6 replies to this topic

[hedgehawk]

I believe the real bottom will not be in until we pass through the 50 SMA convincingly on S&P which is the 1513 zone. I am looking for the S&P to float up to the 1500 zone on these numbers that everyone is poking holes through ie A/D and NHNLs........then we stall out at options expiration. We make lower highs.........and then make news lows to test 12700 on the DOW and 1380 on the S&P. I believe that the smart money is taking the market up a bit here so they can get properly positioned for the next move lower. I came up with this scenerio by reading all of your posts, then allowing myself to think like a felon. Appears to me that folks that are late to the party that are buying now, are the bag holders who will get their heads chopped off. The calls for the market to make new highs are premature until we break through the 50 SMAs on the major indexes in convincing fashion. I suppose I will go long once either we hit 1380 zone or clear 1510 based on my logic.

[vitaminm]

SPX 60min buy R@1485

[arbman]

Good point Hawk... What should happen tomorrow is actually pretty simple. The market will probably squeeze the last bear and suck in everyone tomorrow, then, start to drift lower first later this week and then accelerate into the expirations. The reason is also technically very simple. There were too many new lows today again and the institutions will not buy these stocks before they see the lows retested and they can push the large caps only so far without a broad participation. So, every time the market makes a low with more new lows, these lows will have to be retested, if they make even more new lows, it will take longer and perhaps lower prices too. I think the Fed rally is widely expected, it should be and it will not sell off too. It will actually rally, the shorts did not cover today, the equity P/C was high even in the last hour. So, rally tomorrow and perhaps a bit on Wed, then watch what happens. Bears are cheering up, but they can't even put together two down days in a row again despite Friday's dismal action. My overall system gave 62% up probability for tomorrow. The April 2005 lows are a very good example of what might happen for the IT, a lot of volatility. Similarly, the spring of 2004 is also another example. There is not enough money out there to push higher convincingly, even if the market wants to rally, it will be very hard to break the trading range for a while. I think a sustainable rally will begin once the last low comes in with less than 200 new lows... - kisa

[GOOSE2]

My advice quit thinking or guessing what you think the market will do and trade price. Above all, current price is King.

[beta]

The calls for the market to make new highs are premature until we break through the 50 SMAs on the major indexes in convincing fashion.

I suppose I will go long once either we hit 1380 zone or clear 1510 based on my logic.

Only problem is because 1510 is an "obvious" target (50 SMA), they may walk it up right to that line before it plunges/retests today's LOD. Im playing long up to SPX 1495, my upside target since last week.

Today's close was just above the key pivot SPX 1465. So far, we've swung 38 points below that pivot; now looking for a counter-swing to 1503 based on volume + momentum + price action.

The above remains in force only IF SPX remains above 1452, the next key support below. Confirmation of SPX 1503 target comes into play above 1472 (then stop moves up to 1465, etc.)

Also, we saw alot of sector rotation today, with financials/brokers up big and gold/commodities/energy groups being sold.

Bottom line: We are no longer in a trending market, but an oscillating one, and the trading range is opening up.

Instead of waiting for The Bottom or The Top (which could take days or weeks), my advice is to play both directions and take profits quickly. Huge swings allow ANY DIRECTIONAL TRADE to be profitable, if you identify a range and focus on your entry/exit targets.

Edited by beta, 06 August 2007 - 10:43 PM.

[esther231]

<<Bottom line: We are no longer in a trending market, but an oscillating one, and the trading range is opening up. >> Thank heaven. I'm terrible at trading strong trends. Much happier in trading ranges.

[hedgehawk]

Thanks for the feedback folks, I agree with all your points. Agree that there is money to be made now.