Monday I wrote 61.8% Retracements are Very Common in Bull markets. If we can rebound from the 06/05/12 lows and add 200 points to the SPX, I am confident we can rebound 35 points from Friday’s lows to retrace at least to the 20 day EMA of 1395, which coincidentally is also an important Fibonacci level. See entire Yahoo News Article. This exit level represents a bearish outlook on the market. See the most likely trading scenario below.
Michigan Sentiment comes out 9:55 ET and usually moves the market. By noon activity will slow down ahead of the holidays. We are buyers of dips but sellers at 1395 to 1400 on the SPX.
RECAP Monday November 20th: “Buy Stocks Sell Bonds Paying Off”
The TLT traded down $1.31 to close at $124.35 and exit from the 11/08 sell signal. The gain was 1.12%. The SPY traded as high as $139.42 just $0.37 shy of our target exit of $139.79. The off-the-chart measurements last Friday produced a strong a buy signal for SPY, DIA, IWM, DVY and a sell signal for long government bonds TLT. We are now nearing exits from several signals.
“Low of Day:” The SPX closed about 2 points higher Monday after printing a lunch hour low of the day of 1377.06. Our bolded support levels were 1380 and 1376. The 1377.06 level provided excellent long entry.
LEVELS Wednesday November 21st: SPX S&P 500 Index:
Key resistance level for S&P 500 (SPX) today November 21st – 1395.94, 1399.81
Key support level for S&P 500 (SPX) today November 21st – 1379.71, 1377
UP 1392.07 1395.94 1397.42 1399.81
DOWN 1387.37 1384.72 1383.54 1382.07 1379.71 1377
SPY – S&P 500 ETF: Level 3 Data Quant Report Buy Signal 11/08: SPY at $138.04 with a revised exit target at the 0-line of $139.79. The 11/08 Selling Pressure Exhaustion carried over last week as Level 3 Data Selling Pressure levels went off-the-charts. Monday’s relief rally took a lot of pressure off the bulls. To sustain this rally the bulls need to hold this rally. The first step is to punch then hold $140.00.
The most likely trading scenario is that we have seen the highs of the year of $148.11.” The series of lower highs and lower lows will most likely continue. We are in the middle of a rebound off the $134.70 low that should take us into the $140 – $142. Unless the fiscal cliff issue is resolved the $140-$142 will most likely break down to retest $134.70 or lower.
TLT – Long Term Bonds: Level 3 Data Quant Report Sell Signal 11/08: TLT at $125.84 with a revised exit target at the 0-line of $124.42. The TLT closed Tuesday at $124.35 thus exiting our trade with a 1.12% profit. The TLT is a mirror image of the SPY. We are now neutral on TLT. The $124.42 is now acting as support. The most likely trading scenario for TLT is to bounce around the 0-line and trade higher to print a new high in the $128 range. The intermediate direction is up.
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