T/A ETF AND INDEX

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Markets traded down 8% HL since April 2, 2012 from SPX 1422 to SPX 1304 after breaking out from 3 months trading range with an H&S formation. The current VST target is 1300 which we have seen today. The first target is based on the obvious round number S/R 1300 and a measured target from a slant H&S from lower left shoulder at 1325 to slightly upper right shoulder at 1365 from the head at 1422. Therefore a VST target of the slant H&S target is met at today’s closing price of 1304. However, the second target of H&S formation of Adam and Eve H&S with a right shoulder at 1340 is SPX 1280 with a 10 point range of 1270 -1280 +/-.

The market action during the OE week breaking out of the three month trading range on the OE Monday and follow through is nothing technically and fundamentally surprising as well as it is as bearish as markets are on orderly selling and profit taking phase. In fact, market actions are in line with technical analysis. With the News from Greek and JPM Dimon, markets are trading quite normal and orderly.

While very ST micro perspective comments by CNBC and Bloomberg headlines such as “SP500 Tumbles to Four Month Low Amid Economic Report” seems to be concerned to a few, most of market participants and watchers would not be surprised by the headlines as many are informed about the realities of financial markets and massive debt fiasco around the globe. Even though aforementioned market conditions are expected, I do not think that most of people do not realize one aspect of the recent development concerning JPM Dimon news headlines. Obviously I am not talking about the headlines on news media, but it could have a significant implication to market actions for 2012. I am not going to spell out what I am thinking because it could spoil my speculation used as a contrarian indicator. But sure it is an interesting catalyst at this time of the election year 2012.

VIX traded to VST target 24.50 as shown on the VIX weekly chart. Is it possible that VIX could jump to new high in 2012 as shown on the VIX monthly VLT chart analysis? It is possible that we could see VIX jump sooner than many are expecting in 2013. Is it possible whether markets will trade down going into the Nov 2012 election? It is possible as I see an example in a global market but I will not note which one it is. Markets closed at VST pivots as noted above, and market actions during the next week will be interesting if markets bounce and if so how much it will bounce at the 200dma as markets have signaled today closing below 200 dma. As for Facebook IPO, I see it as “Suckerville” not like Google which is a major service product; therefore, I don’t expect any major significance to market actions in intermediate or long term consideration.