I'm playing the May because I'm not sure what's going to happen here. Looking at the SPX chart above, and then looking at what the price is doing today, it appears that that large inverse H&S is going to be the setup. So, a run here to 943 +/- 30 points? can be a good retest of the neckline.
Then, we get a fall back into the 750 range +/- 30 points or so and then that's a buy.
Like I said though, I just am not 100% sure in that because we are entering a very weak market season and I assume the shorts are pretty much all blown out. The market is now OVER valued on 2009 and 2010 eps leaving just hope to trade on.
BTW - I'm long the TZA and SHORT those calls.
But just a small position.
If you look at a 5 year or longer $NYSI or $NASI chart, you'll see that EVERY May through June, the market falls. EVERYTIME!
The question this time will be how low. The typical cycle is for the market to run from Nov to Feb/Mar, then fall into June, then bounce, then fall again from Sep to Oct and then repeat. This year it's ass backwards.
And don't forget the Jan effect. Many are foretting that.
And all these bulls better not forget the 1932 scenario - where the market fell 90% off the big rally off the initial drip from 1929. So, this H&S breakout could take the SPX to 1200 next year. But then?
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