Jump to content



Photo

An Epic Bounce....or another dud?


  • Please log in to reply
34 replies to this topic

#1 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 5,422 posts

Posted 04 January 2019 - 06:38 AM

Ok, let's be real: this market is a sick puppy, and will be so for most of 2019, unless there is a vast improvement in the political environment & conduct of negotiations etc.

 

Fundamentals are still fairly strong, the FED will back off the hike plan with dovish cooing today from Powell, and the Shutdown & Trade Talks are all artificial problems that can be solved in a day or two or three.

 

However, the market has been spooked with fear and panic permeating almost every market in the world.

 

There has been a complex bottoming process since the December low. In terms of my TA analysis, the market will go up unless that low is taken out. Also, the bad news & instability have already been priced into the markets. 

 

Either the market now bounces 10% or more now or only up to the previous swing hi at SPX 2520 and then back down again to retest that critical December low. 

 

My opinion: EPIC bounce to SPX 2700 or higher

If that fails, SPX 2250/60 will be the next major target if SPX 2350 is taken out.

 

Lower than expected Q4 earnings or warnings will kill this wannabe bounce! 

spkey.png

https://macromon.wor...0-key-levels-5/

 



#2 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 5,422 posts

Posted 04 January 2019 - 06:44 AM

4 trading days only in 2019 and I am already tired but am not complaining because I prefer this type of market action instead of dull low volatility.

 

Got to rest this weekend. 

 

NFP report and Powell are the headliners today.

 

They will run Powell out of town if he displays any hint of hawkishness. 

 

Most likely, they will spin the NFP report as bullish.

 

Bear or Bull, you must be SUPER ALERT in this market environment. 

 

"The logical short-term trade here is to bet on a test of the recent low at 2346.58, 4 percent down from today’s close.  But as we quoted Stan Druckenmiller in our recent post,

“Logical doesn’t mean profitable.” 

Eventually,  and relatively soon, we think the test is a no-brainer, however, tomorrow’s employment data and Jerome Powell speech are events that could generate a bounce.

If the employment data comes in soft but not too soft, coupled with today’s weak ISM gives the Fed Chair the cover to strike an exceedingly dovish tone in his speech tomorrow.  Ergo rally time and the shorts get their Friday facial and should further boost our gold trade.

Moreover, it’s now or never for a bounce.  The chart below shows how rare it is that the S&P500 has closed this far below its 200-day moving average.   In fact, only three times since  August 2011.

If there is no or just a feeble bounce tomorrow, we get shorty the e-minis for the test of the recent low."

Oct%2028.png



#3 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 5,422 posts

Posted 04 January 2019 - 06:46 AM

The DJIA already reached its ideal down side target (21,700, which is where wave 3 or c equals 1.618 x wave 1 or a).

 

The S&P 500 has not yet reached its ideal down side target (2,269, which is where wave 3 or c equals 1.618 x wave 1 or a). However, the S&P bounced from 2,349, where wave 3 or c equals 1.382 x wave 1 or a).  

SPX%20djia%201319.png

 

 

In other words, we are dealing with a measure of conflict:

  • The DJIA already reached it’s down side target, the S&P 500 did not.
  • Sentiment at the December 26 low was extremely compressed, which allows for a larger bounce. 

How do we resolve the conflict?

 

The December 30 Profit Radar Report published the chart below, which illustrates the ideal outcome, along with the following commentary: 

 

The S&P 500 has not reached the 161.8% Fibonacci projection level (2,269), which as a common down side target for waves 3. Unless the S&P closes above Friday’s high (2,520), we assume that we’ll see new lows.”

 

 

 

SPX%201%203%2019.png

 

 

The above path is still in harmony with the outlook published in the October 28, 2018 Profit Radar Report, which projected (yellow lines, chart below) a rally from 2,600 to 2,850 (in October/November) followed by a drop to about 2,400 thereafter. 

https://www.ispyetf.com


Edited by dTraderB, 04 January 2019 - 06:47 AM.


#4 slupert

slupert

    Member

  • Traders-Talk User
  • 1,205 posts

Posted 04 January 2019 - 09:35 AM

  •  
  • Traders-Talk User
  • 2,991 posts

Posted Today, 07:38 AM

"Ok, let's be real: this market is a sick puppy, and will be so for most of 2019"

Little premature?



#5 slupert

slupert

    Member

  • Traders-Talk User
  • 1,205 posts

Posted 04 January 2019 - 09:55 AM

 

  •  
  • Traders-Talk User
  • 2,991 posts

Posted Today, 07:38 AM

"Ok, let's be real: this market is a sick puppy, and will be so for most of 2019"

Little premature?

 

Maybe we approach the resistance on SPX then jump the Creek on Mondays China meeting. (JMHO)



#6 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 5,422 posts

Posted 04 January 2019 - 10:27 AM

Yeah, looks EPIC, so far. 

 

I am on track for a 1000-plus points NQ day, but cutting back from 8-lot positions to 6, except if there is a significant pull-back

 

Will close all of my SPY calls & some QQQ calls but will keep a few QQQs, about 5 



#7 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 5,422 posts

Posted 04 January 2019 - 10:30 AM

 

 

  •  
  • Traders-Talk User
  • 2,991 posts

Posted Today, 07:38 AM

"Ok, let's be real: this market is a sick puppy, and will be so for most of 2019"

Little premature?

 

Maybe we approach the resistance on SPX then jump the Creek on Mondays China meeting. (JMHO)

 

 

Good probability we can but I want to see if if this will be a strong buy-the-dip market as in 2018 or a more cautious approach. 

Many bulls have been hit hard so it could be lots of rallies, back filling, retesting support etc instead of the almost vertical ascent we saw during the past 2 years



#8 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 5,422 posts

Posted 04 January 2019 - 10:31 AM

 

  •  
  • Traders-Talk User
  • 2,991 posts

Posted Today, 07:38 AM

"Ok, let's be real: this market is a sick puppy, and will be so for most of 2019"

Little premature?

 

 

Maybe.



#9 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 5,422 posts

Posted 04 January 2019 - 10:33 AM

Testing the January 2019 SPX high @ 2519, while POWELL is speaking



#10 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 5,422 posts

Posted 04 January 2019 - 10:38 AM

Powell sounding dovishly reasonable for the bulls. Tone has changed, Powell's and that of the market.

 

Stocks surge to highs of day as Fed's Powell regains optionality on the balance sheet. Said if needed, Fed would change balance-sheet runoff policy.

 

#Fed's Powell says he wouldn't resign if president asked him to do.