with Anthony, ZigZag & Platy
Something is holding this market up. I think most of us would argue it it the quantitative easing program and the relentless destruction of the USD. Fridays unemployment numbers are simply farcical in nature, but then again the methodology that the US uses to calculate its non-farm payrolls is probably run by the same mob that produce Australian inflation statistics. My electricity bill has gone up nearly 40% in the past 2 years, yet inflation has only increased by 1.5%, go figure. Luckily though interest rates for long term deposits are in the region of 6.5% but that’s ok because by the time i actually get the interest paid to me ill be paying $2.50 for a liter of petrol the value of my property will have eroded and the purchasing power of the money in my sky rocket (pocket) will be worth less between the time ive left the house and drawn it from the ATM.
Anyway, we had a top of some sort on Friday as i was expecting. You guys ready for the next curve ball? Well i think that Monday could well be the day to exit the shorts if we get a bounce off of the light green line at 145.10 and the lower end of the upwards sloping pitchfork. Taking a step back it is clear that price is still very much in an uptrend until that lower pitchfork can be breached. I believe Monday will open slightly higher and possibly test the 1464 level before pulling back to the green line. If this level were to break the next target is at the dark green line at 143.43 level closing the gap from the 26 September. IF we do bounce at the light green line i expect a bounce back up to the red line at the 1475 level on the 10/11 October.
Weve now had 8 closes within a tight upward sloping range, we need to be careful at this stage to increase our long positions and be mindful that we are still at strong support which until broken keeps this uptrend intact. Lets watch that 145.1-145.2 level on the SPY closely to give us a clue on where we exit/hold. I was sure Friday would be a CIT high, i guess now price will tell us for how long.
If you are short then you may want to close out your trades on Monday. Put these levels on a SPY chart besides your other charts and use it as a proxy for entering and exiting the trade.
The roadmap provided a part of the reason why i went short a daily early on Thursday and also into Friday, i guess looking at this roadmap it would be pretty hard not to be bearish right now. For now ill just wait for Mr Market to tell me how bearish he is.