Today we looked at the SPY sell off that came about early in the morning just to hit my SPY 38.2% retrace target at 101.2 or so. That 38.2% retrace is also a 61.8% retrace from the July 2009 lows to the highs.
As soon as we hit 101.2, we knew there was going to be a momentum shift in the market. We believes the bears have done enough damage to be satisfied and willing to let the bulls get trapped as they try and retest the Head and Shoulders neckline on the SPY. The bulls will most likely break the 102.88 level (or 23.6% retrace since the start of the sell off the day before monday’s gap). They are likely to reach 103.88 and 104.70 and could reverse right around 104.70 after the restest of the H&S formation.
Today we bought also some GOOG calls as the GOOG hit the 50% retrace. We also look at GS, GE and AMZN (which retested 111 right at the end of the day).
Very interesting article:
http://www.businessinsider.com/be-careful-yesterdays-fall-could-signal-an-even-bigger-collapse-2010-6
Hey Idan,
You nailed the support level today with your 1012 SPX projection. I am glad I choose to follow your number as against mine (my chart gave me 1008) and locked in some good profits. Thanks for all the insights you provide on this website.
Well 1008 is actually right on the SPX.. but the SPY had 101.13… which was 1012… i rather unload at the more conservative target.. and load back at a more conservative target. But thanks a bunch