H&S, R.I.P.

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Well, this pattern had a lot of promise, but it's dead, Jim.

0715-spx1

So here is a broader view of the S&P cash market:

0715-spx2

The bulls own this market now. For the bears to take over, the S&P would have to blow below this month's lows (around 875). The odds of that happening went way down over the past few days. 875 is very strong support, we can plainly see.

The huge yellow zone shows that there is very little in the way of the bulls ultimately being able to push this market to about 1,150. They will have to get past about 975 first, though (circled above), since that is the underside of a major broken channel. It also seems that every attempt to make a higher high does succeed to get a little higher, but then it starts faltering again (June 11th being the most recent example).

A lot of people have been writing to me about sentiment. I respect the value of sentiment indicators, and I generally agree that until we get to the point where the public is absolutely convinced that Happy Days Are Here Again, it will be very tough (still) to be a bear.

I just read the Elliott Wave Short Term Update, and they've pretty much thrown up their arms and have said an S&P between 1,000 and 1,100 is in the cards. From a big picture perspective, as I've said repeatedly, having the S&P in the quadruple digits in September would be a marvelous opportunity. My problem is that, frankly, I had such a blast trading between October and February, I got used to cashing in heavily on downsweeps, and I've been looking for them ever since. It's been an uphill battle, and it's exhausting.

Although lottery longs are getting more and more sparse, they are still out there. My 401-k hit a new high today, and that was even after I saddled it down with a big DUG and TWM position in the middle of the day. Rinky-dinky stocks that can climb double digits in one day are still out there.

I got stopped out of dozens of positions today, but I still have plenty of shorts out there, as well as some puts. It seems that the slow process of clawing my way back up the mountain has started again. But successful traders don't quit when things are tough. I'm going to be right back in there tomorrow, ready for battle.

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