The futures are down big time. With the markets showing weakness already, is this the infliction point we have been waiting for all these days? I somehow think this is not yet the time even when the market goes down on coming Monday. The following is SPX weekly chart.
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Distribution Or Blow-Off?
It did not take much to get you excited, isn’t it? All the noise for less than 0.5 % drop? Don’t forget we have to keep the bears interested in the game as well. Just take a look at the daily candles. Today was an inside one.
The FOMC minute sparked a sell-off which puts in doubt the theory of blow off rally. But did anyone really expect the Fed to promise more free money at this stage? Not the big boyz at least. They know it is coming and they would have to just be patient.
There are still big money waiting in the sideline and I think the trend change is not yet due. Well, I may be wrong but I will change my view only when I see /ES closing below 1390. Till that time it is a bear trap. As of now /ES bounced off 1400 and hourly RSI is oversold. The following is another daily chart of SPX.
The Ichimoku is on buy signal, there is no DMI cross over, there is no trend change in Arron and no obvious divergence in RSI either.
Therefore, I still maintain my call for top in SPX around 1455 and by the OpEx of April. The internals are getting weak and we will get our 15% correction but not yet. I have shorted too early in the past and I am not going to do the same mistake twice. As of now the up-trend is still intact. Only thing that changed from the weekend plan is how we get to 1455. When I wrote the plan, I thought we will have the spike up in 1st week, roll down in 2nd week and re-test the high and fail in the 3rd week. Now it seems we will grind up slowly all the way to Op-Ex.
If you will, let us repeat, we will not trade out of greed or fear. If you take a note, treasuries also sold off big time today and that does not really indicate bear attack on stocks. Anyone who cares to listen, now is not the time to short unless you are a day trader or scalper and know what you are doing.
That’s it for an exciting afternoon. Thank you for reading my blog. Please visit http://bbfinance.blogspot.ca/ and follow me on Twitter (@BBFinanceblog). You can post your comments in the blog or email me directly at bbfinanceblog@gmail.com. I look forward to hearing your thoughts.
“Blow-Off Top” Rally Day One
It was a rather sedate start of the “Blow-Off Top” rally. In the morning, before open /ES gave back all the overnight gain and was in negative. SPX even started in negative territory. But the cycles have bottomed last week and whatever be the news, the market zoomed up. I do really wonder, is it really the news which moves the market? Because we did call for the start of the rally from Monday, i.e today and the plan of action was laid out in the weekend report.
If we take an average target of 1455 and I will come back to that figure in a while, we are now only 35 points away and we have 3 days to reach there. I think it is immensely doable. And why 1455 you may ask. Because everyone is still shorting it as we go up and a big short is set at 1440 and then 1450. The market will take out all these shorts.
Blow-Off Top Rally Coming (by BBFinance)
The 1st quarter is now officially over and what a quarter it has been so far! The stock market rise which started with the Santa Rally did not look back and kept rising. The bear camp including many famous names have been obliterated and ridiculed. But it was a rally which nobody loved. The bears hate it because it destroyed them. Bulls hate it because they were not fully prepared for it and could not get enough of it. Those on the sideline hate it because they never got a chance to join it after a pull back. Because there was no pull-back.
While I correctly predicted the start of the rally, I jumped down too early based on Technical Analysis while my cycle analysis and fund flow analysis were still positive. But in the Fed manipulated world no TA or fancy chart works. To get an idea of how the stock market really works just take a look at the following chart.
Happy St.Patrick’s Day (by BBFinance)
Yesterday I sent out the following tweets:
- GM all. All the witches are here and all kinds of black magic will be deployed today. I would rather watch the action.
- And see if any blow off top is coming. Dips are routine in morning followed by rips in afternoon. SPX 1410 is almost guaranteed. Almost!
- SPY dividend today. SPY may be in red even when SPX is up. Blame triple witching!
- NZD/JPY now has a better correlation with SPX than AUD/USD.
