A Test of SPX 1320 Very Likely Tomorrow

SGS is Neutral (as of close of 3/28/2011)
RTS in Cash (Bench Mark)
My LT Portfolio

Both TRAN and RUT put in new 52 week closing highs today.  On SPX daily chart, 13 D-EMA crossed over 50 D-SMA signaling higher prices ahead.  In the very short term, indices are overbought and chances are good that  we see prices consolidate tomorrow.

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Higher Prices Ahead

SGS is Neutral (as of close of 3/28/2011)
RTS in Cash (Bench Mark)
My LT Portfolio

RUT and TRAN are almost at a new 52 week closing high signaling higher prices for all indices in very near future.  I'm looking for a low point to close all open positions in my IT and LT today.  I'm happy to be done with March, what a terrible month.

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SPX Tested 1320 Again

SGS is Neutral (as of close of 3/28/2011)
RTS in Cash (Bench Mark)
My LT Portfolio

SPX tested 1320 for the third day in a row.  A solid close above 1320 would be very bullish.  Barring unfavorable geopolitical news, major indices are on their ways to make new highs soon.

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Testing of Supports at SPX 50 D-SMA and 13 D-EMA Is Likely

SGS is Neutral (as of close of 3/28/2011)
RTS 20110317 Short Portfolio (Bench Mark)
My LT Portfolio

SGS went from Short to Neutral as of close of today.  All open positions in RTS 20110317 Short Portfolio will  be closed (covered) tomorrow at the open.

Download trend lines in weekly charts for all major indices held today and pushed indices back near close.  At this point, SPX very likely will sell off tomorrow and test its 50 D-SMA around 1306 and probably its 13 D-EMA around 1301.  My plan is to close all short positions in my LT and IT at those points.

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A Pull Back For SPX To Test Its 50 D-SMA Is Very Likely

SGS is Short (as of close of 3/16/2010) - SGS will go long unless Market sells off 1% or more tomorrow.
RTS 20110317 Short Portfolio (Bench Mark)
My LT Portfolio

Five major indices I closely follow have now closed above their primary down trend lines on their daily charts.  The up move by RUT is most impressive and signifies that the current correction / price consolidation is near its end.

On their weekly charts however, all five indices are right against their recent primary down trend lines.  I think a pull back, possibly to back test 1300 for SPX is very much in the cards, possibly tomorrow or on Tuesday.  My plan is to close all my short position at SPX 1301.

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Tomorrow - Bears' Last Chance

SGS is Short (as of close of 3/16/2010)
RTS 20110317 Short Portfolio (Bench Mark)
My LT Portfolio

I watch five major indices very closely.  They are TRAN, RUT, NAZ, SPX and DJI.  As of close of today, two have broken their primary down trend lines on their daily charts and closed above them (TRAN and DJI), two are sitting right around their primary down lines (NAS and RUT) and one (SPX) is still trading below its primary down trend line.  There three probable scenarios here to consider:

(Less Likely): "Libya War" rally has legs and will continue.  Indices that are below or on their primary down trend lines will close above them with good volume and breadth tomorrow.  Then, early next week after back testing their primary down trend lines (a good place to close short positions and scale into long positions), they'll continue to go higher.

(Likely): Market starts to go sideways for at least 5 trading days and then sets a direction either up or down.

(More Likely): Market stalls tomorrow and selling starts as early as tomorrow or Monday.  I'm banking on that.

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A Back Test of SPX 50 D-SMA Very Likely (repost)

SGS is Short (as of close of 3/16/2010)
RTS 20110317 Short Portfolio (Bench Mark)
My LT Portfolio

A back test of SPX 50 D-SMA (edited to correct 13 D-EMA to 50 D-SMA) around 1305 is very likely tomorrow.  Another opportunity to add more short positions.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Indecision --- Market Doesn't Know Where US Economy Is Headed

SGS is Short (as of close of 3/16/2010)
RTS 20110317 Short Portfolio (Bench Mark)
My LT Portfolio

SPX was sandwiched by the two immediate trend lines (shown in orange) today. The fight between bulls and bears was a tie, but  bears will get one more crack at dragging indices down tomorrow.  I think they'll get it done.

No one knows where our economy is headed now.  That unknown has brought on a world of confusion and indecision into financial markets causing them to over react to news.  Since I don't see a great deal of good news coming our way in the next few weeks, chances are good that Market would break to the down side any day now.

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Bulls And Bears Will Go At It Again - T-Bones For Bears Tomorrow

SGS is Short (as of close of 3/16/2010)
RTS 20110317 Short Portfolio (Bench Mark)
My LT Portfolio

SPX back tested and closed above its 13 D-EMA today.  It's now sandwiched by two trend lines (in orange) which will force SPX to make up its mind, set a course by breaking through and closing past one of those two lines. My money is on SPX breaking down through its new up trend line and moving lower for a very probable retest of 1250 level.

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Back Testing of SPX 13 D-EMA Likely

SGS is Short (as of close of 3/16/2010)
RTS 20110317 Short Portfolio (Bench Mark)
My LT Portfolio

 

Market very much news driven at this point. "Good news" from Japan / ME / NA could ignite a short covering rally this coming week sending SPX up to back test its 13 D-EMA around mid 1290's.   That would be a good point to open up intermediate and long term short positions imo.  At the same time, "bad news" could accelerate selling and we could see SPX retesting last week's low at 1250.

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Major Indices Price Correction Very Likely Continues Next Week

Although my very long term (quarters to years) outlook for Market is extremely bullish, in the intermediate term (days to weeks) however, I think price consolidation / correction for major indices very likely will continue.

SPX tested its support at 1250 last week and bounced strongly.  That SPX low (1250) most likely will be tested again in the next two weeks. If support at 1250 fails, SPX could test the primary up trend line on its weekly chart at 1200 by mid April.

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Down Trend Price Channel Still Intact

SGS is Short (as of close of 3/16/2010)
RTS 20110317 Short Portfolio (Bench Mark)
My LT Portfolio

The steep down trending price channel (shown in brown) is still intact.  Selling very likely starts again tomorrow.

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Market Oversold, A Rally Is Very Likely Tomorrow

SGS is Short (as of close of 3/16/2010)
RTS 20110317 Short Portfolio

On Thursday 3/17/2011, RTS sells the following 10 stocks short in its RTS 20110317 Short Portfolio at the open.

AKAM  MVRL  CSCO  NEM  BBY  AVP  TEVA  EXPE  MRK FNSR

Market is very much over sold.  Barring breaking news from ME and Japan, SPX could rally viciously (short covering) tomorrow to test the lower channel line of its primary price channel around 1275.

Also today, 13 D-EMA crossed 50 D-SMA (orange circle) on SPX daily chart.  Although that crossing in  itself is bearish and signals more selling to come, but in very near future it's an indication of exhaustion of an aggressive trend (secondary sharply down trending price channel).

The price objective for the symmetric triangle formation downward break out is 1244.   A possible bullish scenario for tomorrow is for SPX to drop down to mid 1240's and then rally back up to close above today's close.  I wouldn't be surprised to see that tomorrow (it's already met on SPX futures tonight).

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A Retest of 50 D-SMA for SPX Is Very Likely

SGS is Neutral (as of close of 3/11/2010)
RTS In Cash

All major indices quickly recovered from their very oversold values shortly after open today.  Barring breaking news from Japan or ME overnight, major indices should continue their rally.  Odds are very good that SPX tests its 50 D-SMA and 13 D-EMA around 1305.   It's hard to say what could happen after that.  Best is to stand aside and let Market set a course for us to follow.

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Bears Are In Charge ..... More Selling Very Likely

SGS is Neutral (as of close of 3/11/2010)
RTS In Cash

More selling very likely is coming our way because:

• All five major indices (NAZ, DJI, SPX, RUT and TRAN) are trading below their 50 D-SMA.
• All five major indices have broken through and back tested their primary up trend lines on their daily charts.
• All five major indices have broken through their up trend lines on their weekly charts.
• All five major indices are now down trending both in their daily and weekly charts.

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Selling Very Likely to Accelerate ... SGS Neutral Now

SGS is Neutral (as of close of 3/11/2010)
RTS 20110103 Long Portfolio

On Monday 3/14/2011, all long positions of RTS 20110103 Long Portfolio will be closed (sold) at the open.

This week SPX broke through and closed below its weekly uptrend line (Secondary Up Trend Line) with relatively heavy volume and bearish breadth.  I believe there is a good chance that selling would accelerate now and if support around mid 1270's does not hold, SPX could sell off to test its Primary Up Trend Line around 1220's.

Friday Market experienced a relief rally and SPX back tested the recent symmetrical triangle price formation on its daily chart. Selling very likely resumes again as Monday is shaping to be a big down day.  If support at lower 1290 does not hold, SPX very likely would tag its lower channel line around mid 1270's.

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It's All About Oil ... Market Looking East to Saudi Arabia

SGS is Long (as of close of 12/1/2010)
RTS 20110103 Long Portfolio

Today, SPX, RUT and NAZ joined TRAN and closed below their 50 D-SMA with heavy volume and lousy breath.  That's no joke.  Additionally SPX broke solidly and heavily through its symmetric triangle price formation hence confirming a very probable drop to a price objective of 1244.

Too much blood has been let out now. It'll take some time for the raging big bull to get back on its feet and push the market up again. My guess is about a month of a downward consolidation move for all indices.

As for tomorrow, if things get ugly over night in Saudi Arabia, then a drop to lower channel line around SPX 1277 is very likely.  Otherwise, there is a good chance we see a relief rally to back test SPX 50 D-SMA around 1300.

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Bears and Bulls Will Go At Again Tomorrow - Bears Likely Winners

SGS is Long (as of close of 12/1/2010)
RTS 20110103 Long Portfolio

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Once Again The Fight Is On Tomorrow - Odds Are With Bears This Time

SGS is Long (as of close of 12/1/2010)
RTS 20110103 Long Portfolio

Chances are good that SPX breaks down through the symetric triangle price formation (break through thick red line support) and test its 50 D-SMA.

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Market Signals More Selling In Near Future

SGS is Long (as of close of 12/1/2010)
RTS 20110103 Long Portfolio

A close below symmetrical triangle price formation (below 1310) signals more selling for SPX in the near future.  SPX is set now to test its 50 D-SMA.  If that support fails, my analysis predicts SPX at mid 1240's by mid to late April.

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SPX Price Consolidation Very Likely Continues

SGS is Long (as of close of 12/1/2010)
RTS 20110103 Long Portfolio

Most immediate support for SPX is its 13 D-EMA around 1320.  The next level support is the up trend line connecting lows of 2/24 and 3/2 (think red line) around 1310.  A close below that support would make a test of 50 D-SMA almost a certainty sometime this week, possibly as early as Tuesday.

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SPX Weekly Golden Cross Imminent - Market Entering A Short Consolidation Phase

The bull market that started in early March 2009 will very likely continue for at least another 12 to 15 months. We're probably at the 2/3 point of this powerful run; and before this is all done odds are good that we see SPX in lower 1800's.

Like every bull market before it, there has been and will be short periods of consolidation when Market needs to stop, retrace and undergo a healthy correction.  Those consolidation / correction periods can be short or long depending on what has just taken place or about to take place.  For a bullish event, successfully crossing 200 W-SMA in late October 2010 for example, SPX corrected a few percent in a few weeks.  For a bearish event, failing to cross 200 W-SMA in late April 2010, SPX underwent a 10 month 15% correction as a punishment.

 

 As show on the chart above, SPX is about to experience one of the most bullish events: A Golden Cross on its weekly chart.  Accompanying this most bullish event, there would be a short consolidation / correction period.  I believe that consolidation period has started for SPX.  I believe SPX continues to correct for a brief period until mid to late April when SPX would successfully test its primary uptrend line on its weekly chart at or around 1250 before resuming its rally once again.

Important Note: A heavy, solid and confirmed close above SPX recent high of 1344 signifies the end of current consolidation / correction phase.

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A Retest of 50 D-SMA for SPX Is Still In The Cards

SGS is Long (as of close of 12/1/2010)
RTS 20110103 Long Portfolio

During the recent decline, all major indices except for SPX and DJI successfully tested their 50 D-SMA.  Although the same tests are not necessary for SPX and DJI in order for the bull run to continue, but it would have been nice if that had happened today.

Today, a combination of good initial claims data and short covering pushed all indices substantially higher right from the get go.  Looking at the SPX recent price pattern, I'm not sure if SPX broke out of a symmetrical triangle formation (a continuation pattern) and it's on its way to set new highs, or what we see is a bear flag pattern warning of a sell off in coming days.  Chances are that it is a bear flag; and odds are good for a major sell off down to 50 D-SMA around mid 1290's starting tomorrow.  If that's the case and a sell off starts, Market is predicting a news shock coming our way this weekend.

If Market rallies tomorrow and sets new highs in at least one or two indices, we're in clear and the bull leg that started on September 1, 2010 should continue.

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Once Again The Fight Is On Tomorrow - Bulls Very Likely Winners Again

SGS is Long (as of close of 12/1/2010)
RTS 20110103 Long Portfolio

The Positives: 

• All major indices expect for TRAN are still above their 50 D-SMA.
• Average and even below average volume on down days.
• Number of new lows not expanding on NYSE or NASDAQ on down days.
• No panic selling of large or small caps on down days.

The Negatives:

• TRAN below its 50 D-SMA for 7 trading days now.
• Bear flags on major US and world indices.
• Oil above $100 and unrest in ME.

Tomorrow Bears will try to take SPX down below its 50 D-SMA (currently around 1294).   Chances are good that side money comes in and buys that dip, I know I would.

Tomorrow will be either a huge up day or a huge down day.  Best scenario is a moderate sell off to SPX 1294 initially, then finishing up with a big rally and closing above SPX 13 D-EMA (1317) with good volume.  I think Bulls will get their wish.

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Tomorrow, Wednesday, A Crtitical Day

SGS is Long (as of close of 12/1/2010)
RTS 20110103 Long Portfolio

Today was not a good day for the bulls.  Tomorrow, there is a good chance for SPX to drop down to test its 50 D-SMA around lower 1290's.   I fully expect SPX to bounce off of its 50 D-SMA and close above 1300 which would be very bullish.

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