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Sunday, October 2, 2011

$SPX - Bearish Indications

Last weekend I had suggested that the first week of October looked bearish (even though I was expecting a moderate bounce last week).  We did see the moderate bounce last week, and now the current configuration appears bearish.

The analysis is further confirming that view.  Earlier in September I had shown a comparison to NDX.  At that time I had suggested that a firming in NDX relative to SPX was a positive indicator.  Now NDX is weaker.

SPX appears poised to test below 1100 on this dip.   

15min Chart
      

41 comments:

  1. Gold may be heading for the low 1700's now.

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  2. Remember, I am not overly bearish, but an early Oct capitulation move is in order imo. I'll be outlining some important timelines shortly.

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  3. Thanks SC for your work.
    do you think 1101 will be broken this week?

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  4. Thank you. 1090 is a target for tomorrow with a decent bounce from there into Wed.

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  5. thank sc. if there is a decent bounce from there, what would be your expect?

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  6. Let's say 30-40 points bounce. However, expecting hard down again Thurs. Have to be careful and nimble for sure.

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  7. SC,

    Do you see a low around the 11 Oct 2011 ? It is a full moon as well as the 5 year anniversary of 11 Oct 2007.

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  8. Bounce into tomorrow seems likely, and I see Oct 6th as a possible hard down day. Oct 13th is a potential bottoming date.

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  9. Whatever happened to Gabe?

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  10. His and others views (bullish or bearish discussion) are always welcome here. All I ask is consideration with other guests.

    This is an exciting market for traders. The best part is that the largest moves are yet to come!

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  11. SC

    Can you elaborate more on your comment, "The best part is that the largest moves are yet to come!"

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  12. Regarding, "what happened to Gabe? ...His and others views (bullish or bearish discussion) are always welcome here. All I ask is consideration with other guests."

    Could you elaborate? Did someone make an inconsiderate comment?

    SC, I know you asked gaberocks11 to email you. Sorry if this is a distraction here but gaberocks11's point of view is very important to me, if he's not posting or is off to a new board I'd really like to know.

    Gaberocks11, let me know where you are posting or what is going on with you. Send me an email to quietriotr at hotmail dot com or just let me know what's going on. I'm still looking for your target of 980 on spy.

    You and SC are two of the best market forecasters I know of.

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  13. That comment has to do with my big picture charts. Those are coming soon. I don't want to get too far ahead of the mkt, but it is always important to keep looking out a few steps ahead as well.

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  14. I hope Gabe does continue to post as well. Those that have made the effort to comment and share are much appreciated.

    I have noticed that generally traders are in a rather solemn mood. I don't see any panic yet. There is actually a sense of calm lately as the mkt grinds lower.

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  15. From the regular posters, and that includes Gabe, I cannot recall anyone making an inconsiderate comment. I believe the respect factor is not an issue here since everyone behaves appropriately. Views that may or may not concur with your views SC are and should be welcome. Personally I like to listen to those views that are contrary to mine so I can seek out where I may be wrong.

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  16. SC,

    I am with you on providing opportunity to everyone to post here and I must say that he has given liberty to everyone....

    Ok let's get back to work anyone has any reason for this recent selloff? SC I know you were saying that you would go long silver if it hit 27...are you still on it? or you have changed your plan...thank you

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  17. Silver has been relatively quiet and sideways so I have just left it to watch and wait for a setup. I see now it is sliding a little, so a good time to review.

    Generally I would like to see an extreme on it to make a move.

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  18. looks like today is extreme and reaching close to 27 so will wait for tomorrow how it reacts...

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  19. It feels like gold should retest 1530's and silver 26's very soon. whats your take on this guys?

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  20. What a bounce! The plan from yesterday has worked well:

    "1090 is a target for tomorrow with a decent bounce from there into Wed."

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  21. SC whats your target for the lows?

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  22. I haven't really set firm targets, preferring to rely more on the timing aspect, and fine tune the price targets close to those dates.

    In this type of mkt I have found it typically better to just let things unfold and review the behaviour nearing the timing turn dates. I'll try to shed some light on pricing in advance whenever possible though.

    It will be helpful to see the next couple days of trading.

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  23. Hi SC,

    the view with an hard down day thursday and a bottom for Oct 13 is confirmed even with this kind of bounce?
    Thanks a lot.

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  24. That bounce into the close was so powerful that it makes a lot of sense to review in depth here so I am doing that now.

    In my cycle work this Thurs looks just as weak as Monday did.

    Those dates are not confirmed as a bottom, just dates that I have flagged for potential weakness. Weakness could also manifest as a higher low though for example. So bears particularly have to watch closely. Bottoms typically do sneak up.

    Let me review carefully first, and then I will address the issues in detail.

    Thanks.

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  25. SC,

    I know you have spoken before about some big surprises the market holds for the future. Given that we dipped under 1100 and came within striking distance of the 2010 lows, does your work show the major surprise to be for the upside or downside? Given the predominant bearish sentiment now it would make sense that a "surprise" would be to the upside but this same question a couple of months ago could have warranted a different response.

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  26. SC,

    After the 13 Oct "low". Do you see a 2 months plus relief rally till around Dec 11, and then a plunge in 2012 to new lower lows.

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  27. The surprise is coming on the upside, but we need to see a confirmed bottom first.

    The bounce yesterday was strong, but tomorrow looks weak.

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  28. I'll show the chart with the timelines.

    The key right now is to identify the bottom. It is possible we saw the bottom yesterday already, but in any case I still see weak spots tomorrow and until Oct 13/14th. So a rally would not build up steam until after that imo. In other words it is not a good idea to chase upside today.

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  29. SC, you dont think we could be on the verge of the waterfall here like in '08? back then we bounced before cliff diving ....

    http://stockcharts.com/h-sc/ui?s=$INDU&p=D&st=2006-01-02&en=2008-12-31&id=p46393682888&a=245329863&listNum=4

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  30. I see the spot you are looking at in the chart with the bounce in 2008. This time instead of crashing the support it'll bounce very sharply. It's clear from my cycle work.

    I really feel that we need to see a moment of panic though. We did not see that yesterday imo. Uneasy maybe, but it was not panic. As well there hasn't been any really "bad" news. A piece of significant news at a turning point is preferable.

    Financials have not followed through today. Bearish.

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  31. SC, here is another chart im looking at suggesting further down side, perhaps all the way into 28th, we made lower low and bounced on the bank bail out news, that was purely emotional, not technical:

    http://img72.imageshack.us/img72/2985/dowoct2011.png

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  32. The big difference between now and 2008 is that all eyes are looking for a drop. Very few in Sept 2008 were looking for a drop. The bear trade is crowded this time.

    Look at how the media are trying to compare Morgan to Lehman. The bear trap is being set...

    "Morgan Stanley executives are battling a daily barrage of speculation and nay-saying to try to stem a sharp slide in the company’s stock, the New York Times reports."

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  33. Both RUT and Rifin - financials are weakening. Makes sense to short SPX around this level 1139 for a short term move.

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  34. Hi SC, what level do you see SPX dropping to before we start this rally into year end? I wonder if we have seen bottom already. I would have thought and was looking for a low of 1010 to 1050 level for a bottom. What are your thoughts?

    Thanks SC

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  35. I have also been debating whether the low could be in. I can't rule it out, but I'm seeing a lot of traders saying the low is in. That makes me think another test just lower than 1075 might be in order.

    Having said that, I wouldn't try to push a short trade too far here. Covering some or all at around 1095 may be a safe way to go, and then start considering longs on dips from there.

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  36. SC, where do metals go from here? Silver would probably pick up the liquidity and run up somewhat..

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  37. The metals have been so flat lately, that I have just been watching and waiting for some better action. I do think Silver should retest the lows, but I'm not sure if it could pop first or what. The larger swings are the ones I am mostly interested in capturing. I think we shall see some nice moves coming in the months ahead.

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  38. I agree SC not good to push this, are you looking at markets starting to turn down tomorrow?

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  39. Yes, I see a lot of potential for weakness tomorrow....

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  40. Selling a lot of my longs into this rally at the close. Just bought them yesterday and made really good profits. Might just wait until tomorrow to see what will happen.

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  41. today's financials didn't catch up till the very end. It seemed like the market wanted to roll over several times. Always the last 45 minutes is where the action, up or down! Russell was kind of weak today too. Do you see 1075 broken or make a higher low this week?

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