(Update Thu 7/19/12 10:30AM EST)
More like a jog-away than a runaway. This is somewhat unusual behavior for OPEX since hanging around 2-3% from OPEX max pain (currently 1344ish) is typically no man's land. Maybe we'll get a runaway or magnetic drop today, but time is running out so maybe this will just be an odd OPEX. I think it's a reasonable idea to add to intermediate short positions on a break of 1368.70 hourly support (with stop just above the high). The US Dollar is entering the time window for a 3-month cycle bottom (and 1-month cycle bottom). It may need a little more time and price, but, if it's about to embark on the heart of a wave 3 up, a shallow short-lived bottom would not be unusual and sideways action for another week or so as the 2 different cycles bottom would also be a possibility allowing SPX to chop around too. In any case, the SPX time bomb is ticking. My original thoughts for a July 13+/- bottom followed by a rally into OPEX and then a collapse into July 30 +/- are still on track but I wasn't leaning towards the rally reaching 1375+. Let's see how things react once OPEX pressure is out of the way tomorrow morning. Good luck.
(Update Wed 7/18/12 10:50AM EST)
I'm expecting SPX to either double-top imminently at 1370-1375 and then fall apart within hours OR shoot well above 1375 impulsively. The waves, US Dollar, SPX moving average projections, OPEX magnet/runaway theory, negative divergences and cycles seem to point that way. Do or die today.
_____________________________
Do or die time for the markets into early next week. On one hand, the 20dSMA is set to roll over if SPX drops further this week. On the other hand, the 50dSMA is set to finally turn up if SPX can rally into early next week. The 200dSMA should continue to rise near 1315 by end of week. The 89hEMA/SMA was pierced this morning at 1346-1349. The last 3-day candle criteria for a System bullish configuration temporarily failed this morning when SPX could not reach 1362. Bernanke's comments today make Fed action seem less likely on August 1st. The Summer 2011/2012 chart analogy calls for a very sharp drop starting imminently with algos seemingly producing a lot of repetitive patterns in recent times. My cycle work calls for a low on July 30 +/- and my spending work called for a likely significant top on the week of July 9th +/- 1 week. SPX 1375 on July 3rd qualifies for that top thus far but the time window is open into early next week.
Can SPX rally one more time to 1375+ or even 1422+? It is still possible but time is running out on that scenario. If OPEX max pain near 1340 on July 20th serves as a magnet, a bearish System setup seems inevitable. And, if we get the occasional runaway from OPEX max pain as SPX surpasses 1362 and then 1375 to 1390+, there will be a bullish System configuration probably leading to a backtest of 1350-1375 followed by a run at 1422+ to complete a C-wave EDT from SPX 1011 and an overall ABC from SPX 667. Due to the way I usually see the market operate around OPEX max pain, I think SPX will make a decision today or tomorrow as to whether to runaway to the upside to 1375+ or to settle near 1335-1345 on Thu/Fri. that decision would obviously affect the outcome for the subsequent 2-4 weeks in my 20-50 vision. Good luck.
P.S. VIX has nearly cracked 16 as SPX has rallied back near the morning highs. The US Dollar is not yet confirming the move, but if the bullish scenario takes hold, VIX may very well test the March lows at 13.66 to complete a 1+ year wedge. Like I said, the market is at a do or die moment technically.
No comments:
Post a Comment