Trendline channel is still intact - you will need take it out with some consecutive closes taking it out with a series of lower highs. We could be getting there, but not yet. You don't call macro-economic tops and corrections with intraday charts, shooters. And Ammo can't post a line chart dating back 100 years where a 25% move in the market won't even register. Use the Daily and Weekly timeframes.
How S&P Responds to 1275 Is Huge Market âTellâ Published: Tuesday, 1 Mar 2011 | 6:37 PM ET Text Size By: Lee Brodie The Dow [.DJIA 12058.02 -168.32 (-1.38%) ] suffered a triple digit sell off Tuesday and the S&P [.SPX 1306.33 -20.89 (-1.57%) ] closed sharply lower with investors running for the exits after crude hit $100 and comments from Ben Bernanke sparked inflation concerns. Demonstrations overseas sent oil prices [CLCV1 100.26 0.63 (+0.63%) ] surging with varying degrees of violence reported in Libya, Yemen, Bahrain, Oman, Iran and Iraq. Investors now worry that oil workers in some of these nations may strike. Meanwhile, in testimony before Congress, Ben Bernanke showed little concern about the move in oil, and again called the risk of inflation âmodest.' The Street largely took his comments to mean the recent spike in oil and other commodities will not lead to a broad policy response from the Fed, at least for now. In other words the Fed had no plans to aggressively fight inflation by raising rates. How should you position now? What should you be watching? S&P 500 Index (.SPX) 1306.33 -20.89 (-1.57%%) INDEX Instant Insights with the Fast Money traders Considering these developments, Guy Adami is concerned that a sell-off may be brewing. âIâm not sure 1300 holds,â he says. And if the S&P tests 1275 it could be a huge market tell. â1275 was resistance on the way up late last year and support on the way down earlier this year. If we test that level, what happens will be telling.â Mary Ann Bartels, Bank of America Merrill Lynch head of U.S. Technical Analysis largely agrees. She tells us 1270 is her key level on the S&P. And if we breech 1270 then weâre looking at 1220 to 1170, she counsels. "We'll be in for a deeper correction," she says. Pete Najarian is also growing skeptical of the rally. He points to the Vix [VIX 21.01 2.66 (+14.5%) ] which closed above 21. âThatâs a huge concern,â he says "And when oil ticks above $99 people start to panic," he adds. âOil can flicker above $100 and we can handle it,â he says, but Najarian needs to see oil really pullback before he can feel bullish. Joe Terranova thinks the next big move has everything to do with oil. âThe market is extremely sensitive to it right now,â he says. In other words, he expects an almost inverse correlation between the price action in crude and that of the S&P. As one goes higher the other likely goes lower. Tim Seymour is focused on the negative action in energy stocks [XLE 77.07 -1.47 (-1.87%) ] despite the stead climb in WTI. He finds the divergence notable. Terranova isnât bothered by the divergence. He says "stay long energy equity names.â
first bounce off trendline worked. Now on the second attempt we are under it according to your chart so why is it still intact ?
"first bounce off trendline worked. Now on the second attempt we are under it according to your chart so why is it still intact ?" No, we need to take it out with successive daily closes and make some lower lows and lower highs. Then you have the technical right to call it a top. Look at November 15 - 29 - your arguement held water there as well. Smart money does not time an absolute top - you get short with some technical price action confirmation. I would agree completely that the past few days look wobbly, but let's put in the lower lows and lower highs first.
"The very overdue Wile E. Coyote correction should start soon." oh yeah, it's wile [sic] all around today! or maybe you meant when the coyote straps the rocket on his back and launches himself into orbit - thats what stocks appear to be doing. congrats to all who BTFD.
Trend Channel still intact. This is why smart money does not time markets, but waits for technical price action confirmation. An experienced trader looking to capture a sustained move would much rather sell 1280 instead of 1340. Think about that.