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I stand by my view that the market will form a short term or intermediate term top in the early Nov period. A break of 3 day lows at 1529 would confirm my view.

The Nov monthly PP is surprisingly high (1538). My expectation was that PP would come in at 1520 or so. The pivots are as follows:

R2=1624

R1=1587

PP=1538

S1=1500

S2=1451

By the looks of things, I think Nov would at be become a month of churn with a slight bias to the downside. Given that we closed at 1549 yesterday, we are a mere 11 points above PP. I personally don’t think the market can hold this pivot unless it rockets directly to 1587 within the coming days. As such I expect a test of S1 and potentially a poke to S2 (although this is less likely) before the market tries to rally to PP or R1 near month end. Therefore, I suspect a good time to buy would be the late Nov period just in time for the customary Santa rally.

I’ll have a chart up by the weekend.

For now, I’ll leave you with this interesting chart of the SPX. (Click to enlarge)
spx2144.png

Update: Holy shit. Minutes after typing this up, Exxon Mobil’s report comes out and spooks the markets. Talk about odd timing. (Also BKX, Gaming stocks and in fact everything is getting fucked.)

Update:

My Nov guess.

ss8793.png

If 1500 doesn’t hold, I think 1450 will hold and be a good long entry point. It would also be the 62% retracement. However, how the bounce gets treated will decide whether the market will go to new highs or retest Aug lows.

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Market Outlook

bear_market_02.jpg

Bears came out roaring this week. 4 out of 5 down days on most of the indices I track.

Diagnosis: I think more near term weakness for the US ahead, although a tradeable bounce could be just around the corner. Over the medium term, I am of the view that the SPX still has a decent chance of rallying to 1620 before year end. However, I’m starting to get uncomfortable with my longer term optimism with the US indices…but don’t color me a bear just yet. For this ‘correction’, I suspect 1480 or so will hold on the SPX…

spx927341.png

spx293742.png

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My homework appears to suggest so…

Perhaps the bulls could muster up a six hit combo to the bears in response to the beating they took on Friday.

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1449 remains support for the ESU7, with the next one at 1434.  I’ll be suspicious of any gap ups, but I would consider buying a gap down.

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Expecting a intermediate term top here for All Ords.

xao11.png

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bear_attack.jpg

Long term – bullish.

Short term – bearish/neutral.

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LT bull still in tact.

No bear market on the horizon, although we are still technically in correction mode. Monthly pivot is at 1488, which will serve as resistance given how overbought we are in the short term. However, I’ve been thinking that perhaps this rally can last longer than most people expect, thus who knows…It can go a long way, just like it did last summer. I think 1405 or 1430 will most likely hold on the downside. In the short term, I still favour a downdraft in the coming weeks, which should finish up this correction once and for all…or maybe not.

Short term chart/targets:

spshortterm.png

Long term view: First chart shows the histogram is still very much above zero, which is a sign of a healthy bull market. Second chart speaks for itself.

spx-long-term.pngspx-long-term2.png

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This bounce could have a little more to go, but I’m guessing that a strong pullback may be due either by the end of this week or by the start of next week. Rarely does a correction this big go untested. If I had to go long on a futures contract, I’d opt for the NQU7.

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As for Oz stocks, I didn’t get to buy more QBE, but will buy on dips from now on. My so far miniscule 10% weighting in QBE is exposing me to this market bounce. I’ve still got 5% weighting in ANZ.  I’m also gonna be doing a speculative catch the knife trade on David Jones DJS if it falls to the 4.15-4.25 region.

Will buy some more QBE on dips. As an aside, the All Ords looks like its heading for a 61.8% retracement at 6095 by Thursday or Friday.

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