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Most traders including myself know exactly how they were feeling in December 2011. The stock market was jittery and the uncertainties of 2012 were right around the corner. Citigroup came out with a research report calling for 975 on the S&P 500 when we were trading between 1170-1240.
So what happened on December 21, 2011? Uri Landesman, President of Platinum Partners, came on CNBC and predicted that the S&P would rally up to 1400 by March/April 2012. This was the greatest stock market call I've seen in years given the circumstances we were facing in December. Keep in mind, the consensus was for a very bearish start to 2012. The best call I've ever seen was the late Mark Haines who called the bottom of the 2008/2009 stock market crash on CNBC. This call has been known as the " Haines Bottom. "
Later on in the interview, Uri Landesman predicted the S&P 500 would drop back to 1100 sometime during the summer. We are well on our way to that target but let's hope he is slightly wrong on this one. To end out 2012, Uri predicts that we will rally back up near the highs and close around 1365 on the S&P 500.
CNBC needs to have Uri back on for a little chat!
200ma crossed on the chart. Yeah, SPX looks like short yo! Ughh!
Hmm. The 200 day MA is a range not a point. The SPX just made a 144 point move down, and might well be completing five waves down, around 1270ish (or 1250ish). Does that sound like time to short? The time to short was when TVIX got stuck in fudge around $6. I would say the next time to short would be when the market has completed three waves up and the $USHL is back above its own 200 day MA, or if we fall through support (confirming we are going to 1249 and then 1208). It's really not wise to short the market with the $USHL at -300, even if it will go lower to form a negative divergence. It's way, way, way safer to short it at +300. But we have to see how this plays out, and you might trade differently than me. Yes, obviously, the market has ultimate support around 1150 (or bottom trendline off last year's bottom) and just bellow 1100, for a potential double bottom. But I myself buy bottoms and sell tops (before the tops and after the bottoms), and am sidelines when I am unclear. But we are now entering a support range, not a resistance one.
So... I would simply focus on where we are not where we will or will not be. And the idea is to trade opposite sentiment, not with it.
It looks like there is major support between 1267-1278, next week is going to be interesting. We are due for one of those rip your face off rallies like we saw at the October 2011 low. The bears could not take it down anymore and they all covered at once with 30 minutes to go until the close. There is going to be major resistance between 1315-1330 from now on, maybe even starting at 1300-1309.
That's what I am seeing Lj - 1267 and then maybe 1250 - I used $USHL http://www.stockstobuy.org/forum/topics/stock-market-2012-where-is-...
Oh good, so I am not alone on this; we are all seeing similar figures (sort of like boys with beer goggles on). :) In any event, we could still drop to 1249 on this leg regardless of whether we dead-rat bounce or consolidate/climb at 1270, if we are in the midst of making a 43pt x2 measured move down from 1335 through the break of 1292 support, which is the neckline of last year's crash. But the fact is, even the guys in the video are not saying we make a lower low this year than last October if we ditch this support zone, and a higher low or double bottom would coincide with capitulation I imagine. So, even if we are headed to a low of year of, say, 1150, at present we are missing the retrace upward to strong resistance. And, truth be told, the RSI on the SPX weekly now is pretty much where it was Oct. 4, 2012 at last year's low. So... we are in fact approaching chop and slop support in the near term. And no doubt the machines will use this support.
As an aside, there is some serious disco being piped down the streets of Ft. Greene, Brooklyn today. It must be summer.
Did anyone hear about the SEC proposing a new rule for flash crashes?
The Securities and Exchange Commission has approved two proposals submitted by the national securities exchanges and the Financial Industry Regulatory Authority (FINRA) that are designed to address extraordinary volatility in individual securities and the broader U.S. stock market.
One initiative establishes a “limit up-limit down” mechanism that prevents trades in individual exchange-listed stocks from occurring outside of a specified price band. When implemented, this new mechanism will replace the existing single-stock circuit breakers that the Commission approved on a pilot basis after the market events of May 6, 2010.
The second initiative updates existing market-wide circuit breakers that when triggered, halt trading in all exchange-listed securities throughout the U.S. markets. The existing market-wide circuit breakers were adopted in October 1988 and have been triggered only once, in 1997. The changes lower the percentage-decline threshold for triggering a market-wide trading halt and shorten the amount of time that trading is halted. The exchanges and FINRA will implement these changes by February 4, 2013
Here is the new chart for halting of the overall market:
The $USHL analysis is really helpful, Tim.
Thanks, I've spotted some big reversals since I started using $USHL. What gets me confused is the fact that $USHL topped out in February when most market averages topped out in April. I guess there just weren't many stocks hitting new lows? I've had more luck using USHL on bottoms.