Today, the COMP turned on a dime at 3000.11 and the broader markets headed lower, along with EUR/USD, GLD and SLV. DJ30 hit a new yearly high but the chart continues to flatten out. The same is true for the SPX, as on a weekly chart the index appears to rolling out of the channel it has been in the prior 12 weeks. Just about everything currently is negative territory, except the VIX and AAPL, and the VIX is supposed to be up on a day like this. AAPL is truly having a mammoth move, up a staggering 29% since the last earnings announcement 5 weeks ago. There is still a gap in AAPLâs chart. RUT is working on its fourth down day in a row. Apparently it feels the recent mandate of âno down daysâ does not apply to it. Of the broader markets, RUT and DJTrans are the ones least willing to continue the relentless march up. If there is strength in todayâs afternoon for the SPX, and recently it would appear to be likely, it would be a fifth up day in a row. As such statistically, Thursday could be a rest day before the jobs data on Friday. It is difficult to bet against the uptrend, but a rollover has to take place eventually. Enjoy leap day.
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SPX/ES Market Outlook
- Thread starter EliteThink
- Start date
Today's chart is looking encouraging for those hoping for a top of this extended move due to the lack of a new high on 3/1, and so far on 3/2. This would quickly change with a new high for the year. The length of the move, although steeper, is similar in distance to the two extended moves in late 2010. Conceptually, and rationally, it would make sense for a pause to occur at Dow 13,000ish, SPX 1371ish and COMP 3000. It is also possible the window dressing going into the end of Feb is over. RUT has not made a new high for a full month now, clearly pausing. TRANS are experiencing a bounce in the face of high crude, but both are off so far today. The machine which refuses to stop, however, is NDX, no doubt fueled by AAPL. Apparently, AAPL has an IPad announcement on 3/7, and the stock may be in a buy the rumor phase recently, instead of the buy at anytime phase we have seen so long, resulting in an overdue pull back of some kind after the announcement. NYSE volume is still anemic with <1B shares trading daily. the VIX has not made a new low for a month, and SPX ATR5 is holding steady at 10. However, in the end, if AAPL continues its trajectory, and there is any continue of buying enthusiasm, SPX 1400 could be just a few days away. Good Trading.
SPX is having its third down day in a row, and, thus far, support is holding at 1340. The measured move is approximately 38 points from the 2/29 euphoric and window dressing high. ATR5 at the height was approximately 10. Allowing for the usual range expansion in a down market, this 3 day move is about 3.5 ATR5âs. Historically, 3.5 ATR5 is about where a turn will often take place in the SPX with 68% accuracy. And with a 15% pop in the VIX today, fear has shown its face. Todayâs move in the SPY left a sizable gap, skipping right over the 20dma. Techs also had a decent gap down but AAPL is showing resilience well off its rth lows. RUT is showing significant weakness, now below the 50dma. GLD and SLV have been weak as of late, and showing signs of further retracement in the future with support breaking. With what will likely be an election year massaged employment number this Friday, best guess for the SPX at Fridayâs close, barring European potential oblivion, is SPX 1355. With a further precipitous decline, the 50dma at 1320 should be adequate support. SPX is still up >5% for the year.
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As Elite Trader and I pointed out the transports in some posts about 2 weeks ago as well as the russell showed early warning signs to a near term top. As these were underperforming as some other sectors such as the SOX topping out about 2 weeks ago.
Levels to Consider
~1330, 1317 (50 day MA) , and 1290-1310 primary trendline support.
If we sell fast probably 1290 if its a slower grind down probably 1300-1310.
Break of trendline we probably test 200 day 1258. But thats a ways away and will probably need more bad news and some sort of escalation in Oil and Greece getting ugly.
If they trigger these CDS's look get your parachute cause my legs can't survive that kind of impact.
Levels to Consider
~1330, 1317 (50 day MA) , and 1290-1310 primary trendline support.
If we sell fast probably 1290 if its a slower grind down probably 1300-1310.
Break of trendline we probably test 200 day 1258. But thats a ways away and will probably need more bad news and some sort of escalation in Oil and Greece getting ugly.
If they trigger these CDS's look get your parachute cause my legs can't survive that kind of impact.
Good points, I think we all need a parachute at this time, thanks for the post...
The SPX is bouncing with expediency after Tuesdayâs shakeout. Most barometer charts are looking similar, within reach of last weekâs highs, except for RUT and TRANS, as they appear as if they are languishing. Over the past 9 months there have been some incredibly intelligent people who were certain Greece would default, causing major disruption globally due to the affect on the Euro. Amazingly, the situation, at least for now, appears to be somewhat resolved. With the EUR/USD rebounding, it appears the question is if last weeks resistance of COMP 3000, DOW 13,000 and SPX 1378 will hold or not. For now the overnight ES high is being targeted, then the hand will be shown from there. It might make sense for the move to be coming to a close for the day, as the market awaits the employment report tomorrow. Good Trading.
The SPX is bouncing with expediency after Tuesdayâs shakeout. Most barometer charts are looking similar, within reach of last weekâs highs, except for RUT and TRANS, as they appear as if they are languishing. Over the past 9 months there have been some incredibly intelligent people who were certain Greece would default, causing major disruption globally due to the affect on the Euro. Amazingly, the situation, at least for now, appears to be somewhat resolved. With the EUR/USD rebounding, it appears the question is if last weeks resistance of COMP 3000, DOW 13,000 and SPX 1378 will hold or not. For now the overnight ES high is being targeted, then the hand will be shown from there. It might make sense for the move to be coming to a close for the day, as the market awaits the employment report tomorrow. Good Trading.
Attachments
I suspected a rally after Tuesdays self pushing towards 1365 area. I think that this rally could be sold. Looking at the Gallup poll unemployment has risen slightly after bottoming out in January. However I would wait until the report tomorrow then enter a position.
What ever tomorrows report will set the tone. If it misses considerably I would think short and stay short til around 1300 over the next week or so.
You could establish a light short position today stop over the highs and if the jobs number is worse I will add to that position.
I will trade the M2 contract not next weeks expiry. So adjust targets based on that contract.
Depending on your risk tolerance and position size, with a light short position I would be stopped out over the high of 1377.
Target 1300 - Risk Reward Ratio ~10 point risk 65 points reward.
6.5 to 1 I like this trade.
What ever tomorrows report will set the tone. If it misses considerably I would think short and stay short til around 1300 over the next week or so.
You could establish a light short position today stop over the highs and if the jobs number is worse I will add to that position.
I will trade the M2 contract not next weeks expiry. So adjust targets based on that contract.
Depending on your risk tolerance and position size, with a light short position I would be stopped out over the high of 1377.
Target 1300 - Risk Reward Ratio ~10 point risk 65 points reward.
6.5 to 1 I like this trade.
Impressive risk/reward on that trade.
On the Monday after the biggest government default in 60 years, AAPL has hit another all time high, with the tech indices off for the day, so far. It is interesting to see the DOW diverge from the other indices, and particularly the TRANS. RUT is taking the majority of the heat, giving up over .5% so far, although the COMP is not far behind. The VIX is also at the lowest levels since the drop last August, reaching a low of under 16, which, in my opinion, makes a further advance challenging. From many perspectives, the markets have flattened out and have exited their ascending channels. Having predicted a down week last week, and being correct initially, then incorrect by Friday, I should have predicted a down move. Best guess for this Friday is a 1350 close, somewhere between the prior weekâs high, and last weeks low. It's possible a move below last weekâs low, by the end of March, is in the cards, following four weekly up days in a row. Good trading.
On the Monday after the biggest government default in 60 years, AAPL has hit another all time high, with the tech indices off for the day, so far. It is interesting to see the DOW diverge from the other indices, and particularly the TRANS. RUT is taking the majority of the heat, giving up over .5% so far, although the COMP is not far behind. The VIX is also at the lowest levels since the drop last August, reaching a low of under 16, which, in my opinion, makes a further advance challenging. From many perspectives, the markets have flattened out and have exited their ascending channels. Having predicted a down week last week, and being correct initially, then incorrect by Friday, I should have predicted a down move. Best guess for this Friday is a 1350 close, somewhere between the prior weekâs high, and last weeks low. It's possible a move below last weekâs low, by the end of March, is in the cards, following four weekly up days in a row. Good trading.