timwest

SP500 SP1! Monthly PATTERN suggests sell in December

CME:SP1!   S&P 500 Futures
The S&P500             has a pattern that is extremely interesting.

I've devised an indicator I call Range-Movement, which I say Range-Move and shorten to RgMov on the chart below. It measures the way the market is moving and compares ranges to ranges, side-by-side. It also gives very interesting indications of TREND and sometimes more importantly it shows the level of "psychology" in the market.

Oddly enough, all of these 5 signals allows the market to fall a little in the current month (September 2015), but then rebound in the next two months into November.

So, we can say with decent probability that we can rebound after this month but sorry to say that we can decline this month too. At the end of September we can look for a bounce since in each occasion there is a bounce after the next month ends.

The way to trade it is to buy the end of September, and then hold for 2 months. Then trade the breakout of Novembers range. Buy a new high over Nov's range or sell short a break down through Nov's low.

The average winning trade here is quite sizable:
1a. Sold 459, covered 476. 4% loss.
1b. Buying over 3rd month high gets you long in March 1995 for the bull market. 100%+++ gain.
2. Sell short under 3rd month low gets you short for a major bear market into 2003 = 38% gain.
3. Sell short under 3rd month low gets you short for a major bear market into 2009 = 45%+ gain.
4. Sell short under 3rd month low (November 2015)....

So, sorry for the "heads up" this early. But just wanted you to see what patterns the market is revealing to me.

Tim
Comment: The pattern is unfolding according to the pattern. A rally happens after the first washout to a 24-month low. The rally is setting up quite a level of optimism from which a major move could happen, as per the pattern.
Comment: S&P500 Fell under the November low on Friday, December 11, 2015 triggering a sell signal. I realize the market is deeply oversold and right into old support levels but in case you had missed the setup, I am reporting it here. What I would recommend is to get started in a position and then work into the balance of it over time and use a stop over the November high.
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Nov lows taken out... time to double up short then?
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We have a huge weekly downtrend in S&P.
snapshot
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Hi Tim, is this pattern still valid?
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It's a little be early, I say it's a morning call. Let's find DXY top and EURO bottom first. It'll drop to 1600 and a nice buy there.
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Thank you Tim!! where do you see market heading now? will it make new highs with all this bad reports coming out for the quarter. bad earning (few sectors), weak employment, China trouble, etc... hack even FED cant raise the rates to .01% which confirms that we are running on weak economy? please share your view. :)
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timwest PRO sandeep9598
There are so many comments to make. What I have drawn here is a simple way to capture the pattern of price action and that is to exit at the end of November and then wait for the November range to break on one side or the other and go with that momentum. The news is always troublesome with concerns about weak and falling S&P500 earnings (only up because of buybacks), strong dollar, terrorism, nerves about holiday spending, a weak housing market, and many other factors.
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It's following the pattern as prescribed by Tim.
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I think we will rally into November and Decembers (Santa rally) then offer up a big selling opportunity at the end of December
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Everyone is feeling great with AMZN up so much! The market only goes up, it gives money always. ;-)
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