It is shocking how badly Financials are underperforming SPX recently. Both SPX and the Financial Index Rifin have been plotted below to show this comparison.
It is a clear signal that a major breakdown is approaching. Financials are leading the market down, and that signal has been intensifying.
60min Chart
S&P really looks like it wants to set a new high right now. If it keeps bumping into this resistance, it will eventually break
ReplyDeleteI'm mainly just focused on the bigger picture. I see a very large drop (approx 131 points by my calcs) and just minimal upside.
ReplyDeleteFinancials tell the tale imo.
You can forget about that SPX 1206. That ain't gonna happen. Way too many important indexes like the $COMP and the $TRAN hitting their 2007 highs.Quite bullish leading indicators. Plus..we've blown thru the recent S&P high of 1344 today. Unless this market pulls back after Bernanke's speech tmrw...we may not even get close to 1306....or even 1336 for that matter.Plus...most of the earnings are coming in better than expected.It is what it is.
ReplyDeleteAdded the rest of my shorts. The warning signs are there. Financials rallied some today but still looking awful overall. VIX has been higher for a few days now. RUT has a lower high from early April.
ReplyDeleteNFLX sure getting hammered today!
ReplyDeleteSPY looks relatively similar to the action at the July bottom.
ReplyDeleteOver which timeframe are you looking at SPY Blake?
ReplyDeleteI was just looking at a daily chart. From July to September, it looks kind of similar to the action and break out we are seeing recently. What make this one different?
ReplyDeleteWell a big difference is that everyone was bearish then and now they are bullish. Many talking 1400 plus etc...
ReplyDeleteAlso there is too much talk of this inverse H&S pattern right now. It's a "Fake break".
ok, thanks SC
ReplyDeleteThere is just no stopping this. The FED will never let it happen. I see your reasons SC, and they make alot of sense, and I agree with them but it just will not go down. Financials usually do lead, but not this time.
ReplyDeleteAll the "corrections" are in individual stocks in sub-sectors...like NFLX...but are rotational distribution devised by the FED so that money is never actually leaving the market. In fact..we're still on POMO schedules...so we've still got more new money coming in.And the money that leaves one stock,goes right back into something else. Lots of stocks like CAT hit a 3 yr high today...and hence we also have 3 yr highs on the DJIA and the S&P and NASDQ.Anyway..with this recipe...we cannot get a sustained correction on the stock market as far as the DJIA and the S&P goes.
ReplyDeletefinancials are staying a bit firmer this morning, no?
ReplyDeleteYes they are. Interesting that SPX is selling off with financials holding firmer. I suspect maybe indicating that this mornings selloff isnt ready to follow through much just yet.
ReplyDeleteCould be volatile with the Fed today.
financials do appear to be in a bear flag to me though for the last 5 days or so.
ReplyDeletemy fingers are crossed for a sell off soon, but without some sort of flash event, im not seeing this happen. we shall see at 230 i guess, but looks like up up and away...
ReplyDeletetough to get a sell off when the dollar just continues its downward spiral
ReplyDeleteshorting is not easy in this market-but if you are patient, it does pay off quickly. 2 of our trades from YESTERDAY-over 8% profits each.
ReplyDeletehttp://marketspath.blogspot.com/
so much for no rally left, what do you think SC?
ReplyDeleteFinally we hit 1352. That has been my long time target. So let's see what reaction we get now.
ReplyDeleteI think we gap down big one of these days...
cut straight through 1352
ReplyDeleteThe DJIA,S&P,TRAN,NSDQ,and several other indexes all way up and at another 3 yr high today. Stocks like AMZN up 15 today. Gold up 27. Silver up 3. Dollar crushed again some more and VIX still way down at 15.- There is no way in hell you'll ever get a selloff with that recipe.
ReplyDeleteAll the same bearish signs are still in place.
ReplyDeleteOf note Financials Rifin retraced today a perfect 61.8% to the early April high. Huge divergence with the new highs on SPX. Financials already leading down.
A low VIX is generally bearish for mkts going forward. VXX I have noticed is holding well over the last few days. Another sign.
Double top on RUT today with early April. No bullish signs there either.
With all due respect -when S/P hit 1317 you called for "a freefall next to 1200" ect etc etc-I have to ask-are you a perma bear?? if so you should let the readers know that.
ReplyDeleteJust last week on the 20th SC you said that you doubt the S&P would go higher than 1340. Could stop in the 1330s. This was your top before a frefall to 1206 or so before it went back up to 1352 as a high. Well there was no frefall and it just keeps going higher and hit 1357 today. I am curious about one thing? Are wanting to short so badly and want to be the one to call the freefall first that you are making your charts "say" waht you want them to say. A lot of us do technical analysis and I didn't see the patterns you were predicting. I agree that with another post that individual stocks have had corrections, but not at the same time to keep the market afloat. You were so excited about NFLX yesterday. It hit its 50dma and started going up again today. This has been the process for a lot of stocks. Of course there are huge bearish signs in the financial systems and stock market. There has been for several years...the market keeps going up.
ReplyDeleteI have stated clearly that the medium term view is a freefall to low 1200's. That view is intact and I see no reason to change it.
ReplyDeleteMy short term views have been bullish at times to complete the topping process. I posted sharply bullish targets from the 1250's and just recently for a push back into the 1330's to 1340 area. Both of these bullish calls were successful. At both of these times many were calling for P3 down etc...
So if anything my calls have been much more evenly balanced than most out there.
I call the market moves as per my cycles and other analysis - bullish or bearish. I trade both sides of the market.
Hey John, in my opinion SC is a permabear. On another site he was calling for a crash since last November. He said he was "all-in and short" and using margin with FAZ. He was calling for a freefall every other day and held steadfast with FAZ for over 3 months. It went down about 40% during that time. He refuted others who said the market was going up. He only started to trade both sides after 3 months of holding FAZ which was a big loss. People can make any chart look the way you want it to if you are so stuck in that train of thought.
ReplyDeleteExcuse me Nicky, but would a permabear call for a very large rally from 1250's SPX with Nikkei just having crashed 16% overnight due to a nuclear meltdown?
ReplyDeleteI don't think so.
If you have a problem with my calls why don't you state your own calls, and let's see how accurate they are...
BTW, bullish/bearish views are welcome here. I don't expect people to agree with me at all times either.
ReplyDeleteMany others have good ideas and I appreciate that.
Hey everyone that is coming in and bashing SC because the spx went through 1352 and we haven't had a freefall yet..there are 2 things to keep in mind,,
ReplyDelete1.) you aren't paying him a dime
2.) nobody is making you come to his site and read what he thinks. If you don't agree..LEAVE..very simple!!
couldnt agree more. if you want more free advice and love posting unhelpful comments, go to yahoo! finance message boards! theyre filled with idiots who have nothing else to do all day. this is good stuff whether right or wrong.
ReplyDeleteHey bashers...SC call it as he expects sees it. He was bullish at 1250 when no one else was and stated it would go to 1330-1350 or so.
ReplyDeleteWhy don't we just see what happens. I like the way he makes his calls without the BS you see on other sites. Personally, I don't see how the market can go down but, Lord knows, I have been wrong many times before so what do I know?
Look at Williams%R weekly reading. Very Overbought.re S@P
ReplyDeleteAre you still holding short SC?
ReplyDeleteYes, heavily short and I'm holding. It's the big play on the downside that I am targeting with this position. I think the logic is sound with financials particularly among other things already confirming the move is coming.
ReplyDeleteMy estimate from the calculations is for a 131 SPX point drop.
Hard for me to imagine, but got to respect your confidence! Financials still doing well today
ReplyDeleteYes, I agree that the financials are holding today but this is just on a micro level. This likely indicates that we have some sideways chop before the bottom falls out.
ReplyDeleteZoom out and the picture with the financials is terrible. They have badly underperformed since late March. I take it as a serious warning.
trannies triggered a dow theory sell signal today. Dow has to get above 2007 highs to wipe that out..Not an easy task this time to kill the umpteenth dow sell signal that has been generated since March 2009 ;)
ReplyDeleteTxn acting as planned..+1.6% intra-day on the short from yesterday. Still see lower..but could bounce here..explained in the blog.
http://marketspath.blogspot.com/