For those of us who have been trading a long time, S&P were called SPU's (sounds like SPOO) because the first contract was September and that means you use a letter U after the root code SP for S&P500 .
What I find interesting is when signs of EUPHORIA shows up in the price action and this time there are two of them, back to back. There is a smaller, third also. It is merely a price formation where stacking corrections take less time and have generally less price depth, so that the resultant mentality becomes "BUY THE DIPS" or "Hooray! Another dip to buy". When making money becomes this robotic, then likely something very different is about to happen.
What also happens is that "sell stop" orders can accumulate under previous correction lows and then a short, sharp correction ensues.
The longer term forecast I had published near the beginning of the year forecasted the market to move sideways to higher for the year, so this forecast is tempered by that longer term structure. Of course, any guess is just a guess and my ego is not involved in this analysis. I am only offering a vision into the setup that I see in place in the market and the path of least resistance that lies ahead for the stock market. I hope we can adjust our positions to profit from this pattern setup.
All the best,
1:57PM EST Wednesday, June 5, 2013
Enough "contrarian theory" for now. I did want to just state that we certainly are at a dangerous level for the market given the very low RETURN ON ASSETS of the stock market at current levels. The sluggish economy despite the global money creation by central banks is astonishingly disappointing on a collective, global scale. The "free money" from "selling Japanese Yen and buying Australian Dollars" is over as that trade has collapsed in grand fashion.
Where do we go from here... sideways to down... to catch up to my sideways to up forecast from earlier this year...
9:20AM Monday, June 24, 2013 Eastern Standard Time