As expected financials are the top performing sector leading this leg up as the SPX has produced a daily 11 count - leaving at least 1 more higher close to go max. 2 towards 1240-50 before a mini correction will start. At the same time if we can manage to close above 1225 on a weekly basis we will produce an 11 weekly count - carrying on from April highs. Which adds to my assumption that early Jan we are poised to make a bigger top count which should trigger at least a 10% drop but 15% is rather the call. Ironically the sell off in bonds do confirm that a down-move is imminent as we are in a green 8 weekly count down and 9 counts have a very high correlation with counter-moves. What I am saying is that the bond markets have come to a point there they will drag stocks down at some point but from a technical point they signal that a drop in stocks will trigger some save heaven buying as they are within this weekly 8 count below the weekly Bollinger which produces usually a bounce. What makes this a save assumption is the fact that the BUND ( the German equivalent) is in the same situation. SPX will drop back from the 1240-50 level to 1200-10, extreme would be another test of the 1175 level before rising again.
Thursday, December 9, 2010
SPX update
As expected financials are the top performing sector leading this leg up as the SPX has produced a daily 11 count - leaving at least 1 more higher close to go max. 2 towards 1240-50 before a mini correction will start. At the same time if we can manage to close above 1225 on a weekly basis we will produce an 11 weekly count - carrying on from April highs. Which adds to my assumption that early Jan we are poised to make a bigger top count which should trigger at least a 10% drop but 15% is rather the call. Ironically the sell off in bonds do confirm that a down-move is imminent as we are in a green 8 weekly count down and 9 counts have a very high correlation with counter-moves. What I am saying is that the bond markets have come to a point there they will drag stocks down at some point but from a technical point they signal that a drop in stocks will trigger some save heaven buying as they are within this weekly 8 count below the weekly Bollinger which produces usually a bounce. What makes this a save assumption is the fact that the BUND ( the German equivalent) is in the same situation. SPX will drop back from the 1240-50 level to 1200-10, extreme would be another test of the 1175 level before rising again.
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