MomentumCycles

To quote from the Momentum Cycles update for the open of Wednesday, June 10, 1998:

"A distributive day in many issues,but not much in index price.Equity put/call slightly bearish.A formation of descending tops has formed in many indexes, and a pullback or hesitation often occurs in this chart formation.When {or if}the descending tops are broken to the upside, you can get short term fireworks-witness the transports on Tuesday.

Greenspan due to speak Wednesday,and our PRE indicator did not give a clear signal as to what the market reaction is likely to be.We use certain patterns of BKX action the day before a report to gauge likely market reaction,and Tuesday's BKX did not give a clear signal.

CRB heading towards the predicted chart target of 210,which tags the bottom of the descending channel.Break that, and its the 12 year low of 198.Close was 211.51.

XAU had a marginal Stochastic 20 crossover above 20,on light volume.The 70 region seems to be recent support.

OEX is resting on the 1995 regression channel line for another day with the projection oscillator at overbought. DJI 21 and 50 day moving averages place the DJIA at 9000.

NYA breadth weakened and the McOsc is rolling over in the neutral region just above zero. CODI is near the Sell Alert Line. ADHL remains on a tenuous buy. NHNL is still indicating a corrective mode or the start of something worse. Flow Rate had multiple negative TICK readings in the afternoon casting a suspicion over any upside on Wednesday."

MOmentum Cycles Update for the open of Thursday, June 11, 1998:

Monday's update suggested a correction within two days,due to high positive closing ticks 2 days in a row.So it was.Wednesday,on the other hand, had an intraday -1156 tick.Successive daily high negative ticks can set up a short term oversold condition.We had looked for a midweek pullback that usually occurs in the second week of the month prior to e week,so the remaining RSI OEX long call position was exited Wednesday at prices from OEX 540 to 546 cash basis.

A trade that often works is to buy long calls Friday prior to E week and sell into the first sign of strength in E week.We will look for that setup, but the bearish position of some of the indicators below may preclude this trade.

We had noted the recent tendency of bonds rallying forecasting an equity sell off, and so it was Wednesday.A global sell off of non dollar denominated assets,fleeing into the perceived safety of a solid dollar and rallying T bonds.3rd world,Asian or developing markets weakest{ for example,Russia-6%,Pakistan-5%,Brazil-5%,Mexico-4%,India-5%},and money able to leave those markets entered T Bonds.FNM -our bond proxy - overbought with STO 5 near 100 and STO 15 at 100.A preview to bond profit taking?Perhaps so.

Weak bonds-less fear.

XAU playing footsie with the Stochastic 20 crossover,back below the 20 level.

CRB tagged the target of the channel,low 210.55,close 211.29.Below 210 the 12 year low is 198.

CMR.TO 5000 bid at 1.08, only 700 asked at 1.10.Triple bottom seems intact,with a strong buyer able to take this one to 1.65 in one day.

ASTN support at 2 1/2 ,close 2 3/4.

Trend:

OEX continues to hang onto the 1995 regression channel line. Projection oscillator is just beginning to roll over. ADHL is on the verge of canceling the buy signal and changing to a sell mode. DJIA has an up rating of 5 and down rating of 95 on the artificial intelligence engine. DJI closed below the 21 and 50 day averages. If the DJI is below the 50 day average as of the close of this week, then we should see additional selling on Monday. So take a look at it on Friday and see if selling is accelerating into the close because of look-ahead-selling, or instead if the typical pre-e week Friday trade may be suitable. More on this for Friday's commentary.

Astrocast:

Earnings reports won out over interest rates as the catalyst in the drop the DOW contest. The DOW is still lagging the Astrocast. We should not expect a one to one correlation, as the DOW is subject to numerous influences, whereas the Astrocast is predestined. If this is to work, then the DOW overall trend should be similar. At the present the DOW appears to lag the Astrocast.

Breadth:

NYA breadth deteriorated to the point where a sell signal is imminent on the McOsc. CODI is deep into the Sell Alert Zone. NHNL is back below zero again as would be expected in a bear market or deep correction.

Volatility:

Zone Timer has backed off from overbought and is crossing the center line. This sometimes has the effect of producing more selling until the oversold zones are reached. MVI's continue on their sell signal.

Momentum Cycles Cone:

536 looks like a foregone conclusion for Thursday and if things get hectic then 530 to 532.5 is the target for a strong down day. Note the projection oscillator direction.

Pivots:

OEX Pivot support levels based on one day history are similar to the Cone levels which are forward looking and based on implied volatility.

Fibonacci Zones:

Upper fib resistance is proving to be a rock wall. Daily stop losses(red stairsteps) and weekly balance lines(red horizontal dashes)are under siege on Thursday.

DJI NDX OEX SPX TYX XAU

RSI, SMI:

All are bearish looking.

Stocks of Interest:

ASTN and CMR comments are in the intro.

OEX Trades:

No new positions, all have been exited per Tuesday's update. A long term trend filter is preventing the activation of puts in the mechanical models.

To quote from Momentum Cycles Update for the open of Thursday, June 11, 1998:

"Monday's update suggested a correction within two days,due to high positive closing ticks 2 days in a row.So it was.Wednesday,on the other hand, had an intraday -1156 tick.Successive daily high negative ticks can set up a short term oversold condition.We had looked for a midweek pullback that usually occurs in the second week of the month prior to e week,so the remaining RSI OEX long call position was exited Wednesday at prices from OEX 540 to 546 cash basis.

A trade that often works is to buy long calls Friday prior to E week and sell into the first sign of strength in E week.We will look for that setup, but the bearish position of some of the indicators below may preclude this trade.

We had noted the recent tendency of bonds rallying forecasting an equity sell off, and so it was Wednesday.A global sell off of non dollar denominated assets,fleeing into the perceived safety of a solid dollar and rallying T bonds."

Momentum Cycles Update for the open of Friday, June 12, 1998:

Longs were advised to exit all remaining OEX positions Wednesday early on.Why?

We thought we would display the CODI chart from June 10th commentary first,with the tag of the sell zone.CODI has behaved well in forecasting trend changes in all except the most severely trending markets{such as late February to March},and shines in typical and more frequent trading markets prone to intramonth reversals.The cyclical probability of a weak mid to end week of pre ex week was also discussed Monday,June 8th, as well as high closing ticks on multiple days.3 day cumulative breadth also turned down Tuesday.A turn up in 3 day cumulative breadth is a good confirmation of a rally, and a turn down in this indicator points to weakness ahead.

Bonds at new 52 week highs,but FNM did sell off,showing the bond rally is Asian and 3rd world capital flight into dollar denominated debt.More fear-strong bonds,less fear-weaker bonds.Japanese futures predict more Asian fear for Friday.The 14000 level is important for Japan,which if broken,projects an extreme of fear likely to spread through Asia.

DJIA 8750 is the right shoulder of the head and shoulder pattern,which if broken,projects a run on stops to a probable price level deep in the CODI buy zone- if so, wait for a pivot in the buy zone similar to previously highly oversold conditions.Its important not to anticipate a buy if important support is broken.High negative ticks on multiple days most often bring an oversold condition,but Thursday's high negative ticks did not produce an afternoon reversal.Up mornings and down afternoons are generally a bearish environment.

XAU never plowed strongly up through the stochastic 20 level on high volume, and instead,reversed. STO 20 is down in the bear trend level of 10.An oversold bounce could happen, but until STO 20 closes strongly above 20, we'll stand aside from both long and short on XAU,due to STO weakness and the simultaneous oversold position.

CRB at 210.51, and if 210 breaks, the 12 year low is 198.

Trend:

Snapshot chart shows the extreme levels of the more important indicators intraday. One interesting occurence was the -1447 TICK momentum low at 11:30. That was followed by rallies back to zero and then selloffs to the -1000 TICK level repeatedly during the day. Finally the last hour had a rising TICK and prices falling again to their earlier intraday low. This late afternoon period was also followed by repeated sell programs evidenced by PREM dropping below the Sell Program level using the September futures. This Price, TICK, PREM divergence seems to be saying something about Friday. We will know soon enough. In the meantime we may just have the set up desired for the "buy the Friday close of pre expiration week".However,this time the trade setup may not work. It is too early to tell and it is absolutely necessary to see if Friday is more shocking than Thursday. With all the program selling late in the day, there must be some sophisticated institutions that believe prices are headed lower, or they are implementing the program trade insurance right in the heat of the battle.

OEX regression channel projection oscillator is nearing the 50% retracement level where we have a chance of a reversal. The red regression channel line is easily within a few minutes of trading at todays rates. This is where we should at least expect a pause. However, next Tuesday, 6/16, is tagged as a high energy point, a change in trend point. Here is a DJI chart.

Astrocast:

Astrocast has a "high" on the 12th followed by a two hundred point range the rest of the month.

Breadth:

McOsc rolled over and closed below zero on Thursday. NHNL is looking more and more like we are seeing a real bear mode. CODI made a sell pivot. ADHL is still tenuously hanging onto its buy mode.

Volatility:

VIX reporting was essentially nonexistent today so the Z Timer and MVI are slightly in error. Both continue on their sell trends which is a reasonable reflection of the events for today.

Momentum Cycles Cone:

The Cone is also in error due to the VIX reporting problems.

Fibonacci Zones:

The daily stop losses and the weekly balance lines could not hold back the onslaught of selling. Even the collars just slowed down the inevitable.

DJI NDX OEX SPX TYX XAU

Pivots:

OEX pivots are stepped downward for Friday and the OEX opens below the keyline and hourly trendline. As of 9PMET the follow through on Globex has dissipated. Puts entered on Monday or Tuesday are at risk of a Pre E week Friday rebound.

RSI, SMI:

Bearish looking.

Stocks of Interest:

ASTN still has support at 2 1/2 and resistance at 2 3/4.A 10 K is to be posted on Tuesday on the company website, which ASTN's president said will discuss exciting company future plans. CMR UP 5% today.At 2 p.m.,2000 were asked at 1.20,3000 at 1.30, 5000 at 1.40, and 5000 at 1.65.One buyer could test previous resistance at 1.65 with a couple days trading.We suspect exciting news is in the works for this issue,due to their recent recognition as the ONLY North American primary cobalt producer.Cobalt in high grade estimated to range in the mid to high 20's for the next several years.

OEX Trades:

Monday or Tuesday it was advised here that put postions could be entered as the last of the oex calls were exited. Here is a chart of the June 540 put, OEWRH, and what could have been achieved. Also, here is what happened to the OEWFE, OEWFF, OEWFG if you did not follow the advice to exit Wednesday between 540 to 546. The Mechanical Trade Models used for reference are still flat.

Momentum Cycles Update for the open of Monday, June 15, 1998:

Exiting all remaining OEX calls last Wednesday at the very top of the failed retracement rally,with a bearish confirmation from the CODI position, seems to have been correct.

Now, was Friday a short term OEX bottom?

Major analysts are sharply divided in their opinions.John Murphy,of MurphyMorris ,Inc.,was quoted this weekend as saying yes,and that the key support that held was 8700.Murphy has 40,000 readers,and is widely followed.

Victor Weintraub of FirstCapital Corp.,on the other hand,is quoted as seeing more follow through to the downside short term, as the lack of a selling climax precludes a Friday bottom.

What was Friday's action like?Intraday support Friday was seen at the lower 3.5% trading band, and the DJIA closed halfway between the lower 3.5% band and the 21 day moving average.The put/call ratio shown in IBD Friday was .81, a level bullish reversals have occurred at this year 2 times before, once in the January 10 area, and once in the April 7 area.In wipeouts,this ratio can go to 1 to 1.We have had multiple days of large negative downticks{-1000 plus}, which often occur near short term reversal points.Support has often been seen near the 200 day moving average of the IBD mutual fund index, which is slightly below where we ended Friday in price.

Slower measures of trend paint a slightly different picture,notably 3 day cumulative breadth and volume still dropping and negative.5 day rate of change is -3%,not the wipeout -5% that mark extreme oversold price points.

Most notably,both European and Asian markets are strongly down in early a.m. Monday trading.Recently, European and U.S. markets have returned to correlation,with Europe leading.

Intraweek cyclical probabilities,using NASDAQ prices,support a low about June 16th.

As always, if using the mechanical trade models, shown at the very bottom of the page, use no more than 1/10 of your trading capital for each trade, with risk no more than 1/2 of the initial option price, or preferably, use a $1.50 stop.

CRB has hit the initial target of 210, with a close at the 5 year low of 210.26.The next target, if that is decisively broken, is 198,the 12 year low.

XAU very oversold, but price momentum on a moving average basis still dropping, and STOCHASTIC 20 below 20, without a confirming crossover on higher volume.Long periods of low stochastic readings in the below 20 area on light volume are symptomatic of a bearish environment for an index.Oversold rallies in that environment are usually violent and over quickly.

CMR.TO UP 5% to 1.20.Last set of asks seen Friday a.m. were 2000 at 1.20, 3000 at 1.30, 5000 at 1.40, and 5000 at 1.65.Not a lot of sellers at this point,unless new supply comes unexpectedly into play.As mentioned before, CMR is the only primary high quality cobalt producer in North America, with projected demand for this metal expected to rise 6% a year for the next several years,with prices in the mid to high 20's.

ASTN fell to previous support of 2 5/8 on extremely light selling.10 K due out Tuesday,with company plans for the future due to be announced.ASTN plans numerous spinoffs of divisions as IPO's ,with cash from the spinoffs going into ASTN's share value.

Trend:

OEX regression channel hit the red line. ADHL is still holding. NHNL says consolidation/correction is the order of the day. Expiration week typically sees strike price range shifts in a choppy affair. June expiration, being a triple witch, can have a strong overall trend, especially on Friday. Here is the snapshot chart.

Astrocast:

Updated astrocast says down into 6/16.

Breadth:

CODI has been on a sell pivot, but is now at the center retracement band noted by whipsaws. NYA breadth did not really support the turnaround in prices intraday.

Volatility:

Z Timer is on the lower side of neutral. MVI regular is closer to the buy band.

Fibonacci Zones:

The equity indexes ended last week with a hammer candle and start the next week near the balance level(red dash line). Ratio oscillators have hit the 50% retracement band supporting an upward price movement - at least a bounce has a better than even chance.

DJI NDX OEX SPX TYX XAU

Momentum Cycles Cones:

Projection oscillator held at the 50% level on Friday.

Pivots:

Week starts with the OEX on the Keyline. 50/50 odds for direction.

RSI, SMI:

Oversold short term on RSI and bearish longer term on SMI.

OEX Trades:

OEX mechanical momentum model is buying the July 530 calls Monday on support (Support levels from the pivot chart or the cone chart).

Remember a suggested 1.50$ stop loss or trendline stop should be used for all long OEX trades!

To quote from the Momentum Cycles Update for the open of Monday, June 15, 1998:

"Exiting all remaining OEX calls last Wednesday at the very top of the failed retracement rally,with a bearish confirmation from the CODI position, seems to have been correct.

Now, was Friday a short term OEX bottom?

Major analysts are sharply divided in their opinions.John Murphy,of MurphyMorris ,Inc.,was quoted this weekend as saying yes,and that the key support that held was 8700.Murphy has 40,000 readers,and is widely followed.

Victor Weintraub of FirstCapital Corp.,on the other hand,is quoted as seeing more follow through to the downside short term, as the lack of a selling climax precludes a Friday bottom.

What was Friday's action like?Intraday support Friday was seen at the lower 3.5% trading band, and the DJIA closed halfway between the lower 3.5% band and the 21 day moving average.The put/call ratio shown in IBD Friday was .81, a level bullish reversals have occurred at this year 2 times before, once in the January 10 area, and once in the April 7 area.In wipeouts,this ratio can go to 1 to 1.We have had multiple days of large negative downticks{-1000 plus}, which often occur near short term reversal points.Support has often been seen near the 200 day moving average of the IBD mutual fund index, which is slightly below where we ended Friday in price.

Slower measures of trend paint a slightly different picture,notably 3 day cumulative breadth and volume still dropping and negative.5 day rate of change is -3%,not the wipeout -5% that mark extreme oversold price points.

Most notably,both European and Asian markets are strongly down in early a.m. Monday trading.Recently, European and U.S. markets have returned to correlation,with Europe leading."

Momentum Cycles Update for the open of Tuesday, June 16, 1998:

Seeing early global marts Monday a.m. made a likely trip to lower support levels obvious early on. It appears as if the net NASDAQ point loss from last Friday close to this Tuesday close will be strongly negative.Often the Tuesday area marks a short term reversal point, leading to at least a Tuesday close-Friday countertrend bounce.CODI is now in the buy region, and any relative improvement Tuesday or Wednesday in NYA breadth and volume from Monday's action will generate a short term buy pivot.Of course, if price action continues increasingly negative Tuesday,CODI can make an even greater spike into the buy region,similar to last October.Other indicators are now in areas that normally would begin to bring a countertrend bounce.5 day rate of change is -6%,very oversold;closing tick was -821, which normally brings a rally within 2 days;put/call was .91, almost 1 to 1.

The selling today was partially caused by a violation of the DJIA right shoulder{8700-8750} of the head and shoulder pattern,which can cause crashes and panics.It does appear as if some institutions are attempting to sell rallies,rather than the previous pattern of buying dips.That does not preclude an oversold bounce.OEX models at the bottom of the page.

Trend:

OEX closed below the July 1996 regression channel line with an accompanying oversold projection oscillator. DJI channel chart broke below the -3.5% channel line referenced to the 21 day moving average. The DJI stochastic momentum is nearing the oversold level.

Astrocast:

Tuesday is indicated as a down day on the AstroCast chart

Breadth:

NYA breadth was quite negative all day on Monday. NYA support was tested all the way back to the end of May and early June. ADHL is still tenuously long. NHNL is deep into the corrective phase. CODI is on the Buy Alert level. McOsc issue and volume oscillators are oversold but have not turned up yet. Volume summation is still dropping in a longer term bearish mode. Short term tradeable rallies can occur in this mode.

Fibonacci Zones:

Support was found in the Weekly Fib support zone for the equity indexes. Ratio oscillators for equity indexes are between the 50% retracement level and oversold level. Even the TYX closed in the weekly fib support zone.

DJI NDX OEX SPX TYX XAU

Volatility:

Zone Timer is deeply oversold at the level it reaches in bearish modes. Once a true bear market sets in we would see the Z Timer tracking in the lower zone. MVI reached the Buy Alert Zone outside the band.

Momentum CYcles Cone:

Cone 1 shows Monday was a class Red Cone day and the projection oscillator reached the oversold level. Cone 2 shows the OEX near the regression channel support level #2. Average volatility has increased increasing the odds for wide swings either direction.

Pivots:

OEX closed in zone 2 and is expected to open in zone 3 below the Keyline on Tuesday. The odds for finding support and resistance and reaching certain zones is posted on the chart.

RSI, SMI:

Oversold short term. Bearish looking longer term.

OEX Trades:

The OEX mechanical RSI, TRIN, Volatility models triggered a buy on the July 520, OEWGD, calls for Tuesday, entered at the S1 or preferably S2 level. This is in addition to the July 530, OEWGF, call added at S1 support or lower on Monday.

Stocks of Interest:

ASTN and CMR both undergoing light volume selling near recent support.CMR has 500 shares asked at 1.15,and less than 20000 to 1.65.Sellers have dried up on each retest of the recent triple bottom.ASTN has buyers near 2 1/2.

Momentum Cycles commentary for the open of Wednesday,June 17,1998:

Weak bonds,strong stocks-so it was today as discussed recently.Another day of CBOE put/call near .84 after .91 yesterday,showing a slight short term lessening of fear from its recent extreme,an intraday tick of -901 AND +715, with a closing tick of +611.Still oversold ,with 5 day rate of change near -5%.3 day cumulative breadth still falling-if this turned up,we could get more than an oversold pop.More than one day up would restore some confidence.

Day traders{or nervous bears!} might use trendline or channel stops for recently initiated long positions,others with a longer term horizon should use the often suggested 1.50$ stop loss from the initial purchase price as risk.

Global equity continuity rallies,especially in Europe early a.m., would help here.

XAU pop off the bottom from STOCHASTIC below 10.For XAU legs we need a STO 20 crossover above 20 on rising volume.Not there yet.

Trend:

OEX reg moved up just under the red channel line. Maybe Wednesday will see it punch through to the upside. The projection oscillator is deeply oversold. ADHL remains on a buy signal. NHNL is still deeply into the corrective mode as it was back in October of 1997. Take note of the SPX lows near 1074 and the number of times it has tested support. DJI SMI has moved into the oversold region and into the -3.5 to -5% correction from the 21 day moving average. Note though- the correction off the high is more than this. The DJIA has corrected 7.47% from the intraday high on 5/4/98 to the intraday low on 6/16/98. Here is the Snapshot chart.

Astrocast:

Astrocast is generally upward into the end of the month.The cash flow model,which uses a slightly different timing method,looked correctly for a bearish period between June 3 and June 24.If expiration is up, a secondary low may occur about the 24th of June,after futures and options are unwound.This fits with the astrocast secondary low which occurs about June 25.Cash flow cycles would normally see a high about July 2.

Breadth:

McOsc issue and volume have turned up from deeply oversold levels breaking the 10% component in a buy signal(not shown). Volume oscillator needs to move above zero before the Volume summation turns up. CODI has not turned yet in a strong buy mode, but has made a "knee" as a trend change indication. NYA breadth was quite positive all day and ended with declines below the magic 1200 level.

Fibonacci Zones:

Weekly Fib support held again as the ratio oscillators hit the oversold zone. Yields are working higher.

DJI NDX OEX SPX TYX XAU

Volatility:

Zone Timer has pivoted upward generating another buy signal. MVI generated a beautiful buy signal by moving above the upper bands and back under.

Pivots:

OEX Pivot-MoPivots: OEX closed above the Keyline and the hourly trendline increasing the odds for continued rally on Wednesday.

Momentum Cycles Cone:

Support 2 was found at the lower regression channel line. Cones have been extended to Friday showing the potential price range with current volatility. Should we get a rally into Friday, then the cones will narrow reducing the price expectations somewhat.

RSI, SMI:

RSI charts look short term bullish. SMI is still looking longer term bearish.

ASTN, CMR:

ASTN is testing 2 1/2 ,awaiting news on any of its many initiatives.It now has the capital to push forward,and make purchases of other related companies in the field.There are a lot of impatient sellers in this issue,as well as long term buyers on weakness.

CMR in the 1.12 area,with an apparent lessening of selling pressure.It would be reasonable to see some cash flow from this company from WERNER LAKE cobalt this year.

OEX Trades:

Momentum model holds the July 530 call and entered early as usual. RSI, TRIN, VOLATILITY models hold the July 520 calls. There is no one perfect model to use for trading options. Using a diversified group of models can reduce timing risk. It is unusual for three models to enter on the same day as was done with the RSI, TRIN, Volatility. This might speak to the validity of the entries. Here are the OEWGF and OEWGD charts.

Momentum Cycles Update for 11.30 a.m.Wednesday, June 17, 1998:

Due to a file error,Wednesday's a.m. commentary was accidently deleted at 11.30 a.m.when we attempted to make an extra a.m. post.Needless to say, we are sorry.Those who entered long OEX calls as instructed Monday or Tuesday should trail a 1.50 stop from their entry price,and/or not give back more than 1/2 their gains from the initial entry.Sorry for the error.

Momentum Cycles commentary for the open of Thursday, June 18, 1998:

Weak bonds,strong stocks again Wednesday,with help from overseas markets,up here over 200 DJIA points intraday,more from intraday Monday or Tuesday.Very fast move down in bonds and up in stocks, so a bit of profit taking in bond short positions{remember we prepared you for this with our prescient FNM -bonds non-confirmation comments before the recent bond selloff!}, and equity long positions wouldn't be unexpected.A retracement after expiration would also agree with a secondary money flow low about June 24 prior to a month end pension fund driven rally the last week of the month into July 2.

Weak dollar,weak bonds, CRB and XAU pop,although just to the lower 3.5% trading band on XAU.For more than this, some longer term moving averages are going to have to turn up.If the dollar ever does tank, today's CRB and XAU action are a probable preview of their turnaround.

ASTN resistance now 2 1/2 ,on impatient sellers.For those with patience,a chance to pick up a little here cheaper for a large potential return when some of their exchange trading systems go in foreign markets later this year.

CMR.TO slowly exhausting sellers in the 1.05 to 1.30 area, above that its 1.60.Mill for cobalt and product to be milled ready to go,and a contract for the product is likely within months, as well as probably excellent cash flow in relation to the present share price.Cobalt prices strong, unlike other commodities.

TREND:

OEX reg stopped just below the 1995 blue channel line. Thursday's nearby targets are indicated beside the blue vertical line. Projection oscillator is at the 50% retracement line. Because the OEX is at resistance and the Projection oscillator is at the retracement level we should expect some consolidation on Thursday. Infact we have a sell/consolidation signal developing in advanced stages in the intraday Timing chart. ADHL remains on a long term buy. NHNL is much improved but is still in the negative percent region and the SPX is a few points under resistance of a downtrendline. DJI did not make it above the 21 day average which has the feel of resistance for Thursday.

Here is the flowrate chart.

ASTROCAST:

Astrocast has some negative influences on Thursday with a positive influence occurring late in the day. So the expectation is for correction/consolidation in the AM and early PM with a rally into the close. Specific times are 1:15PM ET and 3:15PM ET. Look for the last hour rally.

FIBONACCI TRADER:

Weekly Balance lines (red dashes) provided resistance on Wednesday with the Ratio Oscillators coming off of oversold levels. The weekly balance might give us some pause on Thursday morning with rally attempt above the balance line by the last hour.

XAUTYXSPXOEXNDXDJIA

BREADTH:

McOsc issue and volume are much improved with their close at the zero line in the center of the Neutral zone. OEX resistance is at 548, but we might not see that until Friday if even then. CODI still has not made an encouraging Buy pivot even though it has generated a Buy signal with its pivot. An encouraging one would have a precipitious drop to lower CODI levels like the center white line.Here is the OEX regression chart.

NYA breadth was of the uptrend inducing quality with advances well above 1200 and declines well below 1200. A McOsc crossing above zero is traditionally accepted as a buy signal and the Snapshot does show the Premium in Buy Program territory for Thursday AM. This can change quickly overnight. In Bear markets the McOsc zero line acts as resistance when the oscillator approaches from below. It can pass above for a few days and still have the mkt remain in the correction/consolidation mode.

Here is the snapshot chart.

VOLATILITY:

Zone Timer has reached the center of the neutral zones at the close of Wednesday's trading. MVIs are still on a buy trend but have also struck the center neutral band. Thursday could see a consolidation of the Wednesday move.

Momentum Cycles Cones:

Cone1 shows we had a Crash up day on Wednesday. The projection oscillator has reached the 50% band where odds of a reversal or consolidation of the recent move is likely. The close was near the center regression channel line at support 1 leaving a lot of potential price movement to Support 2 or Resistance. The Keyline is also coincident with this center regression channel line. Statistically we have a neutral mkt for Thursday which will erode option premium and set up a "regrouping" for another attack at upward movement on Friday.Here is cone 2.

Pivots:

Thursday is somewhat discouraging for the OEX because of its close in Zone 7 and expected open in zone 4. This gives 73% odds for support in zone 2 and 63% in zone 3. It has a 55% chance of reaching zone 3 and 49% chance of reaching zone 5. Of course stats lie and we have to follow what the tape tells us as it unfolds. The OEX opens near the Keyline and slightly above the hourly trendline which in and of itself if positive as secondary buy signals are generated on pullbacks to the hourly trendline when in uptrends.

RSI, SMI:

RSI looks short term positive having crossed above the center band. Only caution here is the band acts as an attractor so the XAU, TYX, SPX RSI could be "sucked" back to the center band on Thursday. Expectations would be for the center RSI bands to provide support on Thursday AM with the up move to continue on late Thursday and Friday. SMI is trying to turn up for these three indexes. Unfortunately for the SPX SMI, it is still near the longterm overbought line. The XAU and TYX SMI are below the oversold line meaning bonds have greater downside potential(Yields up), XAU has greater upside potential than the SPX has upside potential.

OEX Trades:

This was an exciting day for those who followed our advice and the models in order to trade the OEX June and July calls. If you bought them, then you now know the reason why some traders dedicate their life to OEX trading. June calls posted here are the OEWFD 520 CALL and the OEWFG 535 CALL. There may have been better choices, these are just examples of what happens with Gamma trades. The June 520 call made an 800% move before profit taking came in. The July 520 and 535 calls were recommended by the Mechanical Model for end of day types, because of the risk of June calls having an intraday reversal or gap opening that would wipe out the position with only a few days remaining to recoup losses. The Timing chart shows this particular move had a confirmed BUY around 3:10 on 6/15 and a POTENTIAL SELL coming up around 9:45AM on 6/18. Thursdays tend to be weak to down and profits hit the 50%+ level on Wednesday when the 1.5 trailing stop loss off the high was hit. So disciplined traders would be out of the positions now.Here is OEWGF and OEWGD.