Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

S&P Stock Market Index 400 Point Move!

Stock-Markets / US Stock Markets Jul 14, 2008 - 03:30 AM GMT

By: Dominick

Stock-Markets What if that was the headline for this coming week, a four hundred point move in the S&P? Most likely, you'd be loading up on out of the money puts or calls , looking for the market to close at record highs or down around 800. If you haven't noticed, those looking for a sudden, dramatic collapse in stocks have been thwarted by a slow, persistent drip downward occasionally punctuated by vicious snapback rallies.


But what if I told you the S&P 500 did move 400 points? Just last week in fact. Sure, on a closing basis we're lower by just 16, though it feels like 1600. Not counting tiny wiggles, though, all the larger moves on an intraday 15-minute chart from last week add up to about 400 points. That's more than if you shorted the top tick at 1440 three months ago, or even the all-time high back in October, almost a year ago.

Realistically, it's very unlikely that many shorted that record high, and if they did, those have all been shaken out long ago by now. Most professional money managers would kill to have just a piece of that total move from October, which measures to about 345. Yet unbiased traders who aren't trying to hit a home run are making big money taking 60-70% of those points or more every week. No, it's not easy, but at TTC, that's what we do!

Now that we've closed our doors to new retail membership, existing members have had the opportunity to acclimate themselves to our trading style and learn our proprietary indicators and targets. They've learned to stop counting a volatile market. But even more importantly, they've learned to stop trying to catch a bottom or a top and just trade.

So, with that in mind, looking at our longer term charts for the next big idea going into this week, there are several factors that seem to be lining up to produce a tradeable bounce and the last thing we want to do is be short into it. But make no mistake, the bears have the upper hand after taking out the March low and if there isn't at least some type of decent rally soon, this market could finally be ready to go lower in a big way.

The chart above has been a main focus of ours all year as we've watched the Dow interact with two major trendlines stretching back to the 1980s. Yes, the market could continue its decline from here – everything can continue to go wrong as it did last week with the market ignoring major projected cycle bottoms and losing support even after a clear five waves down. But, being unbiased means we have to keep in mind the idea that we at least get a kissback here, possibly even to one of the major trendlines. And given the other corroborating factors described further in this update, risk/reward would seem to favor some strenght in the market here soon. 11750 in the Dow will again be an important deciding area on any rally that gains momentum.

The chart above is a clear indication of potential support working in this area. We had 1440 as a crucial test even as we were starting our ascent off the March lows. And, after finding resistance there to the tick, we looked for support at 1333 and 1256, both of which have failed. But our plan all along to see the S&P hold up as the banking index completed five waves down with new lows. While the chart above shows the S&P reaching strong potential support at multi-year trendlines, the chart below shows Citigroup at or near a bottom. The “flat” wave pattern C is trying to complete and can end immediately or extend as low as the 1.382 extension. What is certain is that a bottom in the banks will translate into a powerful rally, even if short lived, in the major stock indices, and, again, the last thing we want to do is to be short into something like that!

Another major factor that could be contributing to a tradable rally in the very near term is oil. Of course, oil has been watched by everyone and has been one of the major headwinds in this market. Having clearly gone parabolic some time ago, the move in oil now looks overdone and when it breaks, it can break hard and fast. Like a bottom in the banks, a top in oil could have profoundly bullish implications for the broader market. My chart and targets have to be reserved for members, but believe you me there is a trade here that can make your entire year, and fast. At TTC we've traded both sides of this market from $123, but are now looking for short entries. If what we're watching is correct, the TV is going to soon shift its focus from $150 oil to $100.

And finally, there's sentiment, which has become awfully, horribly bearish. It may not be reflected in the VIX because of the orderly nature of the decline, but believe you me that many people are short this market and getting complacent even as the fact that nothing worked in the market last week, combined with the other factors I've described, suggests the possibility of at least a short term low. And, as I've said, there's still a chance that our dip below 1256 is still a minor poke if we get a recovery soon next week. You know now the market and areas we will be watching for confirmation of this idea. If not, then look out below because there's no more room for the bulls to extend lower for another week like we've been seeing. The biased bears have finally gotten a chance to short blindly and be right, but this is rare and doesn't last forever. The unbiased traders have made money on the downside and have no illusions going into next week.

Institutional traders , if you're ready to get on the team that makes money no matter what the market environment, then maybe it's time you joined TTC.

Long time readers will remember that after two years of growing our membership through consistently accurate and tradable market analysis, we closed our doors recently to focus on our existing membership, largely institutional traders, and give them a chance integrate our approach into their trading. Old habits don't change overnight, and it usually takes weeks if not months for new members to start making consistent gains with the resources offered at TTC. We are a serious group of dedicated traders with only one mission: to trade profitably. Those that take the time to learn our methods are very happy they did.

Retail traders , if you missed the chance to join earlier this year, do not hesitate to click here and register for the waiting list with no obligation at all. In the very near future we will be providing the first opportunity for membership from that list.

In the meantime, be careful out there. Be aware of what the charts are saying in multiple markets and tune out the TV. Don't be afraid to take high risk/reward trades, but be ready to cut your losses quickly if it's wrong. But most of all, be unbiased.

By Dominick , a.k.a. Spwaver
www.tradingthecharts.com

This update is provided as general information and is not an investment recommendation. TTC accepts no liability whatsoever for any losses resulting from action taken based on the contents of its charts, commentaries, or price data. Securities and commodities markets involve inherent risk and not all positions are suitable for each individual. Check with your licensed financial advisor or broker prior to taking any action.

Dominick Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules