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Thursday, June 30, 2011

SPY - 1 Year Anniversary (from July 1st, 2010 bottom)

The target was hit today.  It is not a coincidence that the market strongly surged upwards into the 1-year anniversary of the July 1st, 2010 bottom.  It's a timing cycle due.

The turquoise fork line was backtested today.  I am suspecting a sharp selloff to test 1295 SPX or so next.  It might take the form of a mini "flashcrash".  July 6-7 may be a potential bottom.  A bounce back up from there to form a double top is favored using 3 different cycle patterns.    

I plan to show more detailed charts on the weekend.

Daily Chart
Posted by at

44 comments:

  1. SqwiiJuly 1, 2011 at 1:03 AM

    Hi SC

    I've also heavy short here , just looking for more downside , but with a boune around 1300 area before further plunge.

    I see us move down further until around mid July - we play out like last year 2010 with flash crash (right after QE1 done) , now (QE2 done)... we can finally let the markets do what it wanna do.

    We should slice below MA(200) this time - and then imo form a real bottom , as everyone would panic and run away after the technical break- then we could see a massive rally after that , but for now... VERY bearish here too.

    Dont know if I expect much today , think we will start next week , but probably some today..

    Best

    Chris

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  2. SCJuly 1, 2011 at 6:04 AM

    It would be nice to see some fireworks before the weekend as it is my birthday tomorrow! Shorting at this level is a nice present anyways...

    If it is quiet today then I'll be looking for the selloff to start early next week in any case.

    Thanks Chris

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  3. SCJuly 1, 2011 at 6:12 AM

    SLV made it up to $34.18 yesterday. My target was $34.50. Silver is slumping now, but I think it should go back up next week and test that high yesterday.

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  4. AuAgBuyerJuly 1, 2011 at 6:19 AM

    Happy Birthday in advance SC, what r ur thoughts on Gold?

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  5. SCJuly 1, 2011 at 6:32 AM

    Thanks. Gold is very weak. Like Silver, Gold probably manages one last bounce next week before it plunges.

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  6. BobJuly 1, 2011 at 6:38 AM

    SC, happy birthday!

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  7. SCJuly 1, 2011 at 6:46 AM

    Thanks Bob, a lot of eyes on this ISM number today, talk of positive. I am wondering if it marks a top.

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  8. SCJuly 1, 2011 at 7:15 AM

    Shorting the last 50% SPX...

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  9. SCJuly 1, 2011 at 7:36 AM

    100% short SPX now, I would think 1333 area should contain this rally.

    Same gameplan down to 1295 area next.

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  10. ZJuly 1, 2011 at 7:51 AM

    SC - I agree with you on the short (not 100% though at the moment), I believe we're in a period of high volatility going forward so we'll be seeing some huge swings. Good luck man, and happy bday.

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  11. SCJuly 1, 2011 at 7:54 AM

    Today's trading increases the chance of the mini flashcrash. Tuesday? It could happen overnight so that is why I am all short.

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  12. SCJuly 1, 2011 at 7:57 AM

    Trader's paradise Nuggy!

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  13. RogerJuly 1, 2011 at 8:01 AM

    Happy birthday, SC.
    Canada market closed today. I just pick up little amounts of HZD for shorting silver yesterday. Just a question here. Do you mean silver (and gold) might do a last bounce to testing high (SLV 34.18) next week before it plunge? Thanks.

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  14. ckoreyJuly 1, 2011 at 8:03 AM

    Be careful if we drop and hold 1317-1320. If it holds we rocket up again.
    As of now I have no sell signal.

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  15. SCJuly 1, 2011 at 8:05 AM

    Happy Canada Day Roger! Yes, that's the plan. Likely another bounce, but I'm very bearish on PM's overall.

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  16. SqwiiJuly 1, 2011 at 8:18 AM

    SC

    Posted intraday alert on my blog - think its a brilliant time to short markets at 1331 here now - with stop if markets moves above 1338.

    Buy $TZA here 33.5 with stop below 33 , I'm in huge , good luck bud.

    www.sqwiitrader.blogspot.com

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  17. katzo7July 1, 2011 at 9:45 AM

    great call CA.

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  18. SCJuly 1, 2011 at 10:07 AM

    Fact of the day:

    At the moment, the index is up 5% for the week, and it has been up more than 0.75% on each day. If the index manages to close up more than 75 basis points today, it will be just the 8th time in the index’s history that it has closed up more than 75 basis points for five trading days in a row.

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  19. justmy02July 1, 2011 at 10:32 AM

    Looks like they want 1340+.
    Still think the SPX is coming down Tues / Wed? Below 1295?

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  20. SCJuly 1, 2011 at 10:35 AM

    The way this market is acting, I'm not sure it can avoid the flashcrash anymore...

    It has to consolidate sideways first before it collapses though. It could happen today, overnight Monday, or Tues?

    I'm thinking 1315 might provide a bounce on the way down to 1295.

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  21. http://www.marketspath.com/July 1, 2011 at 11:30 AM

    sc..so what happened after the prvious 8 times the 75 bp up 5 straight days in row..currious ;)

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  22. The HookJuly 1, 2011 at 11:30 AM

    Biggest breadth thrust since March 2009

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  23. ckoreyJuly 1, 2011 at 11:30 AM

    I think the 1258 low was an important low. I would be careful being to heavy on the short side. I now see 1320-1325.

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  24. The HookJuly 1, 2011 at 11:31 AM

    NFLX mini flash crash at 1pm

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  25. ckoreyJuly 1, 2011 at 11:37 AM

    Also, if we can consolidate around 1300ish I think we will see 1425 plus by year end.

    1258 may prove to be a very important low.

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  26. SpudthorpeJuly 1, 2011 at 11:38 AM

    A couple of points here:

    1) 1346 ESU (about 1350 SPX) is the 78.6% retrace from the May 2 high. Don't be surprised if it goes that far.

    2) I often trade index options (i.e. SPX not SPY). They have a large spread, usually several dollars. I always try to split the spread with limit orders. In my experience, when I CAN split the spread easily, it often portends an unfavorable (to me, as the buyer of the options) market move. When I have to pay closer to full price, it usually means the option purchase will work out. Today I had to pay full price for put options, implying we are near a top. The logic here is simply that option market makers are "smart money" and have better insight than most.

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  27. SCJuly 1, 2011 at 11:50 AM

    mp, I don't have the data just yet.

    1345 is certainly very important, and extremely heavy resistance. We're still grinding up, and sideways phase hasn't started yet. Need that for the flash to kick off.

    Taking long VIX positions makes a lot of sense to me.

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  28. http://www.marketspath.com/July 1, 2011 at 11:58 AM

    Thanks sc..I was referring to your comment about the being up 75 basis points for 5 straight days..you said it has only happened 8 other times in history..I was wondering what happened to the markets in the past..after being up 75 bp for 5 straight days?

    by the way, today is a turn date for us..so today's high should be an important high

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  29. SCJuly 1, 2011 at 12:05 PM

    I don't have the stats yet, but all three of my cycles suggest flash down to 1315, bounce and slower decline to 1295.

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  30. BobJuly 1, 2011 at 12:07 PM

    wish the weekend would start earlier :)

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  31. SCJuly 1, 2011 at 12:29 PM

    Would love to see a flash for my Bday, but running out of time. Could be starting the sideways phase...

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  32. AnonymousJuly 1, 2011 at 12:30 PM

    The bears are screwed here, too many people don't believe the bounce for it to drop that much.

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  33. ckoreyJuly 1, 2011 at 12:44 PM

    1325 now support and will move up as we ramp higher

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  34. AlesundJuly 1, 2011 at 12:59 PM

    Did you buy into the rally H? Let's see who ends up making the correct call. My friendly wager is on SC.

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  35. SCJuly 1, 2011 at 1:05 PM

    That's all she wrote. Have a great holiday weekend everyone!!!

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  36. BobJuly 1, 2011 at 1:09 PM

    Happy birthday SC and thanks for the blog!

    Have a great 4th everyone!

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  37. ckoreyJuly 1, 2011 at 1:12 PM

    Happy Birthday and have an amazing weekend!

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  38. RowleyJuly 1, 2011 at 1:22 PM

    I'm all in on the put side at the close. Will be an interesting next few weeks for sure.

    SC have a great birthday and everyone else, a happy 4th! See you all on Tuesday.

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  39. comatJuly 1, 2011 at 1:23 PM

    Happy Birthday SC and have great weekend . Thanks for all your works

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  40. MuzzJuly 1, 2011 at 1:24 PM

    Happy Birthday SC.

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  41. SpudthorpeJuly 1, 2011 at 1:37 PM

    Happy birthday.

    I was surprised not to see substantial selling on strength in the index ETFs today. That often presages a sharp downturn.

    http://online.wsj.com/mdc/public/page/2_3022-mflppg-moneyflow.html

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  42. lixJuly 1, 2011 at 3:00 PM

    Happy Birthday SC.

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  43. MoneymanJuly 2, 2011 at 3:08 AM

    Hi SC!

    Happy birthday!! Hope wou will get a nice weekend..Hmm about the stockmarket..When will you consider that there will not be some kind of flashcrash or a drawdown to 1315..If we trade above 1345?

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  44. SCJuly 2, 2011 at 8:34 AM

    Yes, having a great day! Thank you.

    I'll explain this weekend with detailed charts what I am expecting next. I looked at things closely after the mkt yesterday, and realized some important points about where we are in the big picture.

    That was a power rally last week, and major surprises are coming for both bulls and bears going forward.

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