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Saturday, July 09, 2011 9:05:26 AM
SPX
Moving averages gave a tradable short below the 25MA yesterday, but to hold short is very risky, given the 80 MA is down at 1312. The market didn't have enough force to continue down because not enough moving averages were broken. Basically, for any bear move we need to have consolidation of moving averages at these levels for 3 to 5 days to have a MA cluster. Only then will a moved down be strong enough to hold. All three indexes need to be in sync in order for this to happen. The reason being the way that the 3 indexes are tied together.
We closed on a hold long signal, so look at yesterday as a means to shake out the weak handed bulls. For bears that jumped in too early, it gave them a chance to sell their positions and to accumulate a stronger position at higher levels.
On the weekly charts, the RSI levels show major divergences, so that would indicate that all bull moves should be shorted. The trin ended with a buy signal, so I would expect that futures will be up on Monday morning. I would also expect that we fill the gap left open and rejoin the island people.
Semis are developing a moving average cluster on the daily charts, so that would indicate a big move is coming soon. The daily chart with the 3 line move on the SPX is consolidating nicely, so bears should watch for that confirmation. The other option, would be that the market make a major move up and the moving average cluster, which given the mess Washington has, is very doubtful. Double dip recession looks likely at this point.
So parabolic moves in the market (usually mark a top), seasonal stuff and earning with the top probably in the market in approx. 10 days to 2 weeks. Generally the pattern is for a long move down until the end of September.
Just my reading of the tea leaves and you should always trade your convictions and charts and not people's opinions on this board.
Moving averages gave a tradable short below the 25MA yesterday, but to hold short is very risky, given the 80 MA is down at 1312. The market didn't have enough force to continue down because not enough moving averages were broken. Basically, for any bear move we need to have consolidation of moving averages at these levels for 3 to 5 days to have a MA cluster. Only then will a moved down be strong enough to hold. All three indexes need to be in sync in order for this to happen. The reason being the way that the 3 indexes are tied together.
We closed on a hold long signal, so look at yesterday as a means to shake out the weak handed bulls. For bears that jumped in too early, it gave them a chance to sell their positions and to accumulate a stronger position at higher levels.
On the weekly charts, the RSI levels show major divergences, so that would indicate that all bull moves should be shorted. The trin ended with a buy signal, so I would expect that futures will be up on Monday morning. I would also expect that we fill the gap left open and rejoin the island people.
Semis are developing a moving average cluster on the daily charts, so that would indicate a big move is coming soon. The daily chart with the 3 line move on the SPX is consolidating nicely, so bears should watch for that confirmation. The other option, would be that the market make a major move up and the moving average cluster, which given the mess Washington has, is very doubtful. Double dip recession looks likely at this point.
So parabolic moves in the market (usually mark a top), seasonal stuff and earning with the top probably in the market in approx. 10 days to 2 weeks. Generally the pattern is for a long move down until the end of September.
Just my reading of the tea leaves and you should always trade your convictions and charts and not people's opinions on this board.
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