TA

All signs point to a deeper correction
The S&P 500 resistance at 1055-1065 was respected and the uptrend line in
place since the July low has been broken. Short-term indicators are approaching
oversold levels, but intermediate indicators remain overbought. More importantly,
our volume models remain negative - the Volume Intensity Model (VIM) continues
to point to more selling than buying. On October 1 the market sold off sharply
generating a 90% down day on higher volume – another sign the market is under
distribution (selling). Breadth is also not supportive with our advance-decline line
diffusion indicator never confirming the recent recovery highs. Risk measures,
such as the EURJPY currency pair, are pointing to further de-risking, and the ratio
of stocks versus bonds now clearly favors bonds.

spx1809.JPG

usdjpy1809.JPG

Good morning,

Yesterday, the sellers took controll and we got a ''doji'' formation on SPX on daily chart. If we get a follow up on the downside with some volume, we will get a confirmed sell signal where we can expect decline upcoming days.

Furthermore, I got a chart from my broker regarding USDJPY. We recently completed a 3-drive formation since early summer 2009. This support the case for a pop on USDJPY next couple of days. Stronger USD favors weaker performance on equity and commodity.

In this matter, we are now going short on SPX (SDS) and also having some short exposure on commodities. Looking for a retest and gapfill on SPX to 1015 area.

Best regards,
Viewll

spx1409.JPG

Good morning,

We thought the market would get a pullback from last friday. However, we did get a weak opening yesterday, but the market was strong troughout the tradingday and closed right below 1050 on SPX. In this matter, the divergens on momentum and price is bigger at this level. In my eyes, that is a reason to be carefull if long and wait for weakness to go short in this market.

I will anyways respect price and if SPX close above 1050 today, I will bite the dust and cover my shorts and go long. Next target on the upside is still 1120 area on SPX, which is 50% retracement on daily chart. On the downside, I am still hoping for a gapclose and 61,8% retracement on hourly timeframe @ 1015 on SPX.

Best regards,
Viewll

Evening guys!

I believe we reached the top for now on this current leg/pop last couple of days. Although, my target was 50% retracement on daily chart for SPX @ 1120+. However, I think the market is ready for a shortterm pullback. On that matter, we locked our profits on SSO (see earlier blog entry) yesterday and loaded up with SDS.

Our target is 1015 on SPX.

Here's a look at the recent market - notice today based on a fairly accurate signal looks like we reached an inflection point atleast for a few days.
 
 

The technical target following the break of this multi-week bull flag is somewhere around $1.55 though some nice fib resistance can be found right at the current levels. This could turn the pair down for a re-test of the upper limit of the recent trading range ($1.49/1.50) that would be about 61.8% retrace of the recent run up.