The 2000, 2007 and 2011 Tops Weekly |
In any case, if SPX bounces as I expect here at 1280, it will have set up a similar channel. The implication is that we will, indeed, start what looks like a new bullish move to the upside.
It's not. Judging from past results, it's a major headfake that will retest the former support line (bottom of the rising wedge) before resuming its decline. Where?
Forecast alert!
I expect the rebound to stop somewhere short of 1320 before the end of June -- ideally Wednesday the 29th. It's the intersection of the rising wedge, a trendline drawn off the May 2 top and the fan line from the Oct '07 high [the Trendline That Just Won't Quit.] And, here's the obligatory mention of the end of QE2. Once we start down, we'll complete the H&S that's been forming for six months (the channel bottom is the neckline).
Our first significant target is the Nov '10 highs around 1225. We should get a bounce there that takes us back up to test the bottom of the channel somewhere between the middle of July and the middle of August [Sure It Works in Practice] before resuming the downturn.
Bottom line: we have about two weeks left to plan those masterful bearish trades, but there are still a couple of pennies left in the path of this steamroller.
2000 Weekly |
2007 Weekly |
2011 Weekly |
2000 Daily |
2007 Daily |
2011 Daily and Forecast |
great analysis pebble, your posts are always interesting. keep up the great work..
ReplyDeleteThanks. As always, please feel free to push back on these ideas, folks. That way, we all learn from each other.
ReplyDeleteWow. Incredibly weak
ReplyDeleteI think we're at the equivalent of November 26, 2007. As long as we stay above 1272 or so, we're just retesting the bottom of the channel. IMO, this is a bear trap -- only in the short run, of course.
ReplyDelete