Above is a chart of the SPY. We think the market is at a key juncture (probably too many).
As can be seen there are just too many lines in the 88-89 region that both the bulls and bears know it is a key area. Also the market has been following cycles to a "T". As can be seen the market has been rigorous about turning every 30 days and on one occassion 45 days ( a fibonacci 1.5 x 30). Monday (If my counting is right) will be the 30th day in this uptrend. Given that we are at the key juncture on so many trend lines makes it even important.
As shown in the chart above the 88-89 region is the "region" in the sand. If the market conquers the area, we can easily ride onto the 940 region.
Now, for the bearish scenario. The internals of the rally, the Advance-decline, volume, RSI have been coiling up/ waning in strength. So, the bear case definitely looks good. The bearish ascending wedge is clearly visible, may be too obvious. So probably every technical trader is waiting for a breakdown. Our strategy is simple, we will wait for the wedge to break before going long or short one way or another. If the wedge breaks down 780 -760 is the first target so there is ample room to fall. On the upside, we believe the double top 943 is the target. So again there is ample room. The key is to watch the hourly moving averages to direct our trading.
Feel free to ignore:
While we don't know whether to believe Armstrong's confidence model and his theories
is quite an interesting read. According to him Apr 23rd we will a D-day. Apr 20th is close enough.
On a side note, If the decline does happen, the astro gurus (some of my fellow traders) will be all over me, telling me I told ya so (on Apr 17th) :-)
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