Lets Hold 1181 or Lower on the sp500 today by the Close

I really do hope that we hold 1181 or lower on the sp500 by the close today.  It would in my opinion really help to seal the bear case and and the short side of this market.  I continue to believe that the short side is the right side into end of October 2010.

I see gold getting slammed down hard today, the dollar gaining its footing after stumbling yesterday and AAPL showing weakness and ready to reverse down again.

Sometimes common sense works a lot better than any daily indicators.  Common sense tells me that the election and QE2 Fed meeting (8 to 9 trading days from today) the day after will NOT serve as continuation buy signals.  Instead I see them serving as either

  • A. climax sell off points OR
  • B. topping points

The possibility that the election and QE2 meeting is going to simply serve as a continuation point (after a run up into it) where the market blasts higher by another 500 points seems extremely remote at this point.  I have been wrong plenty of times before but that is how I see the odds shaping up using just simple common sense.

But if I do add in all my charts and indicators, I see the same thing, either options A or B above, but NOT option C.

I want to see us hold 1181 or Lower on the sp500 today to give us a reversal hammer and topping tail or even a possible gravestone doji.  Would be very ideal going into Friday before the weekend.

Now will I get my wish or not? Or will the market be a spoiler again…

BOT Short Signal still in force since 1178.64

Posted in Index Trading, SP500
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10 comments on “Lets Hold 1181 or Lower on the sp500 today by the Close
  1. Geoff says:

    The Aall Investor Sentiment Index for week ending 10-20-10 was posted early this morning. Bulls = 49.5% and Bears = 25%. This is 2% increase in Bull % from last week. I think these numbers are supportive of bearish case

  2. Shrihas says:

    Tom,

    I thought of shorting S&P at 1186 but backed off.

    More than FOMC Meeting, I am worrying about statements from Chinese officials from G-20 Meeting in South Korea on Friday/Saturday (22/23 Oct).

    Single statement from Chinese officails about possible revaluation of Yuan will send S&P to 1200 and If I see that statement, rest assured, I will have shorted…

  3. Shrihas says:

    Sorry the statement should read “Single statement from Chinese officails about possible revaluation of Yuan will send S&P to 1200 and If I see that statement, I will short…

  4. Tom says:

    Thanks for the AAII sentiment Geoff. I agree with you it does support the setup right now.

    Shrihas….. I think today was the final top.. we got a key reversal today. I think we can still have up days from this point forward but in my opinion they will only be of the ‘lower highs and lower lows’ variety…

    Also gold is showing the way as a leading indicator. Dollar gaining firm ground.. I think the today is the day.. and any rallies from here are new shorting opportunities in my opinion only.

  5. Tom says:

    I really can’t speak to the Chinese officials or what they may or may not say.. I am just trusting the tape for now…. So you are implying that their statement would send US Dollar lower ?

  6. Geoff says:

    i am very superstitious and the day is NOT yet over. let’s hope by the end of the day, and after AMZN and AMEX earnings after the close that it all will support the bearish case. no matter how bad the AD is today, the 10 ma will still be positive which will extend the string of positive days of 10 ma to day #35 – – definitely the longest such string in 2010 and an incredibly long string since i have been keeping records – – it may be the longest such positive string.

    i think likelihood of anything but contention at the G-20 is extremely remote, e.g. i think extremely remote that Chineses will revalue – – even if they promise with no specifics, they already did that in June or July and the market already celebrated once but nothing really happened. nothing but nothing will be resolved at G-20 and it may be the start of more currency warfare. if the Europeans PLUS the Americans start harping on China to revalue the Chinese will really be backed into a corner.

  7. Shrihas says:

    Thanks Tom,

    I know that because of my such thinking, I lose some opportunities.

    I agree with Geoff that nothing will happen in G-20 Meeting but my worry is “Single such statement”. US also delayed Currency report, So I am suspecting that something is going on behind the scene.

    US official believes that employment in US will go up if US produces inhouse what it imports from China. That is why whole market is looking at this G20 meeting (I could be wrong about “Whole Market”).

    Frankly speaking, I am not keeping any short position this weekend. Last time, I was stopped out on Sunday night when China declared revaluation… and in a fortnight S&P fell 100 points……

  8. jxxd says:

    SPX – you made it by a 1/4 pt, that and your volume call on SPY yesterday means you are on the cutting edge. Really enjoy your posts.

  9. Tom says:

    jxxd, thanks man.. maybe I am on a lucky streak 🙂

  10. Geoff says:

    let’s hope so – – but i would definitely not characterize as any sort of “streak” at this point 🙂

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