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Bounce of 2018 intra low - SPX 2490 or 2660


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#1 dTraderB

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Posted 17 December 2018 - 08:35 PM

Weekly chart below to give a longer perspective of where we are now in the context of 2018.

 

SPX bounced off the 2530 intraday low made earlier this year and finished about half a % higher with a few more follow-up S&P Futures points in Globex session

 

There are two likely paths from here:  bounce to SPX 2660 or drop to SPX 2490 and if this does not hold, to SPX 2420

 

With the extreme negative sentiment and widespread bearishness, desperate calls to the FED, even talk of no hike on Wednesday, I am looking for a bounce to at least 2590 and then....will that be sold or bulls will pile in?

 

I would prefer a  retest of the SPX 2018 intraday low at 2530 and then see how the market behaves there, with a possible spike down to 2490. But that will be too good to me and allow me to load up on more Calls so it will not happen in 2018. 

 

BUt...in 2019

 

Again, I will not be surprised to see SPX 2720 when the market closes at the end of 2018.

 

spxdd17.jpg



#2 dTraderB

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Posted 17 December 2018 - 08:36 PM

Subject line should be "Bounce off" instead of "Bounce of"



#3 dTraderB

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Posted 17 December 2018 - 08:39 PM

  1. I am going to go out on a limb and guess that the Fed does not hike Wednesday. Markets around the world, from rates to equities, are telling them not to. Jerome is a former private equity exec, hasn’t been cosseted in an economics department library for the last twenty years.

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  2.  

    Downtown Josh Brown Retweeted Eddy Elfenbein

    2532 is the February low. A false breakdown below could be a lot of fun...



#4 dTraderB

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Posted 17 December 2018 - 08:47 PM

Keith McCulloughVerified account @KeithMcCullough
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Keith McCullough Retweeted Brian Wesbury

Bond King was bearish on stocks because he was bearish on bonds

Keith McCullough added,

Brian WesburyVerified account @wesbury
If a bond guy can trash the US stock market, the bottom is in, or close to it.
5:17 PM - 17 Dec 2018


#5 dTraderB

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Posted 17 December 2018 - 09:43 PM

"...Currently, while I had wanted to see a larger rally take us above 2800 before we saw a bigger decline in the market, we are seeing signs that the rally to 2815 may have been all we see. Market resistance is now at 2635-55, followed by 2720. Unless the market can exceed those levels, and soon, we actually have a set up in place now to drop below the 2400-50 support I had wanted to see hold before a bigger rally takes hold. And, if this pattern triggers in the coming weeks, it will “feel” like a crash to many as we enter 2019...."

 

AVI GILBERT



#6 dTraderB

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Posted 17 December 2018 - 09:45 PM

The Final Plunge Ahead

When we combine the deteriorating investor sentiment profile toward the bank stocks with that of the overall broad market, it provides an even bigger possibility for a sharp plunge in the major averages to be followed by an equally sharp recoil rally. Sentiment as measured by the American Association of Individual Investors (AAII) provides one such clue that investor psychology is ripe for a short-term trend reversal.

Only one important indication that sentiment has reached the capitulation stage has been missing lately. I’m referring to the lack of a sharp spike in fear as measured by the popular volatility gauges. My favorite fear gauge, the CBOE S&P 100 Volatility Index (VXO), measured the volatility of large cap stocks and has been surprisingly subdued since its initial rise in October. Notice that investor fear as reflected by the VXO is nowhere near as high as it was during the early February market decline. Accordingly, we should witness a final spike higher in VXO in the next few days to let us know the final correction bottom has been established. Given how investor sentiment has rapidly worsened since last week, we can reasonably expect to see a volatility spike in the coming week.

973376-15448215105525036.png

 

Source: BigCharts

A final consideration which points to the end being near to the selling pressure is the oversold nature of this market. As measured by the 20-day price oscillator for the S&P 500 Index, the stock market is fast reaching a sold out condition and is technically vulnerable to a "bull raid." As of Dec. 14, the 20-day oscillator has reached one of its lowest (and most oversold) levels of the past year. What's more, this important gauge of the stock market's near-term internal condition has established a series of higher lows in recent weeks (see arrow below). This is in contrast to the lower lows recently made by the S&P 500 Index and is a positive technical divergence. Internal divergences like this one often occur immediately prior to market bottoms.

973376-15448257506505332.png

Source: WSJ

Until the final low is confirmed, investors should remain on the defensive as the stock market’s short-term technical profile is still very weak. For this reason I don’t recommend initiating any new long positions in stocks and ETFs right now. However, I anticipate that the latest global market-related fears will soon pass and that equity prices will then resume their upward path. On a strategic note, investors can maintain longer-term investment positions to the stock market via ETFs and outperforming individual stocks in strong sectors. 



#7 dTraderB

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Posted 18 December 2018 - 08:14 PM

What a day! 

Daytrading NQ Futires and SPY options, swinging wildly.

 



#8 dTraderB

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Posted 19 December 2018 - 03:18 PM

Powell killed the rally! 

 

SPX 2490 tested and market bounced off

 

But, 2490 and 2420 are valid targets now