The downside target for SPX has been 3200 +/-. It closed at 3678 yesterday after a bounce. This morning the futures (ES) are up 2.22%. Could the bullish plan, as first outlined on Oct. 2nd in NFTRH 725, be starting ahead of schedule? We have wanted to see support (and preferably the 3200 target) marry sentiment and some hopeful news (mid-term elections, earnings, etc.) to ignite the tinder box that has been the over-bearish stock market.
ES is just on a bounce, but RSI and MACD are each starting to turn up. Daily chart…
The bounce did start from valid support and the 50% Fib retrace level around 3500. If ES takes out 3800 it may start to mean business. Beyond that, watch the daily SMA 50 (blue) above. It corresponds with a short-term resistance area around 3900. Weekly chart…
We are all products of our history and experiences. One of my experiences was in 2020, when I had projected lower on SPX than its eventual bottom. It never quite got there. At this time sentiment, the election cycle and technicals are all aligning to project a strong market bounce/rally potential. Maybe it would be too neat for it to wait for SPX 3200 and the post-election period. Maybe, it will actually happen that way.
The market is full of maybes. But the bottom line of the above is that I am paying attention here and now because it’s been a brutal year for the average market player and bullish pressure has been building. ES is at the 50% Fib of the entire bull out of the 2020 low. That’s not nothin’.
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10Y/3M is at 0.07, still positive. In 2018 market bottomed when this spread was at 0.15. It kept going down, turning negative during the rally. Reason is that 10Y yield fell very fast. If same thing is in play now, it may be ray of hope for long suffering gold bugs (like me), who thought they’re smarter than Gary and got in way too early.
Actually Armen, I am of the ‘keep it simple, stupid’ persuasion. If monkey don’t see correct signals monkey don’t do. When monkey sees them, monkey do.
Gapity gap, gap gap gap. Not exactly a solid foundation, more like porous sand, for bully to start a leg up.
Good point. A bottom can come off a downside climax rather than base building, and it doesn’t feel like the market did that.
Sticking with the original plan, but open to change pending the gapity gap gap’ing market.
Today’s opening gapity gap is filling.
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