1150 before 950

Maybe I should start to fade myself if I get too bearish ? 🙂

Today could be the beginning of a rally that takes us to 1150 which would make a right shoulder on what looks like a large head and shoulders topping pattern.

We are going to need some pretty strong follow through next week and tomorrow to get there.  I still view the next 2 weeks as the most likely for a break of 1040.  It all depends on how fast we rally from here and how soon we can get to 1150, if that.

Given how fast the markets are moving lately a move to 1150 could come a lot sooner than expected.

Based on yesterdays reversal it really was looking like we would see some downside follow through.  The light volume was the kicker apparently and showed the market was just not ready to break.

How we test 1100 in terms of volume is going to be key in figuring out how much more juice this rally may have.

Apparently June 17th to 25th, 2010 is the most ‘vicious’ in terms of astro aspects and both Larry Pesavento and a couple other Astro experts I follow seem adamant that this period is going to mark a significant low in the markets, or a period of wild volatility. 

Could they be completely wrong? Yes.  But that window of days still seems to be a major focal point for the market.

So for the most ideal near term bear scenario to play out, it would be ideal for the market to hurry its rally perhaps near the 17th of June and then turn from there back down.

If we are in a true bear trend both near term and intermediate term, then one should expect in general for the rallies to be sharp and powerful, but they should also be relatively brief time wise compared to the decline portions we have seen

Posted in Index Trading, Market Timing, Online Trading, SP500
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2 comments on “1150 before 950
  1. shrihas says:

    Hi Tom,

    As I opined some time before that when liquidity is abundant it takes worst news to take market down.

    If we ask ourself a question, what will we do if have spare cash. The answer will be “Invest if there is no PANIC”. Fiat currency is doing same thing. It is in abundance in the USA and (with 800 Billion EURO QE), it is also in Europe. That money sitting there itself will be deterrent for any bears.

    However, as astrology is indicating some WORST NEWS, we have to do nothing but wait for WORST NEWS. It can come from anywhere.

    I missed two opportunities to short when S&P abruptly turned from 1107.

    I could be wrong but let us see.

    Please keep up the good work.

  2. Tom Tom says:

    Hello Shrihas,

    Yes indeed you are correct. There is probably a bombshell piece of news lurking beneath the surface somewhere. In fact I was going to write a post about this as I got the idea from a different trading message board. Someone posted that Moody’s or other rating agency would down grade the credit rating of the United States. I have no clue when or if that might happen, but if the US does start to slide into weaker economy, then maybe they would do it. If they do, it would seem it should be good for at least a 1000 point drop. But who knows when they might do such a thing. If they do, I can see it maybe starting a cascade of events.

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