5 replies to this topic

[thoughtpwr]

From the SPY testing of the Pitchfork's upper band (from the topside) last Thurs & Fri, and the subsequent rally late Fri, we got 1/3 of way to the short term target. Today's gap higher and subsequent consolidation has reached the 2/3 mark at SPY 236.3.  It may finish higher today as it is perfectly capable of reaching the SPY 237.5 target on a strong run late today.  The turn date this week is 2/23 (Thurs), which may be moved up a day on the strong market. It possible that this run will finish over the recent channel upper band with a gap either Wed or Thurs AM.  If we gap lower tomorrow, its likely that we get an OOPS buy signal that leads to a new high on Wed and a gap open on Thurs.

 

I expect a high by Thurs AM and a reversal that gets down close to the last low at SPY 234 by Fri/Mon. There is a major turn date on Mon 2/27, which I would expect to hit by Tues at the latest and this event would then lead to a new high in a choppier manner into April.

 

I am concerned about my metals position over the next two days, as a local low is likely to be made on 2/23 per a cycles schedule. This COULD carry over into the 2/27 date, which is supposed to a GLD high (full moon), but these dates have not worked out as tops over the last couple of months as the SLV/GLD rally has carried on. The metals should have clear sailing on a cycle basis after these dates and I will reposition to increase my exposure at that time.  In the meantime, AG reports tomorrow morning and I have added some insurance with 25 puts to cover the three call positions that are under attack in this metal's pullback. SLV is reacting well to the downward pressure as it recovers each of the gaps lower, so that is encouraging.

[thoughtpwr]

Although I have identified a 237.5 target, the actual target I will trade is the upper channel line if it is hit either Wed or Thurs.  The upper band has a 238.7 limit at Wed close.  I look for it to slightly exceed the channel.

[thoughtpwr]

Tricky day, Wed.  Market came down and tested an internal channel trendline in the AM, but then challenged the lower trendline of the channel and broke it twice briefly today after the Fed minutes were read; only to hold into the close.  It finished in the neutral position near that lower trendline and produced a flat day. Clearly, the market can run straight down to the last low tomorrow or it can go higher.  The two successful tests of the trendline puts the odds with the longs tomorrow. With the turn date being theoretically tomorrow, today could have been the turn date, but Feb seasonality is scheduled hang on for another day, so I am letting the positions sit and hopefully let the market grind higher tomorrow.

 

The metals are due to finally end their down turn tomorrow, which seems likely as support levels are just under the market at this point. This still fits with the market making a new high quickly, while the metals make a low, so those two facts constitute most of my rationale at this point.

[thoughtpwr]

Relooking at the channels, it becomes apparent that the top channel has changed based upon how the high was limited in Tues market. It also makes the newer channel lower bound lower, so the discussion above was related to the old channel lower bound that still characterized today's action. This puts a cap on the market for Thurs session more in keeping with my original estimate of 237.5.  At best tomorrow's new channel highs are 237.83 at the open and 238.45 at the close.  It could of course hit both if it does a near linear climb throughout the day. 

Edited by thoughtpwr, 22 February 2017 - 08:56 PM.

[thoughtpwr]

Well after the gap higher, the market sold off to the 326.6-236.8 area again for the 3rd time, the charm.  I think we have to continue higher today and Fri AM as we have gotten a lift from testing the gap.  Still looking for 238, but with the delay, more like 239 although at this point, wouldn't 240 be a real resistance area?

[thoughtpwr]

should proof read:  meant 235.6-235.8 for support area