FX:SPX500   S&P 500 index of US listed shares
744 7 13

Upside limited to 2%.

Another touch on the upper line would be too obvious/perfect.

If a touch was to happen, it would be probably a trap and it would go higher.

At P/E of 20, there no real reason to have this asymptotic rally and the local data is not supporting it.

Conclusion:
- it may wise to factor non multi completion to the top line.
- If SP500             manages to close 2040, it may open down.
- If it opens down, there are 2 targets:
(1) 1900ish
(2) 1700ish

Adverse scenario:
SP500             reaches 2150 but is very likely to come back here.

Strategy:
short 30% here at 2107
short 30% at 2150 and remove 30% at 2128...etc...

Time Trading
Once the move down is launched (that requires a close below 2040 in weekly), count 4 weeks from the top.
July07 correction: 4 weeks
Aug11 crash: 4 weeks.
zhou.zhaofan
2 years ago
Thanks for your chart. But can you explain what do you mean by "July07 correction: 4 weeks", "Aug11 crash: 4 weeks", thank you very much.
Reply
YaKa PRO zhou.zhaofan
2 years ago
Sharp corrections have a tendency to last 4 weeks max before intermediary rebounds.

-That was true of the Jul07 correction which lasted 4 weeks and ended mid aug07
- That was true of the crash of Aug11 that started the 7Jul11 and ended the 8th of August.

So for sharp corrections, i have look for windows of 4 weeks.

BTW: when a corrections is launched, if it manages to last 4 weeks, i seriously start to look for reversals.
BTW: that was also true of the last correction in Oct14. from 19sep to 14oct...

Time is more constant in patterns than price progress.

Reply
BobbyBlueShoes
2 years ago
YaKa, where do you get PE 20 from? I have not seen anything this low in any of the info I have been reading.
Reply
YaKa PRO BobbyBlueShoes
2 years ago
where did you get it from.
PE is subject to methodology.
I take the spot PE:
Earning 105
Price 2100
PE: 2100/105 = 20.
Reply
zhou.zhaofan BobbyBlueShoes
2 years ago
actually you can google it
Reply
YaKa PRO
2 years ago
I very much like this chart: http://www.macrotrends.net/chart/1324/s-p-500-earnings-history
it shows sp500 adjusted for inflation when looking back and the Earnings on the same chart.
As you can see:
- SP500 is just marking a new top versus 2000 and 2007 was a lower top.
- The pricing is similar to 2007 in PE terms.
- In 2007 earnings marked there top in Mar07 a few months before the SP500 did in price.
- Here the earnings may have marked their top in Aug14... Gudance is not that great.. they could start to fall on the next earning batch.
Reply
BobbyBlueShoes YaKa
2 years ago
Ah, I see. Yours is based on trailing EPS. I was looking at PE with forward EPS based on recent earnings season.
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