Moonshot Starts Today: 9/29/05

Discussion in 'Trading' started by Apex Capital, Sep 29, 2005.

  1. The SPX is in a 3-2-5 pattern and just completed the 3 and the 2 portion and has now begun an UPWARD 5 DAY SEQUENCE signaled by today's action.

    The expectation is for a rally to unfold to test two key levels on the charts. This first key level is the previous high at 1237.95 and second point is the high at 1245.86. A close above the 1245.86 level will signal a minimum rally toward the 1315 level over the next two to three months.

    Also, Friday is a weekly and monthly close suggesting that if the market closes above the 1230.70 level today it will set the tone for a strong rally for the balance of the year and into the first quarter of next year. The minimum positive close for today is the 1225.35 level and a close over 1230.70 will be very bullish for the weeks to come. Expect higher prices for the next several days.

    The A-B-C correction is complete.
    Time to rock to the upside in the next impulse sequence.

    The AAI sentiment poll adds fuel to the fire - - - with Bears now outnumbering Bulls by 39.1% to 31.9% whereas just one week previous the numbers were nearly reversed, at 32.5% Bears to $39.5% Bulls.

    Don't fight the tape.
    The TREND is your FRIEND!

  2. Apex, I think you're right. It fits the technical pattern perfect. We'll just have to see where it goes.

    Good trading to all.
  3. Sashe


    Would you care to give an approximate projection for your upside leg? I did some TA on $RUT and came up with 700sh
  4. doublea


    What is the AAI sentiment poll and where can I get the info. Thanks.
  5. balda


    one more day to the end of the quarter

    window dressing anyone?
  6. its the CHRISTMAS HOLIDAY RALLY. its been happening every year for the past few years now.
  7. Amnesiac


    That's right, but it usually doesn't start until mid-october. There is often another significant downmove between the window-dressing-end-of-quarter upmove in September and the end-of-year rally.
  8. good analysis...

    what is funny is I receive a newsletter via email..... and this guy who was a very successful options trader on CBOE for many years is expecting a meaningful downside move based upon fib levels. Of course he has been wrong now for two straight days.


    p.s. I think we have a moderate sell off next week.


    "The stock market gave way last week as Hurricane Rita moved towards Texas coastline. The price of oil rocketed upwards over $4 last Tuesday, for its biggest daily gain ever. However, as landfall neared, the dangerous storm was downgraded from a category five down to four and then to a still dangerous category three when it finally hit early Saturday morning. Once it appeared that the oil refineries that dot he Texas coastline may avoid destruction, as the hurricane lost intensity and turned northward, oil retreated and the stock market feebly bounced. We spent the week moving from CNBC to the Weather Channel to satellite images on the internet, trading as the markets moved with each of Rita’s wobbles. The result was around a 2% loss for the stock market. As the second intense hurricane cut through the gulf in less than a month, it also seemed to cut the heart out of the bulls. Hurricane season lasts into November.

    The FOMC met last week. As we expected, Greenspan and company raised rates for the 11th straight time. What is truly bizarre is that they continue to talk down inflation and then act as if it were a problem. It’s like what Alan does about the housing bubble, which he denies exists and continues to warn about. The treasury market responded to the increase in short-term rates with its now typical snub. That contrary trading, however, was more a factor of the huge jump in the price of oil, that day, than the Fed action. Now that Rita has passed, traders in notes and bonds will focus on the ever increasing expectations for inflation. Our work has a major top in place in the long-term treasury market. December 30-year bonds are trading around 115. We expect them to trade below 109 by year's end, bringing much higher long-term rates into early next year.

    Technical Read: The stock markets decline last week broke through a series of support levels, warning that a decline of greater proportion could be close. Over the past few months, we have been showing the formation of a “megaphone top” pattern the in S&P 500 index. As we moved close to the upper end of that pattern following Hurricane Katrina, the market retreated sharply again. Notice on the weekly chart below the formation of an “evening star” as the market tried to make a new high. This very bearish chart pattern is certainly a warning that sellers have returned.

    One different look at the long-term picture of the entire three-year bull market can be seen on the monthly chart of the S&P 500 below. If you’re a believer in “Elliot Wave”, it sure looks like there is trouble ahead. Notice the clear five waves, with the last peak coming just below the major 61.8% Fibonacci retracement level. What would follow would be and “ABC” bear market. The “A” and “C” waves are large declines, with the middle “B” wave bringing an upside bounce.

    Now look at the daily chart of the S&P 500. You’ll notice that the bounce that came last Thursday afternoon touched the neckline of a broad “head and shoulders’ top formation. If this index were to break below last week’s low at 1205, the measurement of the pattern (distance from neckline to peak) would take it down a minimum of another 50 points or to 1155. Our target for the first wave has been around 1138. Could this be it? As illustrated here, the big technical picture is quite negative. It is part of the reason why we have believed that the upside is very limited, with a major decline lying just ahead.

    In the short-term, there is upside resistance in the S&P 500 in the 1222-1225 zone, which should hold a relief bounce after the passing of Rita.

    Breadth figures were very negative last week, especially on Wednesday. This pushed the cumulative advance/decline line below the low made a few weeks ago; suggesting selling has increased throughout the broad list of stocks."
  9. another bs thread, who cares what the mkt is going to do. just go with what it is doing, thats the hard theing. not posting "see i told you so posts"

    happy trading to all.
  10. hello Pot meet Kettle.


    #10     Sep 30, 2005