding the upcoming market corrections. I have several long trades going on, and I am trying trend trading. If the markets start to crash, will that bring most stocks down with them, even though the stock i'm trading is on a long uptrend?

Thanks Kay.

2kaykim
2kaykim moderator like.author.displayName 1 Like

@JackGodoy I like how it played out today. We have bullish island reversal.   I wanna see where it closes by end of the week but I am leaning towards to say that we are bottoming out here. Also weekly hammer like candle with high volume looks convincing.

JackGodoy
JackGodoy

@2kaykim @JackGodoy 

But what do the charts say? Gold looks like it's in a bubble, and many people believe it has a lot more dropping to do. It's already dropped almost 30 % in the last year and a half. I am shorting it right now, and hope it is still a viable short. but you haven't been commenting on GOLD recently. The last I saw, you were long. Did you exit that trade or take a loss?