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Tuesday, June 28, 2011

$Rifin - Financials Performance Gap

SPX rallied today (as shown on the following chart in yellow), but the Financials were flat.  One reason why is that GS has been badly slumping.  There was mortgage settlement news from BAC after hours so I will be watching the Financials closely tomorrow. 

In these situations Financials may actually pick up the pace and attempt to close the gap.  Yet, the underperformance is an early warning sign.  I've been targeting the 1315 area for SPX, and that still seems possible. 

I'll have additional details soon, but I am considering June 30th as a potential topping date for SPX with a decline to follow into late next week.  That would likely be a higher low.      

10min Chart
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31 comments:

  1. AtulJune 29, 2011 at 2:20 AM

    Hi SC - Let me tell you one thing.... I have been following numerous number of blogs which are Elliot specialist and you name it sort of Market Technical specialist.. but no one is near to your perfection calls that you have made since last couple of months on SPX.

    Let me also tell you, they might have their own style and way of working... no criticism.. but I have now deserted from their blogs and the only blog I visit regularly for my trades is YOURS.....

    Keep it up SC.....

    Regards,
    Atul

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  2. MuzzJune 29, 2011 at 3:31 AM

    Hi SC, great work again with your analysis. After this bounce in the SPX to the 1315-1320 area is your downside target still 1239 in July? I see you have mentioned a higher low coming on the next drop, have you changed your target low for the next leg down?

    Many thanks again :)

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  3. SCJune 29, 2011 at 5:41 AM

    I try my best Atul. I feel fortunate to have identified cycles that are working well. So without becoming overconfident, I'll see if I can stay in tune with the market as long as possible.

    Muzz, I still think we go down hard in July.

    So the basic plan is that we top out around 1315 (give or take) next few days, and then decline into the end of next week. I'm going to look at this in more detail later, but for now 1280's higher low might be a target with a significant bounce from there on the way down to 1239 area.

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  4. MuzzJune 29, 2011 at 6:14 AM

    Thanks SC look forward to seeing your next chart on SPX. Amazing how the markets have bounced so hard the last few sessions. This will be squeezing out the shorts for sure, then it will turn it the other way and squeeze the longs. It is really volatile at the moment as you say.

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  5. RogerJune 29, 2011 at 6:22 AM

    Thanks, SC. Just a question about silver. It looks like the silver is bouncing now, should I expect SLV to reach about 36? Then expecting a big drop to 30 or even lower?

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  6. SCJune 29, 2011 at 6:50 AM

    Silver bouncing and I think it has more to bounce. I don't think SLV will make it back up to $36 though.

    I'm working on fine tuning the targets for Silver, stay tuned.

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  7. BlakeJune 29, 2011 at 7:05 AM

    SC- great on silver! I am very tempted to add to my short silver short today. I don't think it has much time left to push higher...maybe 1 or 2 more days.

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  8. comatJune 29, 2011 at 7:59 AM

    great call again SC , thanks a lot.

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  9. lixJune 29, 2011 at 8:29 AM

    SC, great calls. Do you still see slv hitting your target of 35?

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  10. BlakeJune 29, 2011 at 8:33 AM

    I am beginning to build my long position in the dollar futures again. just picked up 1/3. Plna to get another 1/3 by end of day if it continues to slide. I will buy the last 1/3 when I am profitable on the first 2/3.

    SC- I really don't think silver has much upside left at this point. I am really tempted to put on more shorts here. You think it has another dollar left in it?

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  11. SCJune 29, 2011 at 8:46 AM

    I am doubting that SLV would make it to $35, but I do think $34.50-75 might be in the works. Still a touch early, but minimal upside for Silver, and I think it gets hit hard in July.

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  12. BlakeJune 29, 2011 at 9:29 AM

    fyi- my analysis says that the dollar index cycle has not topped out yet. This means it should have close to 2 points of upside from here sometime in the next 2 weeks for anyone interested.

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  13. RowleyJune 29, 2011 at 1:26 PM

    Geez what a rollercoaster! Averaging down on Aug 128 puts. Will put in one more buy tomorrow if it's up again.

    SC do you ever post your trades or is that not your thing?

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  14. SCJune 29, 2011 at 2:07 PM

    Yes, in the past I have posted some of my trade entry/exits at major turning points. For the most part my analysis shown here has been selected for the larger moves in a few key areas.

    I'm very active in a number of different areas and special situations, as well as different timeframes, but haven't shown the analysis for that. So for much of this I have not posted trades.

    I'm not short yet, but I do think we are rapidly closing in on the sweet spot...

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  15. SantaJune 29, 2011 at 2:12 PM

    I'm not short yet, but I do think we are rapidly closing in on the sweet spot... <---think that is the cow bell for us noob to start buying small portion of this soon to be sweet spot.

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  16. RowleyJune 29, 2011 at 2:23 PM

    Yeah, I can see it now, that I jumped the gun yesterday, when I started my puts position, but still have enough to average down quite a bit if need be.

    Well, just want to say, I certainly do appreciate your insight. I visit a lot of sites throughout the day, and this is definitely one of my favorite daily reads.

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  17. SCJune 29, 2011 at 2:42 PM

    Excellent Rowley, all the best!

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  18. RogerJune 29, 2011 at 3:01 PM

    SLV reach to 34.04 today, and the spot silver price keep climbing a little bit after close. I think tomorrow might be a good spot to short if SLV topping again. How's that sounds? Cheers.

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  19. RogerJune 29, 2011 at 4:06 PM

    There is a post in Trader Dan's Market View,

    http://traderdannorcini.blogspot.com/2011/06/gold-silver-ratio-reflects-trader-views.html

    Just share with you guys. If I understand it correctly, the post implies that the risk is increasing when gold-to-silver ratio decreases. I roughly look at the major local low of this ratio and found that SLV reached a top. I don't comparing this ratio and SLV side by side though. Will this indicator can also play a role in your analysis, SC? Just a FYI. Thanks.

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  20. SCJune 29, 2011 at 4:57 PM

    Thanks Roger, let me look into that.

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  21. TomJune 29, 2011 at 9:34 PM

    What we have on the S&P500 chart now is the bullish reversal candlestick pattern of three white soldiers. This is one of the most reliable and bullish candle formations of all. It more than suggests to me that the low is now in and it's upwards until August and September, at least. I shall be buying the dips.

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  22. SpudthorpeJune 29, 2011 at 10:04 PM

    The dollar has taken a beating tonight - DX has fallen to its 61.8% retrace at 74.6. There is strong support below around 74 from the 78.6% retrace and also trendline support. If DX falls that far, stocks and commodities may continue to rally in the near term.

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  23. SqwiiJune 30, 2011 at 3:11 AM

    Hi SC

    I've just begun taking the profits from 1260 yesterday and if we move higher today I will probably take all profits and move into shorts - I have a short term top cycle comming here soon - and think its time to get into shorts again.

    This time I think we will see below MA(200) so time will tell - but tides are changing.

    Best

    Chris

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  24. SCJune 30, 2011 at 6:48 AM

    Here we are, looking at 1319 or 1322 as possibilities... I'll be shorting soon, may scale in.

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  25. SCJune 30, 2011 at 7:33 AM

    Shorted 50% SPX at 1319.

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  26. SCJune 30, 2011 at 7:39 AM

    Financials are not following through with the SPX rally today. They did have a big day yesterday though so we will have to wait and see now.

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  27. SpudthorpeJune 30, 2011 at 8:42 AM

    I've also taken my first step scaling into SPX shorts. I strongly agree with your expectation of a downturn. However, a top right here is so obvious - 50MA and the trendline off the top - that I wouldn't be at all surprised if we bust it by 10-20 points just to run stops before turning down for real. I will keep my stops set well above the "obvious" 1320 area, and continue to scale into shorts even above that point up to 1350ish.

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  28. SCJune 30, 2011 at 8:53 AM

    Good points, it might still be a touch early and I am suspecting a double top with a decent selloff in between.

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  29. SCJune 30, 2011 at 9:35 AM

    I am monitoring a pattern that suggests potential for a miniature "flashcrash" today/tomorrow.

    Approx 20 points if it happens - potential, not a given. If it happens the mkt would likely bounce sharply after to near this level again.

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  30. BobJune 30, 2011 at 9:59 AM

    SC,
    A ride down to 1280, then 1240 still in the cards if this mini-flash crash does not happen?

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  31. SCJune 30, 2011 at 10:03 AM

    Yes, I'm very bearish at these levels.

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