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Wednesday, July 27, 2011

$SPX - Short Term Update

The July 22nd time cycle was a major cycle, and that resulted in a high, and then reversal with a sharp selloff. 

The market may pause soon, but bounces may only be moderate, and another sharp decline appears likely.  As far as timing, a bottom target near 1263 may be approached in as little as a few days time. 

August 10th +/- 1 is also important, and a significant selloff into that date is anticipated.  It is possible that is the bottoming date if things develop a little slower.      

30min Chart

41 comments:

  1. SC, how do you expect metals to react to such sell off? Gold spike higher dragging silver along with it higher as well? This pretty much means no successful resolution of the debt ceiling debate till aug 10th. Doesn't this contradict silver symmetry chart?

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  2. Silver and Gold both did poorly yesterday with the market selloff. One possibility is that they just put in lower highs.

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  3. The action today will be important in determining the short term timing. As far as I am concerned the the debt ceiling may be resolved in the next few days, and the mkt could selloff anyways.

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  4. Hi SC what level would you be looking at shorting S&P for the drop to 1263? What sort of bounce are we looking at?

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  5. SC, that would be nice contrary market action. Everybody expects some sort of rally on the positive debt agreement news. Sell off in everything as in market and metals down, dollar up would be consistent with the aug low for metals.

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  6. Hi SC

    same with MUZZ, wondering what your target for S&P to begin it drop to 1263?


    Thanks!

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  7. I'm debating that, and watching closely. A failure here may be possible - not confirmed yet. If that happens, 1280's could be next with a better bounce there.

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  8. Thanks SC let us know what your thoughts are when you see more price action.

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  9. Exactly, wait/watch, the mkt should tell the story soon enough.

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  10. Hi SC

    what your take on today SPX and silver action? what your take for tomorrow with SPX and silver action?

    Thanks!

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  11. Looking very weak. More weakness coming.

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  12. Hi SC, with the weakness of the SP, isnt that going to push up the price of silver? and the fact that golds going higher?

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  13. Hi SC

    Are you still heavy in short position in Gold or Silver? or you left the building already?

    Thanks!

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  14. Hi SC do you think the SPX has dropped too far for a short here? What are you looking at to trade at the moment?

    I am a little disappointed with myself for not riding this drop down but need to look at the next trade now :)

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  15. With regards to Silver and Gold my downside target isn't much farther for SPX, and that means tops are near for the PM's. The important point is what happens after this SPX bottom (I plan to show that chart soon).

    Considering all of the crisis, Gold and particularly Silver have performed poorly. Gold up $20 over the last week and a half, Silver flat. Yes, they could go slightly higher, but the downside is where the real action is going to be.

    Muzz - Let's see where this bounces up to, shorts may be worth a look again soon. Over the next couple months, the moves are going to become much larger - so plenty of action to come.

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  16. Thanks SC look forward to your charts and analysis.

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  17. Hey SC I see that you missed shorting the S&P. A 60 point drop is a significant move. Were you so wrapped up in watching silver because you were way early on it? I see many people on here only trade when SC does. How many of you started shorting silver around $35? Blake and others kept asking and found out the hard way to stick with your own methods. You kept changing the silver charts every time it kept going up. I for one started shorting S&P last Friday and covered most of it today. Silver might be a decent short here over $40, not $35. What happened to a couple of Fridays ago with the silver plunge before the close and short silver immediately?!

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  18. Look at the miners, all are in red while PM is up. PM may use a debt deal delay as an excuse for one more bull trap. This is kind of mindless bullishness
    Gold look very scary

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  19. SC,

    Interesting comment on PM's weakness
    in light of full blown crisis to the world's reserve currency.

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  20. crisis in the world's reserve currency- it will happen, but not yet, and not when 85% of traders are expecting it. I am long the dollar.

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  21. what happens when those concerns about a dollar crisis subside and 85% of those trading the dollar find themselves on the wrong side of the trade? How far does it move up before they realize they are on the wrong side of the trade? I am quite comfortable finding myself in agreement with the other 15%

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  22. Hi Blake

    is there any base/fact on your long to the dollar? beside going against the masses?

    US is in huge debt, if they dont default now, it just means to me that they are kicking the bucket further. If they default now, it just means worst. Both logic points to lower dollar value.

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  23. SC....initially how far do you see Silver dropping if the dept ceiling is raised?

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  24. In fairness I have always said that PM's are a summer short play, and yes it was too early to short. May/June were good months for me with Silver. Didn't get the timing right this time, and feel bad about that. Despite that, I am confident that the short PM play is one of the big trades for the year. I will be there when it happens, and we're in the final minutes.

    My SPX analysis was correct last week and did call the top at 1347 and the day as well. I talked myself out of shorting it because I noticed the financials were outperforming. My thinking at the time was that this may indicate one more push before it fell. The behaviour of the financials was (and still is) important for a different reason as I realize now.

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  25. fartninja,

    SCs spx calls have been pretty much spot on. From his last post "1347 SPX target was hit exactly on Thursday, July 21st". I shorted some as well. Closed out today and now waiting for the debt ceiling resolution if there is one. As for slv, he has been calling the $40 range as a top or near a top for some time now. We shall see.

    Keep in mind that SC cyclical market analysis blog is just that, an analysis of the market. He posts his own trades and walks the walk. You dont have to follow him if you dont want to.

    Good luck trading to you.

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  26. InvestBB- I agree. As I said, eventually it will end that way. I just don't see it pushing down any further than we have in the near term. Maybe a multi month rally prior to a return to the downtrend. Nothing goes in only one direction. Going against the masses can be scientific enough. If everyone has already sold, who is left to take the other side of your trade? I do not have anything factual to give you passed that. Dollar cycles are also due for a big move up. This reasoning has always worked well in the past and is enough for me to take the trade

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  27. lix,

    Yes, SC has been very accurate with his S&P calls. I was just surprised he didn't short last Friday when it hit 1347 or so. If you go back a few weeks he was commenting shorting silver when it was 35-36. Silver is a completely different game now and wil be. Just thought he was preoccupied with silver. I very much appreciate all his comments and charts. Maybe my first post come off the wrong way. Good luck with all your trades everyone. Thanks for your work SC.

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  28. This is important.

    The debt deal is probably coming very soon (over the weekend?), but I still see in my cycles that there is more down to go. I suspect the deal may come out, the mkt bounce a little more, but then fall hard anyways. SPX may go as low as 1239.

    There still is no panic in the mkt. A bounce to 1315 SPX would have me looking seriously to short.

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  29. Hi SC

    Just back from vacation , I bought ZSL (short silver) today which I think is a great opportunity as I think august could be pretty bad month for silver...

    I think markets could break down hard next 2 weeks from today as we plunge below MA(200) next , time will tell.

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  30. Hi Sqwii

    welcome back!

    question about you mention market break down hard next 2 weeks, are you talking about good time to short the hell out of spx?

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  31. This has implications for Silver/Gold. Something really is bothering me about Silver.

    Silver topped first in April, with Gold topping weeks later. It is the same situation right now, and that really bothers me...

    The mkt never "likes" to be predictable, and "easy" is a particularly bad word when it comes to Silver. I think it is preferable that Gold tops first this time, and Silver last.

    That $40.30 level worked great as a reversal for SLV. I think Silver has some more quick downside on a deal announcement, but it does appear increasingly likely that it makes a final push to $43 or $44.

    I will show these charts and explain why these abrupt changes in detail on the weekend. Most important is that my target for Silver is going to $18.

    Sorry to flip flop, but I have to listen to what the mkt tells me. The timeline and mkt behaviour is telling me clearly.

    So may have a weekend/Monday debt deal and that is a great spot to short SPX, and cover the Silver to reshort higher.

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  32. I think high probability Gold tops today.

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  33. I did say this yesterday, and confident that I have the puzzle figured out now:

    "I'm debating that, and watching closely. A failure here may be possible - not confirmed yet. If that happens, 1280's could be next with a better bounce there."

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  34. Check this out:

    http://www.cnbc.com/id/43943482

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  35. interesting article SC.

    the article has some check point, the market really isnt changing a whole lot, pretty flat consider how far along the bucket has been kicked.

    what your take on that article?

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  36. I thought it was amusing in some ways, but also sad that Congress needs a panic to act swiftly. It says a lot about human nature and how it relates to the mkts. The cycles run the news, and not the news dictating the direction of the mkt.

    Point number 2. There is no panic - yet. With the weak opening this morning, I didn't feel any panic this morning. The panic is coming between now and Aug 10th imo.

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  37. I'll tell ya SC... I think a debt deal does not get done.
    Too many divisions right now to reach a consensus.

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  38. It really is strange whats going on. It makes one question what the real agenda of Washington is.

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  39. Hi SC

    Looking forward to your detail explanation this weekend:
    """
    I will show these charts and explain why these abrupt changes in detail on the weekend. Most important is that my target for Silver is going to $18.
    """

    Interested to know how you foresee $18 for silver? cause so far it seems to be hard to predict silver price. I actually thought this entire week event would have push silver way pass $40, but it been flat at $40 pretty much the entire week. For it to drop to $18, US debt ceiling must be raise and economy must be doing well. Or maybe a flash quick crash in silver price is all I can imagine so far. Your target of $18 that would be more than 50% retracement from current price, I really hope that happens, cause I want to add more silver bull then.


    Thanks and have a greet weekend.

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  40. SC, any updates? Silver seems to be loosing steam..

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