There’s an old joke that someone once asked Rodin how to sculpt an elephant, and his reply was “You take off everything that doesn’t look like an elephant.” That might be true, but life tells us something different. There are no two elephants that are exactly alike. The best we can hope to achieve is the outline of that universal elephant, with our own interpretation of reality. Would an elephant sculpted by Rodin be the same as one done by Dali? I’ll leave it to the reader to find images of a Dali elephant.

Charting is not a science. Those of us who stare at charts, trying to find their meaning will use their own experience, and add their own biases to their conclusions. Sometimes the simplest explanation is best. I have spent the last 15 years utilizing the tools of Terry Laundry (as I have interpreted them) as best I can. I know my biases, and try to fight them. I know sentiment can skew a conclusion. Chartists try to make sense out of reality, but sometimes reality makes no sense. You have been warned.

We are facing the possibility of building a Bear T. The Marked T-Theory chart now suggests that we have the possibility of getting a lower low in the Volume Oscillator and McOsci. This would create a Bear T that will extend until July 12.

The daily T-Theory Companion chart is posted below. We’ve moved below the lower Keltner band support of 6446.

RSI has reached the 30 level, which is barely oversold, while MACD is approaching a low similar to that seen last April. But there is a difference this time–the rate of change is much slower than it was a year ago. In my opinion, this may result in less of a sharp reversal. In fact, neither the MACD of 2020 and 2022 had this slow trend lower as shown below:

The Hourly chart shows a continuously deterioration of MACD with lower highs and lower lows:

Let’s compare the charts of the March 7 post with today’s:

An interesting note is that the dashed blue lines that were showing in the MACD on March 7 were actually lines I drew last August on the Price line of the hourly chart as shown here:

Those blue dashed lines represent what I expected to hold as support and resistance areas at that time. We are now near the lower support line, just as the red dashed line is approaching that same area. Temporarily, I’m expecting this area to be support. The above chart also makes it easier to see how different the recent movement in MACD is to its past.

However true support may lie just a bit lower than that at 6280, based on the Weekly Companion Chart that uses Terry Laundry’s 76 EMA Keltner bands:

Over the past few years, I have been using different parameters to my Keltner Bands. These were called the “Bull Run” weekly and daily charts. The Keltner parameters for the weekly bull run chart were half of the ones on the above chart. They are no longer valid, unless we are facing a situation where true support lies at 5800:

Other charts in my library are not offering an inkling of reversal.

The BPSPX chart declined below 50 (which is its traditional neutral area), and has since tried to reverse from about 35, but was turned lower when it tried to move above 40.

The “Simple Chart” is not showing a change of direction at this time either:

In fact, we have created what I call a Bearish Complex Structure, based on the following chart:

A Simple Structure allows for a quick reversal. A Complex Structure means we can stay in this downtrend longer.

As I’ve pointed out in the past, T-Theory is looking for periods of investment that offer increased strength and positive outcomes. That is not what these charts are showing me. While we may get that “bounce around 6280-6340, the structure of these charts does not make me anxious to put investment funds back to work.

The potential Bear T is a very real outcome at this time. Let’s hope my “artistic” interpretation is wrong.

Let’s begin this week by reviewing the main premise of T-Theory–it is the search to find periods of significant “extra” strength in Price. These are relatively safe entry points for investing funds. As Terry Laundry put it himself in his 1997 paper on T-Theory:

“It takes a special state of mind to “sign up” for a short boat trip, in a flimsy landing craft, to a beach completely controlled by hordes who have anticipated your arrival and have set up every imaginable way to do you in. Buying into major market opportunities presents a similarly discouraging picture. You may have good reason to anticipate profits, but if a great opportunity does indeed exist, nearly everyone will be against you, including your friends, and the predominant opinion expressed by your peers, including people you respect, will be that you are embarking on a foolhardy enterprise.”

Have we reached such a point at this time? Price is indicating we are near major support, while many internal technical indicators have resisted bottoming, and may move deeper before we find a meaningful low.

We’ve reached the period in Time where I have been expecting to see the formation of a new T, as shown on the main T-Theory chart:

It should be evident that when we have reached levels this low in the Volume Oscillator and McClellan Oscillator (McOsci) in the past, we should expect a rally.

In last week’s post, I noted that the McOsci had reached the extended green dashed line, and it might coincide with a turning point. The following Monday was the start of a 200 point rise off the low, only to fail later in the week. You can see what a minimal event that was to the McOsci as one day later it reversed course lower.

The unmarked version of the SPX Companion Chart shows us to be approaching major support at 6540. RSI has room to go a bit lower, should Price decide to move to that major support. MACD has not reached the extreme levels we saw at the significant bottom of last April, and it may not make it down that low before it reverses. But it isn’t giving an inkling of turning up at this point.

I am also watching the Advance/Decline line. We’ve barreled through support of the 20 and 50 EMA, and are heading to the lower end of support. It should be noted that this lower Keltner band line of support held during last April’s SPX low in Price. The red dashed line represents old resistance, which I now consider to be support.

On the SPX Hourly chart, RSI is at 35. A reading below 30 followed by a rise above 30 should give us a good indication of a change of direction. MACD on this shorter time period chart seems to be ready to turn up as well:

Keep in mind Terry Laundry’s notion of “frog jumping”. If we have set our envelope properly (in this instance Keltner Bands at 55, rather than the standard–based on the Optimum Moving Average), we can expect a change in direction to lead us to at least the mid-line. While we are not there yet, it is something we should be on the lookout for. As noted above, last Monday’s morning low created that “frog jump” to the mid-line before reversing right where Price had resistance.

I have had to revise the placement of the upper brown dashed line on the hourly Volume Oscillator chart. The resistance level has been moved up, which means the timing of resolution here has extended to the last week of March. At the same time, it broke through the support of the lower brown dashed line. It is another thing giving pause to making that “short boat trip in a flimsy craft.”

As I won’t be posting next week, you can find the Daily McOscillator at McClellan’s site: https://www.mcoscillator.com/market_breadth_data/

You can get most of the other information from many chart programs.

While some things on the above charts may be fairly evident, there are points that are clearly my critical interpretation. Timewise, we should see an investable low very soon. Watch those shorter term technical indicators for confirmation.

My last post was published October 18 of last year, a few days before the “Unnatural T” ended October 20. It ended with the SPX at 6735. For those who followed my postings on elliotwavetrader.net, we had a Price T that ended on December 12, at 6827. Depending on one’s point of view, either very little or very much has occurred since those two T’s ended. We now sit at 6840 on the SPX.

On February 23, I posted the following chart which looked for a new Volume Oscillator T to begin roughly around the present time period.

The present T-Theory chart looks like this:

As you can see, we have definitively broken below the zero line, and are heading for that new low. It can come at any time now, and should produce a swing trade low that will last for approximately 3 months. I’ve extended the green dashed line which first appeared last October at the bottom of the chart to the present day, and it coincides with where the McOsci is today. That in itself could be a turning point.

We can see on the following chart that lows below -60 on this chart usually lead to at least a short term bounce. We are presently at -52:

I am going to forego a deep discussion regarding the workings of T-Theory, other than to offer a link to the page on my website reviewing T-Theory Concepts. And to re-confirm one point:

T-Theory is looking for safe lows to invest in that occur after an extended period of weakness.

A concept to keep in mind at this time is that of “Simple vs Complex Structures” on the Volume Oscillator. When we have a quick turn around in the VO from a high or low, we create a “Simple” structure that can reverse Price. Should the VO create a “Complex” structure, Price can continue in the same direction as the most recent reversal.

We don’t know whether the recent move lower will create a simple or complex structure. Additionally, the VO will be adjusted Monday afternoon, and should create a picture that emulates the McOsci’s less negative view of Friday’s Price action.

The chart shown below tells us that MACD has been receding over the last 9+ months after a huge positive surge. RSI tells the same story, although unlike MACD, it has receded below neutral. Neither of these has reached an oversold reading. MFI is closer to arriving at that oversold reading.

Those who have been reading my posts for a few years may remember that in order to adapt the Optimum Moving Average to the Bull Market that was created at the end of 2022, I created a chart with a revision of the SPX OMA to the natural NDX parameters of 35, versus the SPX OMA shown above of 55:

The critical comment regarding RSI has important implications as it has waned, and has remained in a neutral area for the last few months. “IN A BULL MARKET RSI MAY NOT GO MUCH LOWER THAN 50” may no longer be relevant to the present market stance. And using the Bull OMA of 35 has definitely created resistance at the midline in a movement that appears to be foreshadowing a longer period without that internal strength.

The “Simple Chart” is looking lower:

The BPSPX chart is just reaching the 50 line, which in traditional terms means that it is neutral. However my personal reading of this is that it needs to cross above the midline from below the lower Keltner band to create an area of strength. That appears to be on the horizon soon:

By this point, you may be wondering what this post has to do with it’s title, and you rightfully can have that question. One can look these charts over and see the potential for a positive future based on being near goals in Time, or one can look at them seeing the overall technical view of the market as having deteriorated. You’re both right. We have deteriorated, but we have the ability to create a buying opportunity soon.

We’ve just about reached that point in time where we should get a positive outcome. But we need the technical signs to show us that we have actually arrived there. Be on the lookout for that low.

I’ll leave you with hourly charts that may help you make your decisions:

The Hourly VO–look for the creation of Complex Positive Structures:

The Hourly Companion Chart. Look for breaks of support and resistance:

In closing, take a look at your personal technical indicators with a view of when they pointed to a change of direction, and be open to the fact that change is an inevitable process.

Stay Safe

I’m sure that’s not a title you expected to see here. But there is an end, and it is coming on Monday. It is the end of what I need to call an “Unnatural T,” ending on October 20. I have not been invested in this T, as it never quite cleared the last hurdle to confirm it. A major confirmation of T creation occurs when the Right side of the Volume Oscillator (after bottoming below the zero line) moves higher than the last peak of the Left side of the VO (before it moved below the zero line). We didn’t get there this time.

My personal take was that we had the potential to create a Bear T from this formation, but as I posted here on September 7, “expecting the worst is not the best course.” As we came closer to the end of this T–whatever it was going to become–my concerns through other charts grew, and as I pointed out on October 1 on elliottwavetrader.net, I took a short position in SPX. While that has been profitable, it really hasn’t obtained any traction. Here are the SPX charts from October 1 and today:

There is an hourly T that is set to end on Tuesday as well, though it is not drawn on the above chart.

With the end of the “Unnatural T” on Monday, I am watching for what could result in an end of strength. That being said, I have a very tight leash on this position should we move above 6725. The present hourly chart shows a neutral RSI, but MACD has just crossed positive.

The marked T-Theory Chart was really little changed yesterday, but the lower highs on the VO and McOsci are still holding below their trendlines.

The BPSPX has moved below the Keltner bands, where it could reverse and create a buy. However, it is doing so at the neutral 50 area. Traditional use of this chart shows that a reading above 50 is bullish, and below is bearish.

The Simple chart is showing decreasing PMO, with neutral breath and volume indicators.

The standard 55 Keltner and Bull Run 35 Keltner band look as follows, and give you support and resistance levels:

As my outlook now is based on my personal reading of the charts, rather than technical certainty, I leave you to make your own decisions on upcoming direction. Never trade someone else’s plan without understanding it. Especially when it comes from such irregularly timed postings as I am offering now. Personal matters are taking up more of my time.

Stay Safe.

In my last post (September 7), I began by suggesting that those who were expecting the worst might be disappointed. The main gist of that post was that many indicators were neutral within the context of an up-trending market.

While there have been no posts here since then, I posted on elliotwavetrader.net that I was looking lower for the week that just ended. That was the case, but the weekly movement lower was minimal. (On Thursday, I posted a chart at 6575 showing that we were only 12 points from hourly support, with an oversold RSI—the day’s low followed at 6569.) And now we have returned to a market giving less clues about the immediate future.

The hourly chart shows that we have moved above the mid-Keltner line. MACD is positive while RSI is neutral.

BPSPX has hit the lower end of the Keltner band, but is still above the bullish reading of 50. Moving to the bottom of this band without moving below it allows for a rally to begin, although it is not a given that it will do so:

The Simple Chart is still showing negative Breadth Momentum, but the Volume Momentum has turned up from neutral support. PMO is faltering:

Of major concern to me last week was the Advance/Decline line. It was beginning to resemble the February/March readings, which led to the April swoon. While it held the 50EMA support, it has now moved slightly above the 20EMA reading. The next few days will be critical.

The fact that these EMA’s are now both in positive situations leaves me neutral on the present situation.

In last weekend’s post, I maintained my belief in the potential formation of a Bear T on the main T-Theory chart. That potential still exists. Following is last week’s chart to the left side of one showing the present situation:

While the Volume Oscillator will be adjusted on Monday, the McOsci is showing a return to the neutral zero line from a quick trip below. “Quick” trips create Simple structures. I’ve posted about the difference between a Complex and Simple Structure on this site since 2021, and a reference to it can be found in the T-Theory Concepts page. I explain there that I “borrowed” it from an article by Tom McClellan. These Simple structures create reversals. Complex structures, like the bullish one that has been circled ( for many months) above in May, create lasting moves.

In the present case, we will have to see early this week whether the McOsci can move above, and stay above that zero line. Right now, it is resistance. The VO, on the other hand, appears to have created that Simple structure, but we know that Stockcharts adjusts it during the following day’s trading. It should still remain below the descending trendline.

For those who don’t have the ability to chart the McOsi on its own, the “real” version of it can be found here.

It would be wrong of me to put a bias on the meaning of the information given above. I’m glad that I’m not obligated to spin these charts in any direction. You’ll have to make your own assumptions, as I am waiting to make my own. This week could be a critical component of that process.