Next week is window dressing and maybe we get a rally after more brutality the next 2-3 days, but then again we may not.
We finally took out the 20dayMA yesterday, and that's the first time since mid March:
As you can see, bulls have to be very careful in the short and intermediate term, as we are very close to the 50dayMA and could take it out any day.
My take is that we will eventually fall through the 50dayMA and heads towards SPX 850 as first target this summer. For fibonnacci retracement lovers, SPX 850 represents the 38% retracement level from the beginning of the march rally to the june top.
The problem is, at SPX 850 the 50dayMA line would have already turned downwards and the 20dayMA would have crossed below the 50dayMA. This gives bears significant advantage to take us even lower towards late summer to fall. I am not in the camp that believes we go below SPX 800-850, but you never know.
Please hedge your long portfolio (if you have one) or reduce equity exposure and get rid of margin at this point. Have some cash to buy stocks because they will get cheaper.
It looks like the commodities and things like fertilizers are in trouble here. Any bounce can be shorted. The US dollar looks like it has bottomed and usually moves inversely to commodities. I have UUP july 24.00 and sept 24.00 calls as a hedge to my portfolio. I don't usually trade options (and don't recommend it) but I do buy them once in awhile as hedges. Besides, UUP is such a slow mover you almost have to trade the options. I am also short POT.
*Trend analyze SPX (or any other stock) here for free
**Get the most important book you will ever read about the stock market.
We finally took out the 20dayMA yesterday, and that's the first time since mid March:
As you can see, bulls have to be very careful in the short and intermediate term, as we are very close to the 50dayMA and could take it out any day.
My take is that we will eventually fall through the 50dayMA and heads towards SPX 850 as first target this summer. For fibonnacci retracement lovers, SPX 850 represents the 38% retracement level from the beginning of the march rally to the june top.
The problem is, at SPX 850 the 50dayMA line would have already turned downwards and the 20dayMA would have crossed below the 50dayMA. This gives bears significant advantage to take us even lower towards late summer to fall. I am not in the camp that believes we go below SPX 800-850, but you never know.
Please hedge your long portfolio (if you have one) or reduce equity exposure and get rid of margin at this point. Have some cash to buy stocks because they will get cheaper.
It looks like the commodities and things like fertilizers are in trouble here. Any bounce can be shorted. The US dollar looks like it has bottomed and usually moves inversely to commodities. I have UUP july 24.00 and sept 24.00 calls as a hedge to my portfolio. I don't usually trade options (and don't recommend it) but I do buy them once in awhile as hedges. Besides, UUP is such a slow mover you almost have to trade the options. I am also short POT.
*Trend analyze SPX (or any other stock) here for free
**Get the most important book you will ever read about the stock market.