Tuesday, May 21, 2024

Missed By 12 Cents…

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In several of my weekend updates I have spoken about the market wanting to go to the 112.30-112.50 spy area.  This area was almost reached today with an intraday high at 112.18 (spy).  Will that be enough to satisfy the market?  I believe it's close enough, and that the high for the year is now in.

Unless the jobs number Friday is really great, I don't see anymore rallying by up to try again.  The market sold off hard the last hour of the day, as many are expecting bad numbers tomorrow.  Comments made warn of weak numbers, and that should stop any rally back up to 112.18, or higher.

Of course it could rally some in the morning, but I expect any rally to be sold back down hard.  We could simply gap down on bad numbers, rally back a little, and then sell off into the close.  Regardless of whether it rallies up in the morning or gaps down, the end result should be the same... a lower close!

I believe this to be the start of the move down that will take us to 104 spy by option expiration.  I posted on my weekend update that I see a move down to the 107 area for gap fill first, then a rally back up to under the lower support level around 1085 (SPX), and finally a push down to the 104 level (1035 spx) by OPX.

I know many people don't think that could happen, but I believe it fool a lot of traders.  Several things are supporting this forecast, with one being the continued sell off in the banking stocks.  Goldman, JPM, Chase, Citi, and others have been going down for over a week now.

Next you have the dollar and the fact that it appears to have found some type of temporary bottom here.  It seemed to "not want to go lower" today, even though I'm sure the boys in Washington were trying to do so.  Let's not forget about the SPX making a Triple Top too.

Gold also seem ready to pullback now.  Everything is now pointing to another 5% correction in the market over the next 2 weeks.  If the dollar gets a decent bid the people who are short, and there's a whole lot of them, are going to get caught in a huge short squeeze.  Gold will fall, and so will the market.

Too many people are thinking that we are going higher, without any pullback.  I don't believe it.  Remember, the market makers like to take everyone's money... not just the bears!  Bulls had better sell now, before the stampede start...

Red

Red
Author: Red

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Captain_Koons
Captain_Koons
14 years ago

Hi Red Dragon.

Great blog. I read it everyday. I agree with your analysis. Let's hope it pans outs.

Red Dragon Leo
14 years ago
Reply to  Captain_Koons

Thanks Captain, I'll try to do my best in keeping the warp engine online. LOL

Red

moon
moon
14 years ago

Thanks Red concur – wishing us luck

Red Dragon Leo
14 years ago
Reply to  moon

You should watch the video from “The Chart Pattern Trader” that he put up last night. He's calling for a big down too. (The link is in my blogroll)

steveo77
14 years ago
Reply to  Red Dragon Leo

Thanks for the heads up (or down that is!)

gp
gp
14 years ago

great blog but hey whats with the Red Dragon – Are you Welsh or something?

Red Dragon Leo
14 years ago
Reply to  gp

I'm a Dragon in the Chinese zodiac and I was born in August making me a Leo in Astrology.

steveo77
14 years ago

RDL, you have a “real comment system”, as opposed to the generic blogger comment system I have at:

http://oahutrading.blogspot.com/

What does it take to make this real comment system?

Red Dragon Leo
14 years ago
Reply to  steveo77

Steve,

I just installed the “disqus” plugin in my admin section of wordpress. I notice that you use the blogger platform. I'm really new to wordpress, althrough I designed and built some simple html websites in the past.

I decided to go with wordpress as opposed to blogger because there seems to be a lot more “open source” plugin's available. Although there still should be some way to install the “disqus” plugin in blogger too… I guess?

I'm not familar with blogger, (as I'm just learning wordpress), but I would google it and see if it's available.

Red

steveo77
14 years ago

RDL, you have a “real comment system”, as opposed to the generic blogger comment system I have at:

http://oahutrading.blogspot.com/

What does it take to make this real comment system?

Red Dragon Leo
14 years ago

Steve,

I just installed the “disqus” plugin in my admin section of wordpress. I notice that you use the blogger platform. I'm really new to wordpress, althrough I designed and built some simple html websites in the past.

I decided to go with wordpress as opposed to blogger because there seems to be a lot more “open source” plugin's available. Although there still should be some way to install the “disqus” plugin in blogger too… I guess?

I'm not familar with blogger, (as I'm just learning wordpress), but I would google it and see if it's available.

Red

Red Dragon Leo
14 years ago

I'm a Dragon in the Chinese zodiac and I was born in August making me a Leo in Astrology.

steveo77
14 years ago

Thanks for the heads up (or down that is!)

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