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Sp500 in Full TILT Crash Mode

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The sp500 today was not able to bounce as I thought it would.  Instead the market chose to take the full crash mode option.  There is not other way to describe this type of move.  This is an all out crash and it has similarities to the 1987 style crash. We are about 10% down … Read more

SPY Bottomed Today

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Today the SPY ETF Bottomed with a bullish spring formation in relation to the 3/16/2011 price swing low.  It was a bullish spring and rejection of that 3/16 low and volume shrunk by about 21%. 

So it is clear to me that we have bottomed in the short term and are now set to work higher in some type of counter trend rally higher.  This may end up being a low volume rally higher relative to the recent heavy volume decline and would set up a possible ideal re shorting opportunity in mid to late August 2011.

It is quite clear to me that the next big decisive move in the market will occur in the late August to early September 2011 time frame.

Counter trend rallies can sometimes extend a lot higher than at first thought.  I am thinking the SPY could get to the 130 to 131 range with an outside possibility of 132.5 as the most optimistic scenario.  The weakest bounce scenario would be about 128.5.

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75 Percent Down from here

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I recently stumbled upon a blog posting by Peter Brandt, a technical trader who did a very long term blog posting on the major indices.  I have to say that after reviewing it, it became clear to me about how potentially large the bearish possibilities are for the market. I have known about the possibility … Read more

Sell the Rumor and Buy the News

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You have probably heard the expression ‘Buy the rumor and sell the news’  ?  Well that strategy works very well when you are looking to go long a particular stock on some forward looking news.

The opposite of buy the rumor sell is the news, is ‘Sell the rumor and buy the news’.  This is exactly what I think is going on right now.  Traders have already begun selling the upcoming news next week (shorting it) and when the news arrives (whether it is debt news, or Fed QE3 news, or maybe something else) they will very likely buy to cover and close shorts right on neckline support.

Meanwhile major news networks are providing us with great informative updates about how the market will crash and it will be Armageddon next week.  I think even MSNBC showed a price chart of the DJIA a day ago showing how it declined.  All of them are talking about the stock market and how it will fall apart.  To give them some credit, they have been right about the decline leading up to the news.

So I currently recommend closing all shorts near the 1265 to 1270 sp500 range or the DJIA 12000 range.  I believe this support will hold and the market will bounce from there.  Of course that is not guaranteed.  Will have to see how the market reactions on neckline support and then take cues from there.  But I suspect we will see a mini capitulation near these levels.  We may dip under these levels briefly but I suspect it would only be for a very short time frame.

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A BOT Sell Signal Under sp500 1331

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I will automatically switch to an ‘industrial strength’ BOT Short Signal if the sp500 by the 4pm close today manages to close under 1331.  The preliminary sell signal would be history and the full one would be activated. A close under 1331 would activate an MACD histogram sell signal on the daily time frame and … Read more