S&P Update

I haven’t said anything about the S&P in ages because nothing interesting has happened.  SPY is still within its rising wedge.  It has found consistent resistance around 2100, but has also continued to find support at its rising trendline. This picture remains bearish in my opinion, but a decisive break above 2100 would suggest that the rally has another leg higher.  A breakdown here could lead to a waterfall.

I do remain of the belief that this market is a house of cards. It is a confidence ponzi built on hype and hope. That realization may be very slow in dawning on the majority, but when the realization occurs, I don’t think the exit doors will be wide enough to allow for a tidy exit. I expect a waterfall, and the question will be how much buying power and influence the central banks can assert to sustain the ponzi that they have built.

2015-05-12-ES_CHARTS

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  1. Draft
    June 30, 2015 at 12:26 am

    Ok…things are getting interesting! I unfortunately completely messed up the timing. In any case I’m curious what you think the charts are saying now.

  2. June 30, 2015 at 11:05 am

    Draft.. hopefully you are well. I am about due to post an update and will probably do so after the month ends. I see the S&P as breaking down from the rising wedge. But it has done so before, so I want to see how it ends the month. The S&P is sitting near the 200 day MA, so I expect it to find support here. That said, who knows how the market will respond to a Greek default (or not default). At some point I expect to see a waterfall because the exit doors are WAY too small for the amount of liquidity in the system. But I have no idea what will facilitate the necessary panic. I bought some VIX call options on Friday just because they were crazy cheap given the risk of a Greek default, but I am not heavily short. I am waiting to see a more serious breach. I am just waiting and watching for now. I still think the next big move is down, but I have thought that for a long time, so I am somewhat skeptical of my own confidence.

  3. Draft
    June 30, 2015 at 11:46 am

    I stupidly gave up on some VIX I had bought last week… Anyway, still have some bear ETFs, and added to them yesterday morning.

    My timing has been off as well, so I’m curious where this is going as well. It does seem to have invalidated the rising triangle which was a bullish pattern.

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