Corrections can be two swings and I would not rule out one more dip down, just because the market can :) A dip back to the 61.8fib and the much fabled 1040 area from here means the measured move target lines up with the fib target too but just like when I try to play golf, the ball doesn't always get there as prettily as you would wish.
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That was an impressive rally in S&P. I am still holding my ES short from 1093, but moved stop to break even.
ReplyDeleteYou could well be right and I am talking out of my arse. Just look back to end of May and early June. This is a horrible chop zone we are in. We either break 1040 and go to new lows or we close above 1100 and go to new highs. Bulk of this weeks news is at the end of the week so see if that gives some direction.
ReplyDeleteWatch out for Apple after the close tonight.
Actually, I agree with your bullish analysis. I kept the short open to see how market would react to APPL, but i am now having second thoughts.
ReplyDelete1) Seems like ES is about to break out of descending down trend line. All it has to do is go up by a few handles and that descending line becomes support.
2) This 3 day pull back that we had last week was weak (compared to the 7% rally prior to it). So I am thinking S&P might actually be putting a new higher low at the 50fib level.
I might close out this position tonight or tomorrow, unless we get a massive selloff (which seems unlikely)
It is a hard one to call in this chop zone. I would just be surprised if the market collapsed and made new lows in July.
ReplyDeleteBut we have the EU bank stress tests to look forward to on Friday ... and Bernanke testifying and US home sales and employment numbers on Thursday, bigger news at the end of the week this week.
Nic, I totally agree with your assessment. When the market does what it is not supposed to do, look out! Could see some more chop here, but it looks like the downside was rejected pretty firmly. Ticks did not confirm the recent day's lows.
ReplyDeleteKeep in mind some weird astro stuff coming up ...
ReplyDeletehttp://seekingalpha.com/author/hewitt-heiserman/instablog
Thanks Honeyeater, I love the astrology stuff. I was reading on the weekend about the solar eclipse and what could happen following it(the last one was 15th Jan).
ReplyDeleteHere is a cool blog if you are interested in that stuff: http://www.wallstreetweather.net/