Markets keeps grinding higher on low volume and near my original short position. I added shorts today at SPX 1330 as we move higher , as more we will be about to fall lower. Remember those small window dressings into quarter end + low volume rally can be erased in a matter of a few days. Since 1250 there is nearly no support at all until then - cause we got up slowly in a straight line. So there is not much heavy support to the downside when we start to fall.
Today we have EU Bank Stress test + FED bank loans data I am looking forward too which may be a trigger.
I think a steep steep sell off is still in due and should take us LOWER than 1250 and most likely below 1200.
Bullish sentiment just sky rocketed since 1250 and all bears left the towel on the floor - now everyone calling for SPX new highs above 1344...
If COPPER is any leading indicator - then we should see a nice flush down as copper was down another -2% yesterday and have been plunging last days, markets should follow up IMO.
The SPX has a TRIPLE bearish MACD divergence , with MACD lower lows and SPX higher highs - that is one of the most bearish signals you can get , usually we just get one bearish divergence before plunge , but at the moment we have a triple bearish divergence which should play out next - heavy selling should come in the next weeks. If we look at cycles - then the time we spent up is the same time now as we spent down in mid March. If so we should see another 1-2 weeks going down from here - so perfect spot to add to shorts imho as what I did yesterday 1330.
Lets take a look at TZA for example - here we have a TRIPLE bullish divergence with MACD higher highs and TZA price lower lows - this is extreme bullish for the short term and thats why you should expect a big rally to come - also a bullish falling wedge forming with breakout soon.
Copper breaking down - have a nice HS pattern with target of 50 in next weeks - markets should follow down , so watch out below.... SPX will see below 1250 in next 1-2 weeks imho
As you can see we formed a bearish rising wedge since the 1250 with not much of consolidation or pullback, this is what I believe we will break down of next - take out the 1250 lows and move to my target 1180 area. I see shorts as a pure gift up here again , where we are now at my original position since late february , but I used the opportunity to add to my position again.
Have a nice day
Great charts tonight, thanks for the updates.
ReplyDeleteToo many indexes and stocks hitting either 2 yr,or all time highs here at the same time to get the kind of decline you're looking for. The $TRAN index is almost back to it's all time high of 5500 hit back in 2007. A very bullish indicator.Not to mention the VIX and the dollar are staying way too low for a meaningful "sell" program to kick in for an extended period.Unless something dramatic happens...we'll be lucky to see 1300 again at this rate.Very lucky.
ReplyDeleteVery few are calling for a drop here, the employment report tomorrow should tell the story. If we don't sell off tomorrow there's not much else coming out to drop the markets except for a wild card event.
ReplyDeleteYour one of the few who has called this a bearish rising wedge. Everyone else has it as a rising channel. Before I found your blog, I had the same pattern drawn on my charts as you. Maybe after so many relief rallies, everyone only looks for bullish signs anymore. Two hours to go to employment numbers, we should know how this story is going to unfold soon.
ReplyDeleteSorry, but you are wrong again. You didn't check "oldschoolchartist" on youtube. His website is,
ReplyDeletehttp://www.freechartvideos.com/
It was an inverse head & shoulder from recent dip to $1325.
I follow your individual stock picks sometimes and you are still good at it, but your market prediction has been totally wrong since September last year. You'll likely to be keep being wrong on that if you don't listen to "oldschoolchartist" on youtube.
ReplyDelete