Markets did a minor bounce after a big plunge down below support on Thursday. The move up were on no volume and we made a so called perfect "backtest" of the broken support. Now after backtesting support which is now resistance we moved up and then plunged back down after touching it near day end - perfect.
By fundamentals you can really see how MANIPULATED markets is , Asia was plunging down with one of the worst disasters in Japan - but WHO CARE's in the US - just lets be green and rally... yeah yeah , that just shows that FUNDAMENTALS today has nothing to do nearly - but the big boys are running the show - thats why technical analysis works a lot better cause you could see that we needed that backtest BEFORE plunging further down.
So that sets up for a nasty move down on Monday in markets.
The short term trend is still down - so no reason to buy - we should see shortly 1250-1270 by next week imho.
IF the bearish rising wedge as we BROKE down will play out - we should see the start of the upper trendline which is near 113 SPY or so - which means SPX could see 1130-1150 area as I have been calling for. I still believe we will see below 1200 SPX by end of month but time will tell and remain short big SPX 1333-1330 area.
All in all - watch out for more weakness ahead in next week and SPX needs to break above 1315 first to begin look bullish again until then the short term trend is down and no reason to buy.
Have a nice weekend
love your graph annotations.
ReplyDeleteShort all the way.
Actually I am short over the next 3 years..
Hi and thanks for this great blog-may I ask your time table for 1130 or so?? Allso-please keep posting over at Xtrends-we're greatful for your posts-thank you!
ReplyDeleteHey Sqwii, I was wondering how you got that 113 on the SPY chart. I understand a breakout from the rising wedge could make the price go to 120 but why is it pulled through till 113? Thanks
ReplyDeleteHi Peter
ReplyDeleteI am short and holding shorts , no reason for now to cover - as we should see a lot more weakness start when we break below MA(50) probably start next week.
John
Thanks a lot hope you enjoy - people are going to buy the dip as they have done last 6 months - they bought it at 1320 - 1310- 1300 and will be buying lower , but this time they will be screwed until they give up and take the loss which will mean more panic selling in the end of this correction. I'm not a perma bear as I think this is only a correction before we start rally up again. But for now my time fibs telling me that the correction could last until March/April this time area...
Arno , IF the pattern is to be completed with the bearish rising wedge - we should see the start of upper trendline and also remind you that the horizontal line on chart is heavy support from past.
Most people think we wont go lower than 1280 or so before going higher - but I think we will see a much deeper correction and its just starting with the breakdown of wedge last week and backtest of broken trendline on friday.
The dollar should continue to move up and the euro should fall (guess problems with Portugal comming...)
Arno actually the real target for the rising wedge pattern would be the "start" of the purple line which is right below 110 SPY - but I really dont think we will see that low - but agree 120 is the first target then price/action will tell us. I just dont believe we will start a new rally up here.
ReplyDelete