Finally getting around to do some work.
The wrap-up: in normal markets, a terrible week of data culminating with a horrible jobs report would have the markets follow through to the downside on Monday and Tuesday. That would be expected, but as I have said many times before, these are not normal markets (see Federal Reserve policy).
Many people have been asking me where the next level of support in SPX will be. I have a chart with Fibo's, moving averages and trendlines to show my analysis.
Before we get to the chart, let's talk risk to reward. If you weren't already short, are you going to now? Has the train left the station? Is there enough downside movement to come to justify entering a bearish trade at these levels? From the other side, who is bullish? I am "getting" bullish, but only in very specifc sectors and specific stocks and by getting bullish I don't mean buying. I mean selling puts on stocks I want to own at levels I like - but I always put a catastrophic stop in and use tecnhonolgy to alert me well before it gets to my stop price so I can make a decision on whether to stay in the trade or not.
I am very picky as to my levels and I am not bullish yet (see job's report).
To the charts we go. Let's start with forex and the GBP/USD and the DOUBLE FALL LINE TRADE my student found for me:
And the BUFFALO BOUNCES that couldn't stop the market today:
Here is an interesting chart: the EUR/USD. The EUR is up big time and the equities are down- back to basics anyone? This isn't the "inter-market hedge" trade, just a nice opportunity to see if the EUR is overvalued. Plus, it looks like the double bottom is exhausted.
To the SPX:
You can see we haven't retraced much at all - so next up, the pink line, then the 200 ma and then the Japan low.
An additional chart on old support becoming new support? Does VALE have another wave down?
Local Tip: Classes at the U start Monday
Happy Trading and Be Environmentally Cool
Coach Brian
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