In the span of a week, the S&P has exploded 10% higher as measured by the e-mini futures. The next "line in the sand" is 1103. A breach of this line would weaken the bear case a small degree; a break of 1129.50 would be even worse.
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Originally published on TheTechTrader.com
It has been a little while since I had an ichimoku update… but then again, I’ve been sitting on the sidelines the entire time (which also happened to coincide with a huge work project – and since that pays the mortgage…).
In my last post on May 25th (here), I commented on my desire to see the price action retest the underside of the cloud and fail. This happened in 07 & 08 and I have no reason to think it will not happen again- short of a black swan news event.
As I was then, I continue looking for a July/Aug failed retest of a bearish cloud – similar to that of Sept 08. Thanks to the ramp this morning, the underside of both the cloud and trend-zone are being tested by the NYSE composite.
I’ve seen a lot of press in the last few days debating the validity of the 50/200 death cross signal. In an earlier post today, Nathaniel’s thoughts mirrored my own – that the indicator needs confirmation. I apply the same need of confirmation to the ichimoku.
Being short in April 08 would have been painful as the cloud was pierced from the underside, and remained above for another few months.
Just for fun, I looked at the same 2003-2007 run up (“failed” death crosses in purple, the red one stuck). At no point was both the cloud and primary trend-line violated.
So I think we are getting close to a decision soon; maybe the next few weeks, if not days. I will be sitting in cash until then – watching the trend-line and waiting for either the failure or successful retest of the cloud.
While enjoying my same-breakfast-every-morning (chopped fruit/granola/blueberries/cottage cheese) and same-drink-every-morning (coffee with some fatty milk) and reading my same-paper-every-morning (the New York Times, dead-tree edition), I read David Brooks' column titled An Economy of Grinds.
If you go to business conferences, you know that at lunch it is definitely better to be seated next to a prince than a grind.
Princes, who can be male or female, are senior executives at major corporations. They are almost always charming, smart and impressive. They’ve read interesting books. They’ve got well-rehearsed takes on the global situation. They can drop impressive names as they tell you about their visits to the White House, Moscow or Beijing. If you’re having lunch or dinner with a prince, you’re going to have a good time.
Grinds, on the other hand, tend to have started their own company or their own hedge fund. They’re often too awkward to work in a large organization and too intense to work for anybody but themselves.
Ummm……..I nervously glanced to see if my picture was next to the Grind paragraph.
In any case, it's an interesting read, which you can fetch here.