Is S&P forming intermediate term double top?

[LEAPup]

Quote from fly down:

I saw your thread where you too called for a double top on the same day as me. So far it is a good call.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=209762

Let's see what happens. Gotta say, the bullish setups I scan for have become scarce as of recent...:eek:

I'be been in cash since monday. The short setups I'm finding at the moment don't fit my trading style/personality, so I'll stay on the sidelines until opportunities present themselves. Just gotta trade what you see. Hard to explain, I guess! Lol!

 

[S2007S]

This "PRO" says 1250 before the big decline, which means this is a huge buying opportunity at spx 1180, seems like this is a risk free bet where you can actually mortgage the house and borrow money off your credit cards and buy the SPX and make literally risk free returns.



S&P to Hit 1250 Before 'Big Decline': Pro
Published: Tuesday, 30 Nov 2010 | 12:41 PM ET
Text Size
By: JeeYeon Park
CNBC News Associate



Stocks tumbled Tuesday following disappointing news on the housing front and continuing concerns about the debt crisis in Europe. Mark Tepper, managing partner and co-founder of Strategic Wealth Partners, and Mike Rubino, chief executive of Rubino Financial, shared their insights.

“Although the market is a little weak, it's in a bottoming-out process technically,” Rubino told CNBC.

“We’ll get a bounce up to 1,250 [on the S&P 500] before we really have the big decline that we’ve been expecting for some time.”

Rubino said he likes the dollar long-term, and advised equity investors to stay on the sideline.

“There’s going to be a great trade in the long bond if yields get up to 3 percent, because the economy is still weak—we don’t see any positive going long-term at all.”

In the meantime, Tepper agreed: he is also bullish on the dollar, but bearish on stocks.

“Volatility is high—the VIX is up about 20 percent over the course of past five trading sessions,” he said. “The bulls to bears ratio is just way too bullish right now and that’s a contrarian indicator.”

“We’re seeing the initial levels of support for the S&P at 1,173 and it did a good job bouncing off that yesterday, but should it fall through 1,173, there’s no further support until about 1,130,” he added.

Tepper said his best investment idea is being long the dollar and suggested investors get exposure through UUP [UUP 23.50 0.15 (+0.64%) ], a dollar ETF.

 

[luckyone581]

It is difficult to say that a double top has been formed on the daily and weekly chart as the index closed in April at 1217 and last month at 1226. A difference of 9 points is probably too much to consider as a double top.

Nonetheless, on the monthly chart and considering that yesterday the stock closed lower than last month, a double top does seem more probable as the index closed at 1187 in April and and 1184 last month. The close yesterday at 1181 suggests that a double top could be in place. Of course, all formations do need to be confirmed, which means the index will need to close lower than 1181 at the end of December.

I do believe that what is more important is that a failure signal has been given in both the DOW and the SPX as they both made new 30 month highs in November but both ended up closing in the red.

That is considered a failure to follow through and likely means the indexes are heading lower.

If you look back to 1999 - 2001, you will notice that the DOW generated 5 different high weekly ralies, during that period of time, to 11366, 11750, 11404, 11450, and 11350. When you look at the fact that last month the DOW got up to 11452, it certainly fits in with those highs. In 1999-2001, the minimum drop the following month after the highs were made was 1000 points, which means that it is likely the DOW will drop down to at least the 10400 level in December. There is some support down at 10250, so that would be my guess as to the downside objective.

On a short term basis, the possibility of a rally up to 11258 is high, in fact the index is due to open about 100 points higher this morning and there are quite a few important reports this week that could work as a catalyst for that rally. That is an important resistance level as it was April's high. If the index fails to get above that level, selling of consequence will come in.

A break in the DOW below 10918 will likely cause strong selling to appear, so keep that in mind.

 

[jokepie]

Quote from jokepie:

Selling rest of my goog shorts and buying nflx calls.

NFLX will pay handsomely ..!!!

 

[Tsing Tao]

if you dont go bust first.

market rocketing up with no news at all. quite stunning, actually.

 

[Tsing Tao]

ah, theres the reason. a hilarious rumor about how the ecb will launch massive QE tomorrow. worth 19 ES points, eh? how ridiculous these markets have become.

 

[fly down]

Quote from Tsing Tao:

if you dont go bust first.

market rocketing up with no news at all. quite stunning, actually.

rocketing? to 1200?

actually just part of the zig and zag of forming the massive double top,

 

[Tsing Tao]

Quote from fly down:

rocketing? to 1200?

actually just part of the zig and zag of forming the massive double top,

1206 as of right now. i'd call a twenty five point move in the S+P a rocket, yeah.

 

[S2007S]

Quote from Tsing Tao:

ah, theres the reason. a hilarious rumor about how the ecb will launch massive QE tomorrow. worth 19 ES points, eh? how ridiculous these markets have become.

If that becomes reality this is just getting really fucking pathetic. How much more QE this and that can this world handle, anyone who thinks bailing out failures and creating more QE for every country around the world is just as foolish as the next. The next crisis which will come shortly will be 10X the size of the one this world is in right this second.

 

[fly down]

Quote from Tsing Tao:

1206 as of right now. i'd call a twenty five point move in the S+P a rocket, yeah.

The S&P was @ 1221.1 when this thread started.

Bold any words you like, the S&P is @ 1206 now and that's much more like a zig zag.