Let me start with this: All statistics indicate that the SP500 should rally back to top before year end.
- Statistically there is often a 2/4% correction in December followed by a rally that allows the month to be 1% positive on average.
- If Pavlov trading repeats itself, the 125d ema at 1982 could very well retain SPX and push back up like it did 7 times since December 2012.
After having done the classic wise analyst bullish disclaimer. Let me tell you what my gut feeling tells me:
- Going back up to kiss the capping line again is becoming obscene (giving more obvious shorts after longs take profit).
- All the analysis I was able to read suggests the market "should" go up. The market is still massively thinking the rally carries on.. and although many hedge funds are on the side line and are annoyed when the market goes up as it forces them to chase, it feels like the market is heavily long and hoping the Santa Claus prophecy will repeat itself again (for the 7th time in a row).
- Many people feel the market can't fall in the wake of an ECB QE.... The market has been doped by extraordinary measures for so long, could it collapse before the last injection?
What if: the market needed a large reset before it becomes clear that it will fall?
What if this surprise came as a breach of all obvious statistics as an outlier? A proper black swan.
Technically:
- Friday the market breached a simple support at 2020. Not good.
- The next support is 1980 (the Pavlov buy).
- Then the last resort buy is 1900. Below that, the market could be in free fall zone.
Solution:
Buy a lottery ticket: buy the 16Jan15 1800 put for 9.50
(more flexible than using the same as stop that could be taken away in 20minutes) and if there is a crash, you multiply by 15)
if the market climbs again, we will have excellent quality future shorts again and we can remake the 10points lost on the call.
Voila
- Statistically there is often a 2/4% correction in December followed by a rally that allows the month to be 1% positive on average.
- If Pavlov trading repeats itself, the 125d ema at 1982 could very well retain SPX and push back up like it did 7 times since December 2012.
After having done the classic wise analyst bullish disclaimer. Let me tell you what my gut feeling tells me:
- Going back up to kiss the capping line again is becoming obscene (giving more obvious shorts after longs take profit).
- All the analysis I was able to read suggests the market "should" go up. The market is still massively thinking the rally carries on.. and although many hedge funds are on the side line and are annoyed when the market goes up as it forces them to chase, it feels like the market is heavily long and hoping the Santa Claus prophecy will repeat itself again (for the 7th time in a row).
- Many people feel the market can't fall in the wake of an ECB QE.... The market has been doped by extraordinary measures for so long, could it collapse before the last injection?
What if: the market needed a large reset before it becomes clear that it will fall?
What if this surprise came as a breach of all obvious statistics as an outlier? A proper black swan.
Technically:
- Friday the market breached a simple support at 2020. Not good.
- The next support is 1980 (the Pavlov buy).
- Then the last resort buy is 1900. Below that, the market could be in free fall zone.
Solution:
Buy a lottery ticket: buy the 16Jan15 1800 put for 9.50
(more flexible than using the same as stop that could be taken away in 20minutes) and if there is a crash, you multiply by 15)
if the market climbs again, we will have excellent quality future shorts again and we can remake the 10points lost on the call.
Voila