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Wednesday, March 30, 2011

$SPX - Freefall Alert!

I anticipate that SPX has topped at 1332, point B, on this spike higher from the March 16th, 2010 low.   

Next, I will calculate the decline to point C:

I have a very specific cycle that strongly correlates with the current pattern of trading and high today.  The calculations based on that cycle indicates that C = 1.382A.

A = 1344.07 Feb, 2010 high - 1249.05 March, 2010 low = 95.02 SPX points
C = 95.02 points x 1.382 = 131.32 points

Therefore the bottom at point C is calculated to be:

1332 - 131.32 points = 1200.68 SPX             

Furthermore, the length of time from the current 1332 top to the bottom calculated target at 1200.68 SPX should be equal in time to the March 16th 1249 bottom to current top 1332 (equal time cycle).  This is approximately 11 trading days in total, and therefore my estimate of the bottoming date is:

Friday, April 15th, 2011 bottom at 1200.68 SPX

These are approximations, and I expect accuracy to within a few points, and within a few days.  Also, notice (on the chart) the moderate decline to start with initially (in each yellow box), and then the acceleration down with a freefall.  The moderate decline should take about a week with the freefall to start in roughly 1 week's time.

I will be expanding on details of multiple cycles in agreement in further posts.   

In addition, this ABC move is corrective, with an aggressive rally up to the final 1352 SPX target to follow.

2-Hour Chart

55 comments:

  1. ejoys, you were correct! Thank you!

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  2. Thanks for the update SC. If your right, it's going to be a great April for me

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  3. Hmmmmmmm...........we shall see.

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  4. Over on Traders-Talk, all the boys are talking about 'Zweig's Breadth Thrust' today, using the S&P. Zweig used the NYSE, so.... Very bullish, if true.

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  5. My view is either a small pull back here to 1320ish and then another rip higher or we just rip higher into Mon-Tuesday then come off for a few days.

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  6. Looks good also the target , I was thinking below 1200 to the MA(200) daily - but time will tell.

    If the freefall as you say will begin in 1 week , thats near the EU rate hike date 7th April I think,, time will tell... everyone expecting rate hike in EU as of now

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  7. Correlates with the DAX as currently traded on DEC top 7085. Target 6850.

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  8. SC,
    I'm starting my cyclical journal.
    My view, soon to be datailed, here on test site:

    http://www.bnservices.it/cycles/

    I tried to keep it simple and not to expose calculation, maybe i'll do next. As you said, time is the limiting factor. Nice work here, as usual!

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  9. One more test of 1332 would look ideal to me...

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  10. SC triple bearish divergence on SPX 30 min chart , triple bullish divergence in TZA

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  11. Thanks Sqwii. It is relatively rare that we could see such a large drop in such a short period of time. Exciting short opportunity!

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  12. added last shorts here SPX 1329-1330 imho last chance to get them cheap

    I have a big rising bearish wedge on dow jones and SPX which is about to breakdown..............

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  13. The VIX and the $Dollar are both going to have to make some big spikes UP here soon,as well as some of the current leader stocks like AAPL taking some big haircuts...to get the SPX and the DJIA to get anything serious going on the downside here.We'll have to start with seeing if we can get a close below 1320 for starters.@ 1327 now.

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  14. How sick is this?!?!? One last run to 1333?
    Why this last 5 point uptick?

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  15. Slow pace today, and I don't see any action until 1332 is retested. Still early, we are going to burn some time here.

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  16. Pullback my be in at 1325 and now we move higher. If not then maybe drift into close.

    Still not even close to a sell signal.

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  17. this actually looks like it is starting. Action in the dollar this afternoon looked good

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  18. Drift into close worked out.

    Tomorrow will give more clues.

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  19. The Employment Report will be the deciding factor here, if we don't start selling tomorrow baring some unforseen event there really isn't anything to start a sell off. Heck, if radioactive rain water and contaminated sea water isn't a issue, what is?

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  20. @SC -- Thanks very much for changing the Posting and Comments to black text on white background. So much easier to read.

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  21. SC,

    Thanks so much for the update. No, can't say I was correct. I didn't expect B to retrace more than .782 of A, which makes me a bit cautious. With my gut as shrunken as Mr. Costanza's after pool, I'll proly get off at C = A.

    One other thing is, Atilla is usually few days early but he is not short yet. But I love your view and hope you enjoy the ride till the last drop!

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  22. Didn't Atilla say he wouldn't tell when he went short again, due to too many people piling on his trades?

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  23. EJOYS-Re Atilla-how can you say he's not short yet?? How can you know if he is or not-he said he wasn't going to post his new position-correct me if I'm wrong. My guess -and only a guess-is that he is short-right here-right now-re Sol's "history rhymes ect"

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  24. Does it matter what Atilla is doing or not doing? If you have followed his advice last two years, you have no money left. One who trade stocks cannot rely on a blogger to do business, he or she must stand on its own. It is not Sol or Atilla who decides the fate of the stock exchange, it is larger than that! I like this site and I like high-tech technical analyses, such the ones that SC makes, so please stop talking about what others do or not do. Tell me rather what you do yourself! That is interesting!

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  25. H/JS

    It is just my wild guess that Atilla would at least let us know via twitter.

    F

    I've had high winning rate when my directional bias was aligned with Atilla's. For that reason I tend to check his stance. Went short at 1316 w/ 1333 stop. Will be flat at 1240ish.

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  26. ejoys, What's your time frame to get to the 1240's? I went short right around the same place as you with almost the same stop. My delema is I went short via April puts so time is a factor for me

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  27. Looks like were going to retest 1333. If we break through were done

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  28. Finnbo-you'd have no money left if you followed Atilla's calls?? Go back and look at his calls from last year before posting something like that please.

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  29. Well, here we are testing 1332, and that makes this the perfect setup for bears. Hard reversal later today?

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  30. Thanks SC! But what could change the sentiment! There must be a trigger and I cant see one right now.This is interesting http://www.zerohedge.com/article/labor-force-participation-rate-remains-25-year-low-642

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  31. We rejected the 1334 area for now. Copper down big today and dollar up. Have to see what happens.

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  32. The top pink line on my chart above is at 1334. We hit it and pushed just over, then reversed.

    One more backtest of that line would be best.

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  33. SC-this proves that you can't short without confirmation no matter how good your charts are,and yours are very good.The price you pay by waiting for confirmation is your insurance policy.

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  34. Your right, the sure way to go broke is trying to pick tops and bottoms. Who knows when a correction may happen but it doesn't look like it will now

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  35. As I thought........moving higher. Next level is 1340ish.

    Still nothing close to a sell signal.

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  36. Well,today will all but sign the death certificate to the "big correction" scenario coming anytime soon. The trannies are less than 100 pt from an alltime high. Now thats bullish. The VIX has been slammed below 17 now...down over a pt today. The COMP is just about to go over 2800.Sometimes it just 'is what it is'.I'd say even if we get a one or 2 day pullback next week...we'd be lucky to see 1320 again.And that would be a stretch.

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  37. Not so fast, it doesn't "feel" like it, but keep in mind we only went 5 points above 2 days ago. Bears capitulating!

    What I find is that capturing 80% of a move is doable, capturing that last 20% is much more difficult. If we can make money 80% of the time, then excellent.

    I've been working on the vix chart, and actually I think it needed this last push down (I'll update the chart and show why on the weekend). Now very bullish and should start triangulating. First, it should head to about 20.

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  38. Maybe a double top in DJI 12400.

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  39. SC , your downside target of 1200 will now be changed right ?

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  40. US is broke, EU is broke. The only one with a big sack of new printed money is the FED. And it is not their money, it belongs to the children of the future. I feel sick of this teatre!

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  41. Yes, Sqwii 1206 now would be the target. Time target remains the same.

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  42. SC: blog is online. Just updated my vision of S&P.

    http://www.ellipsetrading.com

    You've been my first choice for link list :)

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  43. I think we get a reaction at 1340ish but don't see the hard move down you are looking for.

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  44. Excellent GGuy. Thanks and looking forward to your commentary!

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  45. Looks like 1340ish.......1310ish...........then higher to me but we will see.

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  46. I have an odd feeling even the smart money thinks it is time to take some money off the table. Inflation and rate hikes around the corner and a potential goverment shut down next week. Last two hours have been weak.

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  47. H,

    stopped out. no position. not sure about timeframe. gonna ask SC AFTER the mkts start to move down.

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  48. Here is you "freefall"... micro style!

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  49. Maybe we close in red. 2,5 more points on the ES and we are under the 1326 line, 1321 next! Does anyone have any volyme figures?

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  50. Here is my 1332 SPX, probably act as support for today and bounce into the close. However, Monday looking good for bears. 1307 I'll say.

    I rarely grumble about the Fed, as I feel the cycles always overwhelm, and therefore Fed effect is minimal. I swear this should have stopped 1332-4. So Fed managed to get another 4 - what a nuisance. I see why Sol keeps things quiet.

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  51. interesting sell off starting here...especially for a friday afternoon

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  52. thanks for the work SC, have a good weekend

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  53. Thanks Blake. Have yourself a great weekend as well.

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