SPX Outlook for Monday 4/28/08

The SPX is mixed... while the monthly candle count trend turned down in March for the first time in 18 years, the daily candle count trend turned back up for the first time since the January lows. That probably opens the door to moving higher, now on Friday, we moved up on lighter volume and that's not a positive sign... not that bad either, because we closed up... in fact the best closing price since the January crash. So as I had forecast on Thursday we did get a lower volume day. That volume should continue low into Monday, unless something else is up. Now on Friday even though the futures were raging on the open, we started the day to the downside... and finished up strongly on lousy volume. Now since I know we're at post crash highs on vapor for volume, I strongly suspect we're going to test lower, even though we made virtually no progress going down on Friday. Now rather than make a forecast, let's leave it at this... Support is at 1379.25, we couldn't get there on light volume on Friday. Since we closed on the high on such suspiciously light volume, it's reasonable to believe we'll consolidate down there 1379-80 minimum... now if we don't and we make another light volume move up , besides the pause at 1402, then the next strong resistance starts at 1409 and truncates at 1411. Now over 1411, we're opening the door on a trading pivot basis to 1424. I don't expect that's in the cards for a lot of reasons, but I'll be looking at volume metrics over any 1411 spike. Also remember the .50R of the move down is 1416, so that could stop any advance... Now Looking at the dark side (some of us are short) in order for the SPX to prove it can go lower it must break the modest target of 1379.25 and the twin supported low structure at 1369.00 ....

I'll be getting fullly loaded on Monday, hoping for a down day, 20 day ramp up to blow some socks off next week. Big rotation with the commodity bust. Other fairy tale stuff coming.

?Well said, but we have no assurance that those who tamper with the market agree that the market should play out its destiny based on supply and demand. THis is not a free market we are participating in. Best, Islander.

True Islander, light volume larceny is what I call it. When we have convicted volume moving into the market, that sharpens up all T.A. for sure. We're not seeing that and haven't seen it in this market since Jan/Feb... so what this is... is a low volume game. That's why I have to be prepared for a big spike (distribution spike) on light volume anytime on Monday, because that's how these moves end... The easiest of all plays for me is a wildly bullish bearish upthrust opening, but that probably won't happen either. Bottom line, I have a strategy either way.... I know what the parameters are for this market has to do for it to prove it can go higher or lower, and that's what I tried to lay out here...

Edited by SemiBizz, 26 April 2008 - 09:12 PM.

OK Semi...no fighting. I really do wanna learn something here. What does "while the monthly candle count trend turned down in March for the first time in 18 years." mean? I'm not trying to bait you, I promise. If "monthly candle count" refers to EW, that explains much of my ignorance. If I don't move forward, I move backwards. Are you willing to help me?

U.F.O.

Are you willing to help me? U.F.O.

What does your silence mean, O' Poster of Great Mystery? U.F.O.

Forget it. Semi. You're not worth kissing this much a$$. Big time. Watch your "6". U.F.O.

Just to throw this out there...I realized this on my run yesterday...

1416 is 50% retracement if you use ATH at 1576.....but there are many of us who believe that move was part of a larger corrective wave meaning the "orthodox" high would be 1556. 50% retrace using that comes in at non other than 1406...

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=10&dy=10&i=p69893462316&a=137444121&r=1629.png

something that's been bothering me about the bear case for SPX is that, according to e-wave, UNLESS it stays below 1406 (end of wave 1), this possibly negates the 5-waves down/wave 4 scenario based on the 1/4 overlap. once it gets past 1406, this clearly opens the door to 1416-1455 (using 1576 as the top), based on a simple A-B-C down count. there are also minor unfilled gaps above 1410, to be dealt with. i still think 1416-1420 will prove to be strong resistance, for a number of reasons including volume structure. however, if volume starts to surge here past 1400-1406, 1455 has to be kept in mind as a reasonable target for "B" before SPX turns back down. this assumes we get past 1406. based on momentum and other indicators, i see at least a pullback to 1460-1470 staying within the rising 30-min channel before spx launches an attack on 1406-1416. not saying we get past 1406, just keeping an open mind to possibilities ...

Edited by beta, 26 April 2008 - 11:32 PM.