The Monthly S&P Futures chart has a trend line from the September 2000 highs to the March 2002 highs to todays high. For a long-term punt, be short the June S&P with a stop above today.s high of 923.70. The 50% retracement of this 7 week 136 handle rally is 68 handles of reward. 8-10 handle risk. I like the Risk/Reward ratio.
A contrarian indicator, the VIX is starting to approach 20, a sure sign of bullish complacency. A short if it dips under 20 (the top), followed by a volatility increase above 20 (confirmed by another indicator of your choice).
I like the short trade with 925 being a stop, but we have to see slowdown of momentum before we'll see a 68 point decline in the S&P's
They had a look at the 920's, with 921.50 being the high. My friend was adding on to a 919.00 short, with sales at 922.00. We had sell points at 919.00, 922.00 and 926.00, with buy levels at 914.25 and 911.00. The 911's worked nicely in the morning and the 914.25 held as support twice later in the day. My friend is short overnight looking for a 10+ handle lead to run them into Unemployment. DO NOT UNDERESTIMATE THE POWER OF THE BEAR. The bear can undo in 7 days what it took 7 weeks to achieve.
Risk less, I have traded US Treasury Bond futures for 20 years, six of those years live in the pits of the London International Financial Futures Exchange. In 1985 the Bond had a similar chart formation than what have at the moment. If history repeats itself, the 135 handle is my long-term objective. The last 7-8 points will come pretty quick. Do not miss this move. There are many non-believers out there.
One noteable thing. The S&P rally has been on low to average volume at best. Open interest should be increasing everyday which it has not. We should be seeing huge volume as we are making new highs. This leads me to believe the rally will not last. We also have a rising wedge formation, if broken and sustained we will see 787.50. TraitorJDM
Long live the Rising Wedge and long live technical analysis. Remember, it is not a profit until you take it.