When there is no T, one needs to use other tools to make market decisions. We’ve had long stretches in the past where there were no equity T’s, and when we have such periods, choices must be made as to where we are. We look at other asset classes to see what could be developing. As I pointed out here a while ago, there is no equity T on the horizon. That didn’t mean equities would fall; it meant that we shouldn’t see periods of heightened strength. There are other tools on my website that offer relevant information, and I have to say that all measures of support have held since the end of the last T on January 26. We closed that T at 4900, and since then the market has followed a line that was impressively higher, adding 4%.
While I didn’t participate in that, I did manage to find a GLD T that offered a return of almost 7%. I closed that at 198, but closed the GDX trade I began at the same time way too early. Also, the initiation move I suggested in Bitcoin on February 7 seems to have been realized. I did sell my TLT and IEF, but as I never posted those sales, I’ll just say that I don’t own them at this time. I do still own SHY and shorter term Treasuries.
When I began the GLD trade on February 13, I noted in my post that it was only 1% away from major support. A few days later, I posted on elliottwavetrader.net that I foresaw an hourly T that should last until the beginning of April, with a short term T ending February 23. On February 23 we had a move down from the upper Keltner which held support.
GLD continued to move up, until it peaked above 203, and has now returned to its support line at 199.32
The above summarizes what was, and now it’s time to look at what may be.
While the trade I put on was based on an Hourly T, the chart shown above enlarges the view on a daily scale. That is one method to enter a longer term T near its low–find a short term T and then review how it can grow into a Daily, longer term one. Unfortunately, my personal point of view is that this T ends tomorrow. I have included a shorter term T that could end April 13, but I don’t believe that will be the future course.
Moving on to equities, I’ve made it clear that I don’t see a T being formed in the near future. However, the end of this week did change the future landscape a bit. We have finally broken the trend line of higher lows that has existed in the Volume Oscillator and McOsci since the middle of January:
Since the end of the last T, I have been pointing out that until there is a break of support, those invested in this asset class should be wary, but not panicky. If you have looked at my Revised Chart Page recently, you will see that I added a 2024 Bull Run Companion Chart. This chart uses the same Keltner Bands as the ones I use for NDX. They are based on the 35 EMA, rather than the 55 EMA that I have historically used. But it also uses an Optimum Moving Average of 20, rather than 35. You can see that the standard EMA of 20 has held any reversal in check since January, and that is now a number that can be used as the first line of support. I’ve pointed out in the past that in a strong market, one shouldn’t expect RSI to move below the midpoint of 50. That is another support level to keep an eye on. (I will keep this chart on my site until it no longer works, and I will then revert to the standard 55 EMA.)
While stocks are pricey, until support is broken, there is still underlying strength. Looking at the hourly Volume Oscillator chart (based on the MACD of $NYUD), we can see that there was impressive buying off the low on Friday:
Yes, we still are very overbought by traditional measures. Here is a look at the weekly Companion Chart, using Terry Laundry’s weekly Keltner bands mased on the EMA of 76:
But until we move below 5044, we still have support, just as we have support until the technical indicators move below their respective overbought positions.
Right now, the BPSPX and Simple chart are beginning to look weak, but haven’t fully developed negative outlooks. Watch these two charts, and keep an eye on the A/D line chart as it has begun to move down to the first level of support at 8090. With that said, I hope you’re looking at Price as the main component for future decisions.
While I’ve had little to say regarding standard T-Theory since the end of the T on January 26, I hope you’ve noticed that I have spoken of support, and percentages since then. We have lots of points, but only a few percentage points before we need to worry about a larger correction.
I have to put this in the perspective of two of my major prior equity calls. The November 2019 “Halloween” chart, that showed me the possibility of a massive move down in February 2020 also had a T ending in January 2020. That got me protective. The second call was at the end of the January T in 2022, which was followed by abreak of support at 4600 on SPX that stopped me out, and kept me safe on that move down while still being able to find short term T’s for the rest of the year. My point here is that I don’t need to get out of a market at a top tick–I’m preserving capital, with less risk than I would take if I had a longer time perspective. That may not be your case.
T-Theory Thoughts 