OK! we are above 1070 that I forecasted on July 1st & July 4th posts, now what!
In my July 1st post, I gave two scenarios, one of them was S&P500 could break the 1040 support and hovers below it for a couple days then big institution could squeeze the short and we get a rally to minimum of 1070 & maximum of 1090. I cannot say for sure if we have the bear trap yet, but if S&P500 stays above 1071 it will conform the bear trap. Anybody who went short the S&P500 from June 28 to July 2nd is trapped badly. We technicians call it bear trap, see the chart in blue circle.
In my July 1st post, I gave two scenarios, one of them was S&P500 could break the 1040 support and hovers below it for a couple days then big institution could squeeze the short and we get a rally to minimum of 1070 & maximum of 1090. I cannot say for sure if we have the bear trap yet, but if S&P500 stays above 1071 it will conform the bear trap. Anybody who went short the S&P500 from June 28 to July 2nd is trapped badly. We technicians call it bear trap, see the chart in blue circle.
We rallied 6.7% from low(1010). I was looking for short squeeze to 1070,but S&P500 could exceed my July 4th forecast and moved above it by 7.96 points (S&P500 Fri close: 1077.96).
I'm in the bear camp and look for S&P500 to roll over soon, but if market send me different signal I'm willing to jump in bull camp. Please note S&P500 must get above 1100 to make me bullish. We are extremely overbought in short term, but intermediate time frame is neutral. What do I mean by that? It means we could move higher as long as S&P500 stays above 1071, everything depends on earnings. It will start with Alcoa "AA"(Monday after hours). If there is a good earning obviously we would move higher...
I give 40% chance of rally to 1090-1100 then we should see S&P heads lower. There is a 20% chance for a bounce back if S&P500 tanks to 1060-1055 . If you are a bull you don't want to see S&P500 moves below 1055, if S&P tanks to 1050, it should free fall to 950 fast. At this point I just give 40% chance of such an event.
Meanwhile pay attention to these levels; S&P500 short term Resistance:
I'm in the bear camp and look for S&P500 to roll over soon, but if market send me different signal I'm willing to jump in bull camp. Please note S&P500 must get above 1100 to make me bullish. We are extremely overbought in short term, but intermediate time frame is neutral. What do I mean by that? It means we could move higher as long as S&P500 stays above 1071, everything depends on earnings. It will start with Alcoa "AA"(Monday after hours). If there is a good earning obviously we would move higher...
I give 40% chance of rally to 1090-1100 then we should see S&P heads lower. There is a 20% chance for a bounce back if S&P500 tanks to 1060-1055 . If you are a bull you don't want to see S&P500 moves below 1055, if S&P tanks to 1050, it should free fall to 950 fast. At this point I just give 40% chance of such an event.
Meanwhile pay attention to these levels; S&P500 short term Resistance:
R1:1080
R2:1094
R3:1100 major resistance
R4:1125
R5:1131 major resistance
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