Nothing really has changed today, so I see no reason to make a new post. The market is just waiting on the Fed’s meeting at 2:30 pm est tomorrow. After that, we should see some volatility in the market. Which way is anyone’s guess at this point. I’d be afraid to go short with such light volume, and I’d be more afraid to go long because the market is in a topping process right now.
I certainly don’t know how much further we have to go up, but until it shows a clearer picture, staying out of it is much safer. As you can clearly see, the daily chart is still going up, and so is the weekly. Until at least the daily starts to roll over, I just can’t see any selling sticking.
Even if you miss the first wave down, getting short on the wave 2 retracement top is a better spot to be at anyway. So, be patience bears… and let the smoke clear after the Fed meeting. Sometimes the first move is a fake one. Not always of course, but a quick move down after the meeting could be bought back up by the dip buyers. It might be best to wait a little awhile before making a move.
Either way, a big move is coming soon… down or up is still unknown. I still feel that we will go down to that 107.35 FP sometime this week, but I also think we won’t start a serious sell off until early September.
Red
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Back to business as usual…
Yes, it seems that some things change and others stay the same. The market is the one that stays the same, while the overall economy changes from bad to worst. No matter how bad the unemployment is… it’s just ignored. There’s just no worry in the market place, as it’s totally disconnected from the real world. So, the rally will likely continue.
But don’t worry bears, your day will come… and soon. First however, I think we will head on down to the 107.35 spy FP sometime next week. Will it be after the Fed meeting on Tuesday? Who knows? If the market rallies up into the meeting, then I’d say yes… but if it falls into the meeting, then we would expect a rally out of it.
While I still don’t know if we are going up to DIA 118.16 into the Legatus pilgrimage in September, or down to the DOW 8300 print… the meeting will be a turning period. I have to say that I’m bearish next week, as I’m still looking for 107.35 spy to be hit, but after that… I’ll have too re-evaluate.
The weekly chart really should put a few positive histogram bars in, before it rolls over again. Of course it doesn’t have too, but my feelings are that it will… and that’s mainly because of the timing of the issue. The pilgrimage is just a month away now, and that’s just enough time to put in a few positive weeks.
Because the market has rolled over on the month chart now, I don’t think they will have the money available to take it back up if they go down to the 8300 dow print first. Once this market finally starts to head down that low, I don’t think we will see the April high again for quite some time.
I have many down side prints, and even without them… the stimulus money has run out. Even if they throw more money at the market, it’s not going to have the same effect as it did in March of 2009. The most we could expect is a wave 2 back up to put in a lower high… not a new bull market.
Plus, look at this from a political point of view. Hold the market up until September, as that’s only one month away from the November elections. Lot’s of campaigning will be all over the news, as both sides run ad’s 24/7… which means that a market that is selling off hard won’t get as much air time as it normally would.
The ol’ “look here at my right hand, while I’m robbing you with my left” distraction. The public won’t pay too much attention as the market sells off. The media will say it’s just an overdue correction. Spin, spin, spin… you know the game by now.
So that you all don’t fall for the bear trap next week, remember the election is right around the corner. I think most people have us pulling back to the 1090 area, and then rallying higher. But, I believe the 1070 area will be hit… mainly because they told us it will. DUH!
Besides that, the 1090 area is too obvious. It would only allow the bulls a better spot to go long. Not many bears would go short at that level, as it’s not a major break of the horizontal support line coming in there. But, if you break that support, then the bears will jump on and the bulls will sell out.
Of course once the 107.35 spy print is hit, I expect it to reverse back up and squeeze the bears out… which should also give it enough fuel to take out the 1130 area and probably the 1150 area too. Let’s also not forget that we are 2 weeks away from August option expiration.
If you go down next week, get a bunch of bears short, then you know they will rally into the follow opx week… making all the “puts” expire worthless. Same game, different month. As much as we’d like to believe that the market isn’t manipulated, anyone reading this blog long enough knows that I’ve given you plenty of proof that it “IS” 100% controlled.
While they still follow what the charts say, whenever they are at the end of an up or down move… they can always stretch it out a little bit longer then you might expect. That’s how they stay rich… by tricking you out of your hard earned dollars.
Every move is planned out months and years in advance folks. That’s what the Legatus Pilgrimage’s and Bilderberg meetings are about. It’s up to us to figure it out of course, but never forget to expect the unexpected… in this case, a hard rally back up, after a sell off to the 1070 area.
That would trick a lot of bulls and bears I do believe. I’m still 70-80% bears for next week, as I was for this past Friday too. But after the FP of 107.35 (or 107.12?) is hit, I’ll probably be leaning bullish at that time. Unless some other clues come up that change my outlook, I’m expecting the 1130 area to be taken out with a run higher to take out the next major resistance at 1150 spx.
How high, I don’t know? But it’s going to be more about the time factor then the actual price level. I expect the top to be put in right before or during the pilgrimage (which again is… September 9th-20th). Then I’ll start looking for the move down to DOW 8300 to happen.
Ok, for Monday I see us going up and possibly hitting the 1131 level ahead of the Fed meeting on Tuesday. But at some point during the week we should see a move down to the 1070 area. Probably after the meeting, but that’s just guessing. Either way, a move down like that would give the bears a nice dinner to eat. Just don’t drop the fish in your mouth when you look at your reflection in the water, thinking there is a bigger fish just below you.
Ok, I did some brain storming and I see 2 possible outcomes ahead. One has us going up to DIA 118.16 and topping out around September 9th-20th as that’s when the Legatus Meeting is happening for this fall. The last meeting was February 4th-6th, 2010… and that’s when we bottomed out. They injected stimulus package part two, and up the market went until the April high.
So, do we go up first… maybe? But that would setup the market for a huge crash down, from a much higher level. While it’s possible to go up into the Legatus Pilgrimage this fall, I tend to think we are going down into that time frame, and will hit the 8300 print during that event.
Once we hit it, we should go back up for a wave 4 for a little while, and then back down again into the December 7th time frame. This would put the SPX at 725 or so, and should complete wave 5 down of a larger wave 1 move. We should go up into next year, but at some point within the next few years, we are going to reach our final bottom of 20.16 SPY. (How’s that for scary?)
So, when will DIA 118.16 be hit, and will it? Once inflation comes into play, we could see Dow 38,000 like Mahendra predicts. Who knows that far down the line? But for now, let’s focus on tomorrow and the next few weeks first.
Tomorrow is a huge day in the market, and should it be bad jobs data then I could easily see the 107 area FP hit all in one day. I’m 70-80% bearish right now, but only based on my gut feelings (which are wrong a lot… LOL), not because the charts, which still look bullish. Plus the fall pilgrimage could be a high this time… not a low. And don’t forget that the DIA 118.16 will eventually play out. Will we do it now, while we are close to it? Or, is it for next year some time?
I’m leaning toward the downside first, with the 107 FP being tomorrow’s target. This is just speculation here folks… the charts are still bullish. If we go down, then I’d expect a bounce at that level. At that point I’d have too look at the charts again to see if we are going to continue down, or turn back up and go for 118.16 dia.
If we go up tomorrow, then we could be going to the 118.16 print into the September 9th-20th time frame. The charts can roll over at any time right now. They are still bullish, but at extreme levels right now. This is a very tricky place to be in, as that weekly chart tells me that we are going up to 118.16 FP first… which would set up a once in a lifetime shorting opportunity during the fall pilgrimage.
But other things tell me we are going to sell off first. I have no idea which one is right, but I cover both in the video… and focus on the bearish case the most. Just don’t rule out the bullish case here, as the charts are not supporting my bearish case right now.
So be prepared to go long up to dia 118.16 into September the 9th-20th… should the charts push up higher. I’m bearish by nature, and it clouds my judgment sometimes… so don’t take again as “written in stone”…
Sorry folks, but today end with a lot of mixed signals. The 60 minute chart is finally rolling over as the histogram bars are now at the zero mark and ready to cross down. But, the overall price level simply traded sideways to slightly down. That’s call a “Bull Flag” pattern, and could easily play out tomorrow morning.
However, when a pattern fails, it commonly makes a big move in the opposite direction… meaning down! We still have the FP prints of 107.12 spy and 107.35 from last week, but we don’t know when they are going to play out? If we start back down tomorrow, then we could easily hit that target by this Friday.
But, that daily chart is still rising right now, and the weekly is also pushing up higher too. While the daily is overbought, it’s still not showing any signs of turning back down yet. Some people have August 6th as a turn date, so we could chop around here until then.
I could easily see a move down into tomorrow morning, and then a rally back into the afternoon. With that 60 minute chart just now getting ready to go negative, I think it will only put in a small tower below zero and rise back up into tomorrow’s close. This would allow it to put in a smaller histogram tower above zero, forming a negative divergence on the chart.
That would set up Thursday as a possible big down day as the 60 rolls back down in the morning on the bad jobs data. By that time, the daily could also be rolling over a little too. But understand this, it is common to see a higher price level with a second lower high on the histogram tower of any chart. Meaning… while we could sell off early tomorrow morning, the afternoon rally could push us up toward that 1131 level (or more), as it squeezes all the shorts that just piled on.
Be cautious about going short right now, as no selling is likely to stick until the daily chart rolls over. That might not happen until this Friday… or even next week? With the weekly pushing up the daily, it’s hard to see any selling stick yet. We need the daily to start turning down first, and then I think the weekly will follow it.
So for tomorrow, if will sell off in the morning, look for the 60 minute chart to start to turn back up and then bail on your shorts. Usually all the action happens within the first 1-2 hours of the day, so that’s when I’d expect the selling pressure to lighten up a little.
A move down to fill the gap at 1105 spx would be my likely guess for a downside target. That would also hit the rising trendline that supporting this whole move up from the 1010 lower. If that line breaks, then the market should fall hard. But on the first hit of that trendline, I’d expect a bounce from it.
This all assumes the government doesn’t release some bogus news or data tomorrow morning to cause a gap up to fulfill the bull flag. From a technical point of view, it’s not really a good bull flag on the 60 or 15 minute charts. And on the daily chart, it needs another 2-3 days of sideways trading to be called a bull flag. So while it looks like a bull flag, I don’t think it actually meets all the proper qualifications.
Anyway, that’s about the best guessing I can do for you…
Red
P.S. Since the government has super computers telling them all the technicals in the market, releasing good job’s data (bogus numbers of course) would allow the technicals to play out to the upside. Basically, with the daily still pointing up, and the weekly too, whatever news they release will determine “When” they both roll back over. Good news means they will likely extend into overbought territory more. Bad news means they roll over at any point now.
While the jury is still in determining the market direction from here, I’m leaning bearish at this point. However, I do see Monday as an UP day, but after that I think the overall week will be down. For the upside, I don’t have anymore short term prints except the 111.28 spy print that I posted Friday.
Since that was an intraday print, it should be hit within 1-2 days… meaning Monday, (since it failed to hit there on Friday). That would also be right at the falling channel’s upper trendline (shown on the 60 minute chart). I don’t have any other upside prints except the longer term print of DIA 118.16 (about 11,800 Dow), which is a long ways away right now.
But on the downside, I have a short term print of 107.12 spy from a week ago, and Anna caught it again on the intraday chart on Thursday, further confirming the accuracy of the print. The level she seen was 107.35 spy, so I’m pretty sure we will see that level next week some time.
On a longer term, I have the Dow 8300 print from several weeks back. So when will that play out? If that weekly chart rolls over next week (which could happen if we close down around the 107 level next week), then we could hit that low within a few weeks.
I don’t for sure yet, as until the weekly chart rolls over (the daily too of course, and I expect that to happen early next week on it), it’s still possible for the market to go up more. But, I’m 70-80% bearish for next week, and I do expect that 107 FP area to be hit before next Friday.
At that point, I’d need to look at the charts again to see what the weekly chart does. Again, if it rolls over, the market is toast! That 8300 Dow will be upon us before the end of August. And, there’s enough important data coming out next week that could easily cause the sell off to happen.
On Tuesday we have Personal Income and Personal Spending, which will move the market one way or the other. On Thursday we have Continuing Claims and Initial Claims out, and finally Friday has the Unemployment Rate, Hourly Earnings, and Consumer Credit… all are “market movers”!
There are plenty of reasons to blame the sell off on next week, as I really can’t see all of those reports being positive and causing another move up in the market. This leads me more and more bearish, as I just don’t think the weekly chart has enough juice left for a breakout move to the upside. Especially now that the daily has ran out of steam too.
So from a technical point of view, the weekly and daily charts are running on empty for power now. I’d say they’ve used up 90% of their juice, and could roll over at any time now. The monthly is still bearish, and only took a “pause” period last month, which still didn’t do any damage to the overall trend down.
And of course from a “news point of view”, next week could scare a lot of bulls from staying long. We all know that the market is manipulated and 100% controlled (you should know that, if you are a regular reader), which means they could make all the reports look positive, by getting out their erasers and changing the data.
But, they also follow technical patterns too… especially on the larger time frame charts, as they are just too hard to manipulate. The intraday moves don’t take as much money to control, as turning around the Titanic would (meaning the monthly charts’ down trend)!
Ok, so Monday I’m looking to go up to that 111.28 print by the close. Then I’m looking for the 60 minute chart too have peaked out, and the daily to get even closed to have a bearish cross on the MACD lines. Since Tuesday starts out the week with the first of many reports that can move the market, I’d expect that to be the start of move down toward our 107 area FP.
The market moves fast on the way down, so who knows how fast it could hit that target low? Bad news on Tuesday could cause us to hit that level before the Thursday news, because traders will be selling in fear that the job’s data will be horrible. The old “buy the rumor, sell the fact”, or in this case… “sell the rumor, MAYBE? buy the fact”.
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