If you believe the idea that:
1 - Institutions are sitting on the sidelines
2 - GS is running the market (check out recent Zero Hedge articles)
3 - We need VOLUME to get over the resistances at 875 and 888
Then take a look at the SPY chart on the 60 minute, or even better, 178 minute, and you'll see what's happening.
Each time we hit a resistance top, they (GS) drop it back down to support, and then bring everyone around (day traders, swing traders, program traders, etc.) and shoot for another top. Everyone piles on and we hit a new high.
T4D and I were having a discussion and we are in agreement that there's a SPY channel and gap around 861 that needs to fill first. High odds, as he likes to say. This will involve some retracement for FAS.
Here's the take:
The GS trading desk is running this market...........I am 90% sure of it. When they want to make a big move up they bring it down to strong support and do a hard reversal. They do this because then they have the day traders, program trading, short covering and swingers on the ride helping the push upwards.
That combination is how they will bring the Big volume.
We have not seen this yet.
In my analysis I weigh heavily on this pattern.
This is just me throwing it out there at this point........but its an initial thought:
Mon/Tues they will test MAJOR support lines on Financials and CRE and at some point in time do the reversal.
Once the reversal kicks in they will run it very hard.
I am going on the stress tests being released AH thursday in this analysis.
Wed should in theory be a +20% FAS day.
The tricky part is Friday am because what should happen is a massive GAP up in the AM and then a hard reversal down.
But Friday has more risk in it................high risk high reward.
I think initially that Monday am either we see an open a bit down and pressure or a gap up that quickly fades. So a GAP up short side play has great odds of success.
Thoughts, considerations, flames?
(Because we want to learn!)
I'm with you on the set up for this week except for one item. We have been rallying in shorter time series channels (I see two - 9 days and 8 weeks) but we just hit a longer time series (six months) channel top at 875. This top is drawn from SPX tops in early Nov, Jan and now. The longer time frame trend must be key and take precedence over the shorter time series - that's major resistance.
To move higher, all the technicals will have to be wound down super tight - stochastics, CCI, RSI. 60 minute calculations will not be enough - they will have to be wound down on longer time periods too (don't know about the 178 minute period). Right now, CCI is over 100 and stochastics at 80 on the dailies.
Slight worry also about sector leadership. Financials led the rally but they have been two down weeks. Would seem to portend a possible change in market direction. Or a top.
Just throwing this out for thoughts.
One thing about volume and price. Bear with me a bit here.
If you look at a company that depends on a single announcement, you will see that the volume decreases up as the announcement date approaches. Price fluctuations decrease as well (i.e., volatility decreases).
However, the outcome of the announcement, I have found, is 50/50 upside and downside.
I believe the decreasing volume and price swings in the last week or so is due to the anticipation of the stress test. Basically, people want to delay trading until they find out what the results are.
A year from now FAS/FAZ will be trading at about a buck...The days of making big money here are over and it is now a dead play...anyone thinking that either one will ever reach above $10 again are dreaming. I can picture it now...FAZ at .20 and FAS trading $1.05....Back to the drawing boards for these two ETF's...Last one out of both, please turn out the lights...
that was virtually entire market as far as volume went
last week was a throw away week. now we have to c what
new week holds. spx 838 you'll c it in your 178 window is a primary support zone. important numbers are 1012 838 664 and 417 I REALLY don't know why most wave counters start counts from 1974 but personally we c the 82 to 2007 counts play out over and over again and best i can c that was truly the start of the cyclical bull market imho start to end
check your 178 min channel and c what you c and also notice very close where rifin closed with relation to that mid channel. then check every pivot on every chart for market indexes from highest charts right on down to 1 minute and c what you c. WHEN they all line up almost perfect in every time frame start expecting a change in trend OFTEN a drastic change.
THIS is why i'm bearish on market near term regardless of stress test or gov't chatter. volume tells us no buyers willing up here. tells us shorts are washed out and TELLS us shorts are reluctant to come right back in here SINCE THIS is where they felt max pain.
ALL things line up for the tutes to be the only shorties at start of market corrective wave AS IT SHOULD BE.
The chart looks to me like it is cycling every 3 days or so. The 3 day cycle has a basing phase, rising phase, and a falling phase (then repeat).
The past Friday was a basing phase, so, on Monday, we may hit a rising phase, following by a falling phase on Tuesday. Basing on Wednesday, moving up on Thursday. Falling on Friday again.
Dave, decent read in my opinion. Thanks!
One thing I will point out (specific to the 178 min chart) stochastic...
March 6 big dip
March 22 medium dip
March 30 big dip
April 8 medium dip
April 20 big dip
April 28 medium dip