A ultra dovish FED guarantees a July rate cut, at least 25 bps, but all the SPX can do is rally above the 3K level and then close at 2992
This is a top being formed, either this week or in OPEX next week, but it is a top.
The rate cut is already baked into this market and soon the docus will be on earnings.
Looking for a ST top, then down, and UP into the FED rate-cut day
TIM ORD thinks there will be a slight pullback:
The second window up from the bottom in the above chart is the SPY/VIX ratio. This ratio rises and falls with the SPY. The ratio turned down last Friday (one of the reasons we sold our SPX positions) and today it continued lower, suggesting market could remain weak for the short term. There is an open gap near 294 that could be a downside target. Not looking for a big decline here, just a consolidation that, once completed, could lead to new highs.
Above is a longer-term view for the SPX. The above chart is the three-week average of the “American Association of Individual Investors Bull/Bear Ratio” (third window up from the bottom). When this ratio is below .75, the market is near an intermediate-term low (which was hit in late May). Intermediate-term tops usually don’t form until this ratio reaches above 1.25. The current reading is .99. Next week is options expiration week, which has a bullish bias. It is common for a low to form between Wednesday (tomorrow) to as late as Tuesday during options expiration week. We will be looking for panic and a bullish setup in the coming days, ideally in the gap range near 294 SPY. (Sold SPX 7/5/19 & 2990.41= Gain of 2.50%; Long SPX on 6/25/19 at 2917.38.)
https://stockcharts....uly-9-2019.html
