SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
I guess its time for me to go out on the limb and say why I believe we will NOT see 1200 this month (or next). JOBS. The US economy is supported by people who work. As long as unemployment is relatively low and interest rates are relatively benign (and 5%-5.5% is definitely benign) and productivity is + then the market will not collapse. A move to 1200 is definitely a collapse.
I truly believe the gyrations in the market especially June exp. was due to shrinkage in liquidity and unwinding of many hedge funds who were long commodities and emerging markets. The fact that ON Thursday, June 15th (exp for SPX) we rallied over 28pts was evidence that the selling (previously) was artificial and the underlying strength of the companies that make up the SPX was intact. In ONE week NOTHING has really changed. The FED will hike rates .25 and be non-committal about the future...duh. The market will then focus on earnings which actually have been reasonably decent.
Unless and until we actually have WAGE inflation, we will not face a severe correction. The nice smooth channel we had in Jan, Feb and March is gone but I just can not see a FUNDAMENTAL reason for collapse. I know most of you feel more comfortable with TA but if you look on the 3 yr chart of the spx I think an argument can be made for a 1250 low. (or there about). JMHO
I truly believe the gyrations in the market especially June exp. was due to shrinkage in liquidity and unwinding of many hedge funds who were long commodities and emerging markets. The fact that ON Thursday, June 15th (exp for SPX) we rallied over 28pts was evidence that the selling (previously) was artificial and the underlying strength of the companies that make up the SPX was intact. In ONE week NOTHING has really changed. The FED will hike rates .25 and be non-committal about the future...duh. The market will then focus on earnings which actually have been reasonably decent.
Unless and until we actually have WAGE inflation, we will not face a severe correction. The nice smooth channel we had in Jan, Feb and March is gone but I just can not see a FUNDAMENTAL reason for collapse. I know most of you feel more comfortable with TA but if you look on the 3 yr chart of the spx I think an argument can be made for a 1250 low. (or there about). JMHO
Ok maybe I should elaborate a bit. Things are showing to head down to this zone as of todays close. I revaluate everyday. The only contigency to this is fed week, which could cause some false breakouts and price consolidation. I am going off of market profile odds, technical displaced fibs, trendlines, median lines, sr levels and impulse waves that overlap eachother forming confluence zones that are extremely powerful. A 10% correction in the S&P comes into the 1192 area. If we get there over the next few weeks there will be a lot of panic selling and people trying to call the bottom all the way down. I believe the insti's will knock out the week longs there and head it lower to the zone I have shown. I could be wrong and may miss the boat if it doesnt get there, but if it does, I guarantee you can make your money for the year in one day. This is not how I trade, I will be accumulating positions as it comes in. I shorted 1324, bought 1245.75 and sold 1287, so I am pretty confident in my anaylsis. It may stop at 1200 and take off but I wait for my sweet spot to maximize risk/reward. I dont use any indicators like macd etc because I feel they lag and get you into the move to late, as well as the market is constantly shifting, its organic. I catch the falling knife with high probability trade with small stop. Call me crazy, but just watch those zones and remember we are in a impulsing bear market that may not end till the end of the 4 year pres cycle around october or 1140 lows. History repeats itself, why trade against it... just my 2 cents. Fundamentals are important over the long term, but can not justify for market swings of this extent. The market needs a healthy correction, just go back and research 60 years of data and you will see what i mean. Like I said an intermediate bottom is approaching, I just like to get in at the sweet spot.
well you will be buying someone elses shorts, I am not going short for awhile, to much upside risk. The june 15th rally was a short cover rally btw and was due to a pressure of max pain anaylsis, no strength in this market yet. As far as the jobs comment you have a point but look at the housing, us defecit, oil prices, U.S dollar and inflation. You have to look at the whole picture. We all know the economy is poised to slow and if housing drops off we could see a serious recession. US debt is at historical levels, just imagine what will happen when people cant pay off their starbucks latte credit cards due to rates heh. This market boom was due to consumer spending, cap that off and you are in for some slowdown. This is getting off topic. Just giving some advice take it or leave it. This is what makes a market.
WOW. We must have Nostradamus himself and his brother posting here.
I really dont want to be negative on this thread as i have been in the past(trying to pick up some of phil's diplomacy skills LOL), so i will just say this. With such a strong conviction, please make sure you get compensated = or > for the risk you are about to take with your next trades.
