Slope of Hope Blog Posts
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Two weeks ago I was feeling very bullish and began building long positions. Last week I made this post on why I was feeling bullish and why I was going long. Due to the nature of this market; I got stopped out of many longs shortly after that post, and then we rocketed up after that. I fell victim to the whipsaw…. So naturally I was quite disappointed.
After being whipsawed out I thought about starting to short, thankfully I couldn't find much so I took the week off and have been swimming and going to church carnivals instead. I love summer and lounging around local pools while drinking wine spritzers in old 7-Up bottles.
So I looked at some charts today, and see we are looking at the head and shoulders pattern possibly unfolding. I do plan to start adding some shorts on Friday, but lightly. It seems that lots of folks are talking about it and charts all over the Internet are displaying it. It can even be seen in this Point and Figure chart.
Here is the $RUT:
I'm starting to get worried about it actually playing out, but I will short it since it is at resistance. The P&F chart is "bullish" and many P&F guys say you should only go long; however, it is bumping resistance so I have a nice place to put my stops.
To be honest; I think we have as good a chance of testing the April highs as we do breaking the recent lows right now.
(Note from Tim: I'll be traveling the rest of the day, so I'm going to go quiet at this point. I might manage to get another post or two up with my iPhone later tonight).
The S&P 500 emini contract is pressing towards yet another probe of key support along the 1100 level, which also doubles as the rising 200-day moving average at 1099.70. As long as that support area contains any forthcoming weakness, with an overshoot into the June 8 up-trendline at 1095, my pattern work will consider all the action since the June 15 high at 1111.50 to be a sideways rest-digestion period ahead of another upleg.
If my work proves accurate, then we will look back on the past two sessions as a rest period (rather than a serious pullback) that worked off the overbought near-term conditions ahead of another powerful upleg. For that reason we are long the Ultra S&P500 ProShares (NYSE: SSO) in our model portfolio.
Originally published on MPTrader.com.