SP500 - Risk reward 2 up by 10 down over 4 weeks.

FX:SPX500   S&P 500 Index
932 38 8

Although it looks like there is a breakout, there is not actually much space available to climb.

At best SP500             could climb 40pts in the next 4 weeks (2%).

If a failure occurs which i believe is likely, SPX             could actually fall 200pts (10%).

Note: the config is very similar to july 2007... the market had rallied 18weeks and climbed 15%... plateauing for many weeks and pretending to breakout for 1 week or 2 before it fell 10% .... a repeat would not surprise me.

I I think it will fall. I want it to fall. let's see.

My two cents. Please see chart. Secondary indicators (RSI and MACD) are not looking good, but that does not mean market cannot keep going up (we all know divergence). The rising wedge exhausting point is $250. The market can go up 20% from this point on, or can go down 20%. Judging by the direction of 10 month moving average, the main trend is intact and is up. So I would suggest keep long the market as long as price is still above 10 month MA and above the main trend line. Only to short the market when the 10 month MA rolls over and price is under it and under the main trend line.

+2 Reply
...very ominous indeed. I agree with this hypothesis. I believe S&P is OVERDUE for a correction, but the FED/Media/Govt complex keeps finding new ways to pump it up.... US QE, EU QE, JPY QE, pushing OIL price down (that was an engineered leverage move by the biggest players).... but at the end of the DAY, everyone knows but is in denial of the fact that this is NOT a robust recovery. If that were the case, the FED wouldn't mean nearly as much to the market as it means... the market HANGS on every next word from the FED. This isn't a free market, it's a 95% owned market by the biggest players, and they move these prices up and down to suit their needs. Anyone who thinks the people at the top would allow FREEDOM to exist in the free market is simply, ignorant. The fact is this: in the 1800's, we abolished slavery... but that didn't abolish those attitudes... it emboldened them! Now those same attitudes enslaved everybody through economics... and the invented fiat currency so they could slowly steal the rug out from under everyone and get the populations over a barrel ... hence, slavery. The EU/Greece fiasco is JUST the beginning of the backlash that's coming... soon Spain, Italy, and many others... including those in the US that have not spoken out yet as disaster has not struck home quite yet... but it's coming. That's my two cents in a nutshell.

Live by the FED, die by the FED. There is a reason the TRUE patriots tried to abolish central banks from the beginning.... how soon STUPIDITY of the education system doesn't teach ethics, principals... it teaches how to be an automaton... F.A. Hayek simply said it best, to paraphrase, "the education system is designed to develop people that will serve the needs of the government."

The next big show to drop will be the Auto loans... just like in 2007 when we gave houses away at ZERO DOWN!!! BUY BUY BUY... we are doing the same with autos... 84 month, 96 month loans... these people will be giving up their cars left and right when the doody hits the fan.
+1 Reply
YaKa AndrewMills
you said it all...

a lot of great news in the last 6 months and.... market is flat at the top.....
+1 Reply
Waiting patiently....
To all of you: please have a look at the VIX 1st and 2nd contract - this is not the behaviour of a trusted breakout...
Hi, today's matket might extend higher due to Greece has requested for loan extension.
this chart tells me, there was no "real" breakup so far (could be still wave b), but it is very close, if break shold come, then vol needs to fall significantly and there will be huge price mark up (couple 10 pts.)

look4edge look4edge
and btw, according this chart spx is in status like in August 2006, still long way if break up will occur...
In any case:

fact: there is a breakout.

thought: all breakouts are not real. sep14 was fake, May11 was fake and more importantaly july07 was fake....

so the whole question to which there is no other answer than waiting is real or not..
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