Wow, did I write that a month ago?!? Need I say more. The strength of this market on a breakout is absolutely puny. If strength doesn't show up soon, well... Reuters Stocks gain as oil drops Monday February 27, 4:40 pm ET By Vivianne Rodrigues NEW YORK (Reuters) - U.S. stocks rose on Monday, pushing the Standard & Poor's 500 index to its highest in more than 4 1/2 years"
That's a breakaway gap folks. Unfettered selling. The worst is yet to come. The next wave is typically even worse as those still waiting for the "New 4 1/2 yr High" rally to resume come unglued and puke. But I would expect an inside day followed by a shallow up day with a quick morning short squeeze to attract more favorable prices to sell. JMHO
A couple of comments are in order to clarify my thinking and then talk about the current action in the Stock Index Futures (SIF'S). My 1310 target (of which the window has passed as to current relevence although it could certainly come back into importance) was made with the thought that many would take advantage of the breakout volume with penetration of an important multi-year upside pivot to liquidate into the volume. The fact that we lost the momentum before we even got there was certainly ominous. However the buy the dip thinking is still strong as witnessed by the immediate rally following and substantial sell-off. The market has been strong and rallying in spite of many overriding concerns and the DAX for instance has been on a big bull run. The action here in the SPOOS is notable for the back and forth between pivots as buyers are afraid to buy the new highs and yet sellers can't take it down. We are at a very interesting place now IMHO and I suppose exogenous factors will make the call. Remember: Real news trumps everything. Good Luck
The queue was cleared to the 1280 pivot on the globex pre-market open. That's the key level to see held for today. Very unlikely to breakout above 1300. So the pivots are 1300, 1280, 1291.5. If we break 1280 then 1272. There is some volatility. Good Luck
So we hit both weekly pivots TODAY. Pretty unusual. Yeah, so we were a point short of 1300 and yeah the 1280 was pre-market but just the same we are at a critical juncture and the tell was nobody wanted to hold this hot potato over the weekend, except the shorts above 1291.50. Volatility beats the shit outta 4 point ranges.
Nothings changed. The pivots from last week remain 1273, 1280, 1286, 1291, 1300, and 1310. We await the "Big One." That is, when everybody least expects it a rank sell-off the likes of which we haven't seen in awhile will emerge sooner rather than later. But for now the single prints down to 1280 @ 9:00 am EST shows traders are everwilling to step up to the plate and buy the dips. I still maintain that a breakout above 1300 is in the works but a loss of momentum thereafter will set us up for the rolling several month bear market. This is only my gut feeling and you need to know your time frame as shorting a bull market that keeps climbing is painful to say the least. No charts. Good Luck
So as the attached chart shows we nailed three of the weekly pivots today. Market rallied overnight into 1291 sold off into 1286 then in the afternoon broke down below our 1280 pivot. At that time however selling for the DAY was enough with greater than average range for both Fri. 3/3 and today 3/6. Looks like the critical support at 1280 has been breached and now we look forward to lower prices.