It did not take much to get you excited, isn’t it? All the noise for less than 0.5 % drop? Don’t forget we have to keep the bears interested in the game as well. Just take a look at the daily candles. Today was an inside one.
The FOMC minute sparked a sell-off which puts in doubt the theory of blow off rally. But did anyone really expect the Fed to promise more free money at this stage? Not the big boyz at least. They know it is coming and they would have to be patient.
There are still big money waiting in the sideline and I think the trend change is not yet due. Well, I may be wrong but I will change my view only when I see /ES closing below 1390. Till that time it is a bear trap. As of now /ES bounced off 1400 and hourly RSI is oversold. The following is another daily chart of SPX.
The Ichimoku is on buy signal, there is no DMI cross over, there is no trend change in Arron and no obvious divergence in RSI either.
Therefore, I still maintain my call for top in SPX around 1455 and by the OpEx of April. The internals are getting weak and we will get our 15% correction but not yet. I have shorted too early in the past and I am not going to do the same mistake twice. As of now the up-trend is still intact. Only thing that changed from the weekend plan is how we get to 1455. When I wrote the plan, I thought we will have the spike up in 1st week, roll down in 2nd week and re-test the high and fail in the 3rd week. Now it seems we will grind up slowly all the way to Op-Ex.
If you will, let us repeat, we will not trade out of greed or fear. If you take a note, treasuries also sold off big time today and that does not really indicate bear attack on stocks. Anyone who cares to listen, now is not the time to short unless you are a day trader or scalper and know what you are doing.
That’s it for an exciting afternoon. Thank you for reading my blog. Please visit http://bbfinance.blogspot.ca/ and follow me on Twitter (@BBFinanceblog). You can post your comments in the blog or email me directly at bbfinanceblog@gmail.com. I look forward to hearing your thoughts.
