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#1 CRUISENAL

CRUISENAL

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Posted 29 April 2016 - 03:31 PM

SPX ends the month of April at 2065.31

 

It closed above the monthly 20 SMA for the second consecutive month but well off the monthly high. So since the May 2015 high at 2134, We have had 3 more tries to exceed that high and all have failed, setting up 3 lower highs and 2 lower lows. This still follows both the tops in 2000 and 2008 in similarity. Looked at this a bit deeper and I found that the lower highs and the lower lows have formed a diagonal. In both the 2000 and 2008 tops, price finally broke down after the second lower low and ended up intra month below the lower diagonal line. That projects where we possibly go now. Target is the 1700-1750 area by mid June. I never thought we would get to 2111 but sure enough the market had other ideas than mine. So I am basing this target on the past periods where after setting a High, the market pulled back, setting a lower low, bounced to resistance and then declined to the lower boundary of the lower diagonal line within 2 months of the retracement high. And this would be a very sharp drop of some 360 to 400 SPX points or -17% to -20%. If this happens I doubt that will be the end of the decline longer term, short term yes. This is all based on IF the price can fall below 2035 where the monthly 20 SMA is and hold that at the end of May. Based on current market action, I feel this is likely. But we will see what Mr. Market says. 

 

I am off next week on a southern Caribbean cruise for 8 days. Have a great week!