Sunday, January 23, 2011

I Think SPX has...

SPX made a HH and HL and closed in the positive that is positive for the markets. The high of the day came at 7 and the low of the at 12.56 just a few minutes before close.  Range was 11 points.  RUT had a similar trading pattern but it was much weaker.  The top came at 6.34 and low at the end of day.   Neither of them closed at a point to qualify for low of the day close.  For a option expiration the action was brisk.  Once again the max pain was way of mark.  This is so because the open interest used in these calculation is at least 2 days old.  
On right weekly charts of SPX and RUT.  It was a short week of 4 days only.  While SPX made an attempt to recover 75% of the range of the weeks decline and settled at 50% RUT's efforts were anemic and it settled near low for the week.  Not a healthy sign. They are 5 min. charts and the Doma 77 works well for really really short term trades.  RUT and SPX do move out of sync  particularly at tops and bottoms.  

The chart on left is 4 hour chart of RUT.  I have noted the decline %tages on the chart.  RUT is in a  10 week cycle from low to low approximately.  Based on that I expect RUT to bottom around 5th of Feb. The first 2 point trend line is important in my books and that is projecting a 680 bottom.
Lastly on right is daily chart of SPX with important date count on it.  Both Fib. and Gann days/dates are marked.  144 days from Jul 1st low falls on Wed.  the 26th an important Gann date and also 144 is a Fib. number of days.  SPX low on July 1st was 1011 and the sq 9 marked number is 1008 making adjustments for that 1299 seems a reasonable top.  I wouldn't be surprised if SPX makes make another attempt a small one spends 3 days near the top and finishes the formation and starts the decline on Wed.  This is a calculated projection and not a forecast.  By my forecasting method SPX has topped for it has done a first top at 1296 and a second one at 1291.   Anything over 1299 and I will have to look for fresh signal.
I am short and will continue until the signals reverse and they haven't
Thanks for reading my blog.

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