It’s still a bear, even if it looked like a bull today…

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bear-looking-like-a-bull

As expected, the market rallied up to 1040 and stalled. However, I was looking for one more quick down move to the 1014-1016 area before it rallied. None the less I was sitting in cash waiting for the larger down move around the 7th. This will be hard to call exactly (what isn't by the way?), but I'm expecting a flat to slight up day tomorrow as the bulls most likely used up all their energy in this one thrust move up.

Volume was light again today with only 150 million shares traded on the SPY. Couple that with NO important economic news and you can see how easy it was to push the market higher. Tomorrow doesn't have any major news either, so I'm expecting them to try and hit the 1050 area. On the 60 minute spy chart the 50ma is at 1047, and on the daily spy chart the 20ma is at 1051. So, I'm looking to start loading up on shorts around that area.

As I said on my weekend post I believe the top is in on P2 and now any 2 day rally up should be shorted. Tomorrow should close flat to slightly up. That's 2 days folks! That means tomorrow is the day to take a short position. I thought Monday would be flat to down, and Tuesday and Wednesday would be the 2 up days. But, this isn't an exact science. It's off a day, so get ready to go short!

I don't expect the 1020 area to hold on the way down, so don't look to buy it. It might stall there intra-day, or even one day, but it should break and head down to the next major support at 998-1000. That would be a good place to expect a bounce as that will be the first hit of that level on the way down. However, with that said, I wouldn't go long off it unless you are a day trader. Swing traders should just go to cash, and look to get short again later.

Remember, I'm looking for a big down move all the way until option expiration on the 16th. So, it could play out just as simple as Wednesday to Friday down to 998-1000, up/flat on Monday, and more down until Friday the 16th. Bottom line... either stay short until the 16th, or go to cash at the first hit of 998-1000 area, wait for small bounce, and re-short for a further collapse.

How far? Next support level is 980, then 955. But, let's just take it one day at a time.

Red

168 COMMENTS

  1. Great blog…been following off of Cobras since you posted your web address a few weeks ago…..Great work and will contniue to read daily with Cobras.

    • Thanks nbg….

      I've been a follower of Cobra for quite some time now. His TA work is excellent. I only wish I was that good with TA stuff. I try to mix a little bit of everything in my posts. After all… we are human, and humans aren't really that logical too be predicted with technical annalists only.

  2. Good Morning Red. Very good post! Love that cartoon too. Where do you find these all great pics? 🙂 I like your plan sounds very logical. I just came from reading Bill Cara's Commentary & Community Chat write up. Looks like the both of you can see through this latest rally.

    “You know, the Interventionists can only push on a string so much before it snaps. I’m biding my time watching for the break.”

    http://tinyurl.com/yc7szht

    See you on ES my friend.

    • Thanks Douala…

      I just search the internet sometimes for something that I want and come across other pictures that I like and think might use someday. That was one of those pictures.

  3. does look like a short from 1050 this MORNING after open.
    BUT the down move might not last all day??
    Some indication the day ends on the bull side
    Jay

  4. then again, a LOW today back at 1020 would tear the bulls apart, but would setup the NEXT leg UP still due to TOP OUT on the 13th at 1063. -maybe higher?
    Question is HOW do we get there
    UP-DOWN – UP of course
    WE got one UP so far, looking for A DOWN Today
    Jay

      • Ok, 1060 at 11:25 Am, and getting close to an astro possible high at 11;38.
        1060 is right near the top of the range I posted of 1063 using fibo
        Expect some sputter from here, and another attempt on the 8th
        July 8th low to oct8th = 90 days lo to high
        Friday should be the BEST day for bears
        hope bears can hold out till then[gg]
        Jay

    • I'll make a post later tonight and let you know, but I did go short at 1060 as that is now major resistance. The fact that we didn't close above 1060 should mean that we'll start to pull back tomorrow.

  5. I'll make a post later tonight and let you know, but I did go short at 1060 as that is now major resistance. The fact that we didn't close above 1060 should mean that we'll start to pull back tomorrow.

Comments are closed.