Originally Posted by Vanity
Posted this June 12. I'm going to see what the market does around the 0.618 level. If it doesn't hold as resistance than the original thesis of a break above the 1305-1335 trading range leading to a potential run up to 1420 is on the table. That would also square with R0wrs original thesis, and also Mact.
It will be interesting to see if the fed does anything tomorrow, or if we just end up range bound between 1270-1360.
UPDATE: 2:38 pm ET.
We are getting a reversal here. We hit the 0.618 retracement level perfectly. The spx has since retraced downwards to, currently, 1357-1358. i went full short recently believing that this level could not be taken out without QE3 or a combination of Twist 2. But these two things are pretty much off the table in my mind. This is an election year. Bernanke needs SOLID downside in this economy otherwise his actions will be ambiguous or even synonymously political, instead of being purely economics-based. Considering how we are only 3-4% down for the year, and yields are already suppressed so low, it's a fat chance IMO. But the 0.618 is key. If it breaks, 100% retracement back to 1420 (potentially). As of now however, we are getting a back-down from those levels. Gold is also NOT confirming any monetary stimulus tomorrow.
Mini-Update: 3:00 pm ET. Also, intraday MACD is showing divergence and not confirming the move up.
I have also been looking at gold as a sign for stimulus coming. Currently, gold is down (meaning the dollar is strengthening), whenever we have a monetary stimulus we devalue the currency (weaken the dollar) by printing (or really dispersing) more dollars. So, gold dropping would indicate we are not going to receive a stimulus tomorrow. Also, The EUR/USD Just fell beneath its 20MA also signaling the dollar gaining strength. Going back to gold its MACD is also beginning to form a downtrend (on the daily chart approx 6 month).
SPX is also very overbought on stochastic on the daily chart.
EUR/USD is also very overbought on stochastic on the daily (also slowly beginning to form down trend in MACD).
SPX also is just oscillating around its 50MA on its 5 min chart and is right above its 50MA on its daily chart. I honestly would have expected a bigger jump after breaking the 50MA but we failed ti get passed 1364, which is a critical point IMO, for 1364 is level 3 resistance (highest/strongest level) using Pivot Points. I honestly do no believe this has much more room to go higher.
Mact, Vanity, Rowr what are your thoughts? I dont see anything from a technical stand point that should make us go much higher, am i missing something?