Okay, here’s the last one of these short-term casino patron updates. I’ve got more important things to keep track of like that short against DSLV, which is testing its limits this morning. SPX 60 minute view…
- Initial objective (targeted back when the average bull was supposedly worrying about Ukraine and Russia) of 1950-1960 (resistance, now tentative support) is in the books.
- Gap is filled.
- Pattern measurement still resides above.
- Typical of these rallies off of bull market corrections, they tend to test to the will of bears so that even those with the most conviction that this is finally the big one, will have a good amount of doubt, Soros Put position or not.
- I have no such conviction, and instead resolve to go with what the market says.
Well what do you know? Guess who’s trying to break the resistance zone, get to the gap and possibly even the pattern measurement? Why, none other than the SPX, fueled by easing Russia-Ukraine tensions according to this headline (try not to get startled when the picture jumps out at you).  They wisely dropped said picture down to the middle of the article.
For all you casino patrons keeping score of the short-term squiggles at home (okay, I admit it, when it comes to the US stock market I am a casino patron too ).
This thing is significantly higher than where I covered my SPY short so… so far so good. It would appear that the pattern neckline – which SPX resides above after dropping through – would be a key. Resistance is a viable candidate to stop the bounce, but as long as SPX is above the neckline so too I guess, are the gap and pattern measurement.
 Errr, care to try again genius?
We noted that an SPX bounce target by the daily chart we used a couple days ago was 1950-1960. Then some resumed bearish price activity called that bounce projection into question. Today we are back at it asking ‘what if?’ with respect to the SPX’ bounce potential. What if it can get to the high end of the 1950-1960 range per the 60 minute chart’s interpretation?
The 60 minute view has got positive divergence to price and a would-be measured target to a thick visual resistance area.
Just a week ago they were so scared, so disoriented. So the bear at biiwii got bullish while they fretted. Now the newly brave dumb money does what it does best as it chases the momentum in a rush of greed. It is funny watching these things play out. It’s 3600 or bust for NDX! You go bulls.
Last week we projected 2 out of 2 charts agree; Nasdaq 100 target is 3600 +/- so why should we be surprised that the bounce is continuing? It is only doing what it was supposed to do. Could SPX (lower panel) be up for a test of the highs?
I’ll not say more because I don’t know the future. But I will say that the S&P 500 has now completed the minimum expected bounce with a touch of distinct resistance.
HUI has clearly broken down from the bear flag. As noted previously, these breakdowns usually see a decline below the start point, which was around 216.
The US stock market is negative pre-open, but don’t be surprised if we get a strong bounce soon. It could be a trade-able bounce. I have bought a couple items in anticipation and am watching several more.
A bounce is a bounce; a trade. It is what happens on a would-be bounce that will be important going forward. What will the market do at resistance? That will tell us a lot about what this thus far mini correction will be, another quickie or something more lasting.
SPX has firm support at around 1800.
One of the leaders, NDX needs to bottom shortly and make a ‘higher low’ to February or it is going to activate a bearish intermediate signal.
 …and here comes the EoD kick save attempt trying to put a tail on the candle. I am hanging loose for the moment, having taken enough lumps this week and just loving me some cash. But even if SPX gets above support, that tail on the candle could be a sign of coming weakness.
Well, say goodbye to daily support for the S&P 500; at least in-day. This is obviously not good because it is coming after a failed stock market bounce on some Fed minutes b/s. Cash and the search for bounce points to take longer term short positions (but really, cash and equiv’s is a position!) looks like the near term future.
RSI looks like it is going to 30 after failing to hold the upper 40′s. The initial target would be a higher low to the January correction, assuming today remains like this. But even if it doesn’t, the in-day breach might be meaningful.
Here’s the 60 minute view on the chart we showed yesterday…
I bought puts on the bounce in SPY that will pay off if the market takes any kind of significant correction this year. They are dated out to December. The mental ‘stop’ would be if it looks like the recent bear hysterics were just a fuel stop for an upside blow off to come.
It’s risky because the S&P 500, unlike the the Nasdaq, never lost daily chart support. But if SPY goes flat or keeps rolling here I’m going to hold these puts for what I’d expect to be good gains.  Taking the profit at support and wait for breakdown. Profit came too quickly.