NEW LOW

Yesterday's post confirmed . Targets will probably be reached. Wait for bounce and buy SHORTFUNDS. 1st SPX target is 1018.

Wait for CONFIRMATION

Yesterday ALL indexes showed a DOJI after a 5 day Downtrend, with the stochastics almost oversold. This looked like it might be just right for a turnaround........but that was just a guess & successful traders DON"T GUESS.!!! A BIG DOWN DAY today reinforced the DOWNTREND was still in force on LOW volume.
DO NOT BUY ANY LONGS UNTIL A CLEAR REVERSAL SIGNAL WITH CONFIRMATION!!!
All indexes are NEAR their yearly lows, with stochastics oversold, at the 100% RET of the 6/21 HIGH.
This could be W.C of ABC correction from APR 26 HIGH, in which case the most likely target is between 127%(1015)-162%(983) RET. This coincides nicely with the 38%(1015)-50%(962) RET of the entire advance from MARCH 2009.
This is also about equal to W.A DOWN 4/26/10 to 6/8/10 .

Market Direction is in the balance

Looks as if Right shoulder of Head & Shoulder is forming,which started in NOV of LAST YEAR. On a smaller scale we might be at the beginning of W.C of an ABC correction which started on 6/8/10. If this is a W.C the minimum UPSIDE is SPX=1130, DJIA=1515,
COMP=2330.

***NOT beginning of a W. C if INDEXES fall BELOW:

SPX< 1067; DOW< 10081; COMP < 2205

BUY SHORTFUNDS at any indication of heavy selling.

Upside Posible

SPX & DOW form DOJIs with daily STOCH close to oversold. Indications of UPSIDE bias next week. STRONG sectors are ENERGY, MINING, and BIO.

200SMA RESISTANCE

DOW & SPX have to BREACH 200 SMA for longs to be considered. Daily STOCH still in downtrend, breach of recent LOWS likely.

200SMA SUPPORT-BREAK

200 SMA BROKEN by both the DOW and SPX after Long-Legged-DOJI. This points to possible decline below RECENT LOWS. Purchased SHORT FUNDS.

PULLBACK

All averages pull back after reaching 50%-62% RET area, and below the 50 SMA. Either a pullback to 200SMA or Break of 50 SMA is to follow. Weekly STOCH are moving UP but Daily STOCH are pointing Down, so 3-4 day downside possible. 200SMA MUST support or much larger downside possible.

AVOID LONGS UNTIL TREND IS CLEAR AGAIN!!!!!

Upside bias remains

Triple witching Friday-------mostly flat day with buying into close.

SPX & DOW target is 50 SMA by next week. Daily Stoch overbought, so sideways movement with possible test of 200 SMA is possible within the next few days. Holding 4 Longs & 1 July option play.

June17,2010

200 SMA is support for S&P & DOW. Buying dips until short term goal of 1130 to 1150 on S&P is reached sometime next week..

April Highs should be safe for the rest of the year, but crazier things have happened.