Pages

Thursday, July 7, 2011

SPY - Bull Trap

On June 12th, I alerted about an approaching strong rally and "Bear Trap".  Therefore, it is only fair to point out the present "Bull Trap".  The target is some 50-60 points lower than today's 1353 SPX close. 

The orange midfork was tested today, and I feel strongly that should provide a very substantial obstacle to further advances in the near term.    

Daily Chart















Financials (in Red) were outperforming SPX on July 1st.  However, for the last 3 days in a row, they have underperformed SPX, and traded flat for most of the day today.  Additionally, the high for Rifin today was not much higher than July 1st. 

The weakening performance of the Financial sector is a warning signal about a looming decline for markets. 

2min Chart
Posted by at

36 comments:

  1. George HJuly 7, 2011 at 10:11 PM

    Any timing for this pullback?

    ReplyDelete
  2. astrofiboJuly 8, 2011 at 4:10 AM

    SP500 Rallye of 15-20%!

    http://astrofibo.blogspot.com/2011/06/sp500-daily-two-months-rally-of-15-20.html

    ReplyDelete
  3. SCJuly 8, 2011 at 5:25 AM

    A double top is a likely scenario in this case, and I also see the decline into the target as being choppy. So the entire process will take a minimum of several weeks.

    July 22nd is important in my timing cycles, and that could be a minimum timing estimate the bottom. Let's gauge the progress in a week and see how the timing is shaping up.

    The alternating bull and bear traps are going to increase in size in coming months.

    ReplyDelete
  4. BlakeJuly 8, 2011 at 5:37 AM

    now that is some volatility. nice move down in the market, if silver can just get some of that selling pressure now...

    ReplyDelete
  5. BlakeJuly 8, 2011 at 5:41 AM

    gold going straight up

    ReplyDelete
  6. SCJuly 8, 2011 at 5:53 AM

    Yesterday I said:

    "Also higher low for VIX today vs July 1. Leaning towards at least a test of 1335 area tomorrow."

    If it holds at 1335 area, then could go back up to hit the double top. If it pushes down through 1335, then 1328 might be a possible. It'll be interesting to see how it settles in today.

    I was very heavily short at the close yesterday. I'm back to profitable with my big short add yesterday so will likely cover some today to get back to a more size.

    ReplyDelete
  7. BlakeJuly 8, 2011 at 5:55 AM

    this is very confusing movement thismorning...market down, dollar down

    ReplyDelete
  8. BlakeJuly 8, 2011 at 5:56 AM

    well done on your trade SC! Were you expecting metals to fall with the market as well? I do not know what to make of these moves this morning

    ReplyDelete
  9. SCJuly 8, 2011 at 6:00 AM

    I'm wondering if this spike is the sweet spot to short Gold?

    ReplyDelete
  10. BlakeJuly 8, 2011 at 6:04 AM

    I'm wondering if i am going to need to hold silver short for another point to the upside of it is will ever start falling at all.

    ReplyDelete
  11. SCJuly 8, 2011 at 6:08 AM

    Interesting that Gold was weaker yesterday than Silver. Today the reverse. Should be close to finishing for both.

    ReplyDelete
  12. ZJuly 8, 2011 at 6:11 AM

    good trading SC.

    ReplyDelete
  13. comatJuly 8, 2011 at 6:12 AM

    SC,You still think silver will head down , right?

    ReplyDelete
  14. BlakeJuly 8, 2011 at 6:13 AM

    10% rally for silver off the lows...hard to call it countertrend. Obviously I hate being in a losing trade for a week, but I am actually more worried that I am going to miss a big rally in the metals here by waiting for a pullback. Extremely confused. The bullish percet for the metals reached low enough levels that this really could be the beginning of a very powerful rally. I hope you are right SC, but I am really losing faith that this is going to stop. I wish I could see what you se, because I don't see anything bearish on the metals charts at all at this point.

    ReplyDelete
  15. BlakeJuly 8, 2011 at 6:17 AM

    on the other side, the cycles for silver and the price action are not aligned at all right now for the bottom to be in. totally screwed up

    ReplyDelete
  16. SCJuly 8, 2011 at 6:40 AM

    I'm still bearish on Silver. I think it needs a capitulation bottom. Probably the mixed signals are because after a final bottom, the trend is bullish again out several months.

    ReplyDelete
  17. BobJuly 8, 2011 at 6:46 AM

    Those bad nonfarm payroll numbers seemed to had negligible effect this morning. The market probably looking forward to good earnings season.

    ReplyDelete
  18. phantomJuly 8, 2011 at 6:51 AM

    sc,
    if you think silver will plunge, do you think gold will also go down or plunge , as they usually are moving in tandem,(except for the rate of decline: in early may).thanks

    ReplyDelete
  19. ABQJuly 8, 2011 at 7:08 AM

    Shorted silver this morning via ZSL:
    http://screencast.com/t/TWmsmFMX7r

    ReplyDelete
  20. SCJuly 8, 2011 at 7:13 AM

    Silver crashed in May, Gold corrected in May. If I'm right soon everyone will be talking about the Gold crash.

    I've looked at percentages and the Silver short still looks the same or slightly better downside % to me compared to Gold. So even though most will talk of the dramatic Gold crash, I still quite like the Silver.

    Time will soon tell if I'm on the right track...

    ReplyDelete
  21. SCJuly 8, 2011 at 7:16 AM

    I've certainly gone on a wrong tangent before lol!

    ReplyDelete
  22. SCJuly 8, 2011 at 7:30 AM

    Covered some SPX shorts near 1335 was overweight yesterday. Back to a normal (still heavy) short.

    ReplyDelete
  23. ABQJuly 8, 2011 at 7:53 AM

    Took 1/2 off @ TL resistance. /SI could still pop to 37.30'ish to complete the pennant.
    http://screencast.com/t/TSCLZrAz0

    ReplyDelete
  24. SCJuly 8, 2011 at 8:03 AM

    Nice charts ABQ thx.

    ReplyDelete
  25. BlakeJuly 8, 2011 at 8:08 AM

    I really am horribly confused by the action on all time frames right now! I should really be sitting on the sidelines waiting for the picture to clear up.

    ReplyDelete
  26. BlakeJuly 8, 2011 at 10:55 AM

    could this be the start of the decline for silver SC?

    ReplyDelete
  27. ABQJuly 8, 2011 at 10:55 AM

    These fractals are almost identical in price (and time).HWB mark on current coincides with your SPX price target. http://screencast.com/t/W3R20ZWq

    ReplyDelete
  28. SCJuly 8, 2011 at 11:05 AM

    It feels like it should be close Blake, but difficult to say for certain whether it has started.

    ReplyDelete
  29. RogerJuly 8, 2011 at 11:09 AM

    SC. Do you mean silver is close to decline or people should consider to close their short?

    ReplyDelete
  30. SCJuly 8, 2011 at 11:22 AM

    It "feels" as if Silver is close to starting it's descent. Yet it's a waiting game for now.

    ReplyDelete
  31. SCJuly 8, 2011 at 11:25 AM

    I'll have charts coming for Gold and Silver this weekend.

    ReplyDelete
  32. SqwiiJuly 9, 2011 at 5:53 AM

    SC - I have a fib date for a bottom late next week , possible Thursday or Friday - which means markets should decline hard with some panic next week if I'm right.

    The VIX looks like ready to explode higher.

    The dollar looks like about to break a 1 year downtrend line next week ! If so - dollar is going to make a MAJOR move to the upside - which would most likely lead markets down very hard next week.

    I dont know what the trigger will be - but chart looks like that to me - take a look at this chart too
    http://chart.ly/uploads/stream_yd5a5dx.png?1310144939

    Overall - Monday might be a minor gap up , but I think later next week we will see some panic and hard selling in markets.

    ReplyDelete
  33. SCJuly 9, 2011 at 10:48 AM

    Thanks Chris. As far as cycles are concerned, Bears have the upper hand in coming weeks. I see it being very choppy with a hard dive to finish the move.

    ReplyDelete
  34. TomJuly 9, 2011 at 10:53 AM

    Sqwii, I would like nothing more than to see your prediction come true, but what would drive stock prices lower and the dollar higher? Bullish sentiment is nowhere near an extreme yet, and the wave patterns suggest the 1370 top will be challenged soon. The dollar looks like it is consolidating before another move lower, not higher. We shall see.

    ReplyDelete
  35. TimerJuly 10, 2011 at 2:53 AM

    HI SC,

    Do you see a scenario for SP500 to drop to 25 Jul, rebound to 1st week of Aug and then a severe drop into early Sep. Which will then be followed by a strong bound to new high for 2011 ?

    Tay

    ReplyDelete
  36. SCJuly 10, 2011 at 8:02 AM

    Hi Timer,

    I've been showing things one step at a time. Bears have control for the next few weeks (at a minimum) from what I see with a panic selloff to finish the move.

    Bulls will then take control again in a big way. Another power rally setting up later in the summer in my opinion.

    ReplyDelete

Subscribe to: Post Comments (Atom)