I shorted more VXX today via puts in the belief that we are about to see a bullish rally in the market perhaps into the end of August. Makes sense to see some end of quarter window dressing to try to salvage some mutual fund performance scorecards. I have to say I am quite surprised to see the VXX still so high up in the air given that we seem to be on a verge of a ‘scorched earth’ type rally.
We should see 1250 on the sp500 and 2600 on the Nasdaq. It is possible we could see higher than that per Edwards and Magee analysis that says the retracement rally of broadening wedges can go from 1/2 to 2/3rds of the previous decline.
There should be a much clearer picture by the end of August and I will be issuing a new ‘BOT re short’ signal around that time frame.
For those that missed the first chance to short this market, the market tends to sometimes give second chances and I believe that second chance is coming up in 2 to 3 weeks.
It would set up a catapult for a much larger decline into the typically bearish September October 2011 time frame.
The tendency after such a previous bearish trend is to be quick on the trigger finger and short much too early. One has to let the upside action play out as much as possible, let prices get comfortable with the idea that they are in a new uptrend.. but then when the indicators are ‘overbought enough’, pounce on the short side again…
presume you are now BOT Long as of the open tomorrow (Friday, Aug 12)?
if it is “Rally Time” as your headline so joyously proclaims, are u now BOT Long?
No. As I indicated in a previous post I am not going to switch to any new BOT long signals, just new ‘Re-Short Signals’.
However I also said I would still indicate when I thought we were ready for a momentum shift upwards, which appears to be happening now, perhaps until end of August approx.
I expect the bounce to continue through Tuesday on a mild wave of euphoria about a resolution of the euro crisis. I will close my long positions sometime Tuesday in anticipation that the Merkel-Sarcozy meeting (“Tuesday, August 16, 2011 at 16:00 at the Elysée Palace (Hotel de Marigny)”, and “this interview will be followed by a conference joint press (18.30) and a working dinner, “) will be a bust.
EW is looking for the market to turn down again around $SPX 1200. That is rough, it is even possible that the bulls will have a run up toward 1190s on Monday and Tuesday. Riding the hope that the euro crisis is over, NOT.
I have posted here before regarding trend changes on Bradley turn dates with corresponding full and new moons.
6/15 was the beginning of an uptrend with a full moon
7/29 the beginning of the fall from the double top. The following day was a Saturday with a new moon
The next Bradley date will be 8/30 preceded by a new moon on 8/29. I am looking for the down trend to resume at this time having hit 1280ish (bottom of the monthly trend line on the SPX) as a possible target
THOSE SKEPTICS ON THIS BOARD NEED TO TAKE ANOTHER LOOK