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My X-Ray vision chart for the next 6 months

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May 23, 2010 – Comments (21)

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The stock market will most likely rally into earnings season which is coming up soon.  If the S&P-500 does not rally past the left shoulder resistance area (1,150), it will put in a right shoulder then probably keel over.  This is just my guess for what may occur in the next 6 or so months.  Being that the left shoulder is going to be put in, last Friday was a 'get long signal'. 

 

Charts don't lie.  Only people do.

21 Comments – Post Your Own

#1) On May 23, 2010 at 3:28 PM, patternpro (< 20) wrote:

agreed   nice chart.   also somthing else i took note of is if u look at the sp-500 on a longer time frame 15 yrs u can see that right around 1998-1999 we started forming what looks like a 10 yr large h/s pattern 1998 started the left shoulder 2007-2008 head and now we are right around the level of the left shoulder our last high for sp-500 was 61.8% retracement of the big move down. looks like a h/s on the right shoulder of a larger h/s pattern.   possible tip off who knows its somthing to watch though.

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#2) On May 23, 2010 at 3:37 PM, Superdrol (97.15) wrote:

The stock market will rally into earnings this June/July no question.  Apple can lift the whole damn market, lol.  They report in 7/21.

 

Big volume blow off last Friday, plus a reversal candlestick.  In the short-term this is a signal for me to get super long.  If we closed under I'd have gotten short.

 

If the earnings are good enough we can push past the 1,200 in the SPX highs.  The thing is there is tons of overhead resistance from this current market crash.

 

That's a good observation.  The top of the left shoulder is 61.8% fib retracement.  There's a lot of symmetry in the pattern thus far. The big volume Friday is not consistant with the development of the right shoulder, but at any rate, it still looks like a head and shoulders pattern.

 

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#3) On May 23, 2010 at 4:12 PM, MichaelMolenaar (< 20) wrote:

How do you get the get the enlarge feature? It would be useful for some pictures that I haven't been able to put up since they get warped by the formating.

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#4) On May 23, 2010 at 4:15 PM, Superdrol (97.15) wrote:

i use a flickr account so it somehow auto does the formatting.  

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#5) On May 23, 2010 at 4:29 PM, Superdrol (97.15) wrote:

 

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#6) On May 23, 2010 at 10:46 PM, Superdrol (97.15) wrote:

Check out these charts Port.

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#7) On May 25, 2010 at 3:40 PM, Superdrol (97.15) wrote:

I still think even if we rally, a close above 1,150 in the S&P-500 is what we need to continue upwards and take out the highs for the year.  This rebound off the neckline could be just putting in the right shoulder in the head and shoulders pattern.

Probably get a continued move up to 1,150 from earnings and the ECB.

Nonetheless it is by all means still tradeable.

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#8) On May 25, 2010 at 3:46 PM, Superdrol (97.15) wrote:

Apple's stock going into earnings long and release of the new iPhone is about as risk-free of a trade as there is.

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#9) On May 25, 2010 at 6:26 PM, Superdrol (97.15) wrote:

 

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#10) On May 25, 2010 at 7:49 PM, Superdrol (97.15) wrote:

Short-term bullish (1-3 months), long-term bearish (3+ months).  The reason why I think that the market is longer-term bearish is b/c of the macroeconomic issues that have been occuring (duh) are unlikely to be abated anytime soon.  Every PIIGS country will have its turn in the spotlight which gives the market plenty of time to gyrate up and down.

 

Also given the severity of the correction (or whatever you want to call it), it caught a lot of people off guard as well.  Plus it wiped out the entire year in just a few days (it seems anyway).

 

My case for bearish long-term perspective:

 

1.  Economic recovery has been appropriately priced in up until the high of this year.  The earnings coming from companies have been appropriately rewarded via higher prices.  The only thing that has probably not been priced in is the unemployment situation.  Possibly a decrease in it will give it a push.

 

2.  The 'bad news' has not been priced in.  Greece started to become an 'issue' per Feburary when the market dipped.  Also Dubai last year, but those were lukewarm issues at the time.  Now there is FinReg, Goldman Sachs/SEC, oil spills, PIIGS, Euro, EU, potentially terrorists attacks now in NYC, etc, etc....

3.  The violent plunge which wiped away 6 months worth of gains in the blink of an eye caught a lot of ppl off guard.  I took off some of my macro longs after the Goldman Sachs/SEC issue, but largely myself I was also unprepared and eventually sold all my macro longs after 1,184 support level was taken out with small losses.  There will be a lot of mutual fund, hedge fund, retail investors selling aggressively into up moves b/c it was very unexpected and very strong of a drop.

I don't think it will zip right thru like 2009 past all that resistance b/c those were 'give away' prices at that point.  Now majority of equities have been priced fairly given the data that has been released thus far.

There are too many negative catalysts to push the market lower vs. positive catalyst.  The only positive catalyst I can think of initially that has not been achieved yet is if unemployment drops to 9% or something like that.  Just a lower number. 

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#11) On May 26, 2010 at 1:06 PM, Superdrol (97.15) wrote:

If there is enough bounce a right shoulder may develop.

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#12) On May 26, 2010 at 5:36 PM, Superdrol (97.15) wrote:

 

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Market cannot seem to get any sustained traction to the upside.

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#13) On May 26, 2010 at 7:53 PM, Superdrol (97.15) wrote:

If I get a chance I'll also take a look at the other foreign primary indexes.  I don't follow them closely other than look to see if they are up or down and by how much.  That's about it. 

 

 

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Price action looks a little weaker than S&P-500 index. May have a small tag at resistance before also rolling over.

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#14) On May 26, 2010 at 8:13 PM, Superdrol (97.15) wrote:

 

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Hong Kong Hang Seng Index started their correction last year and looks to be making a bottom soon.

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#15) On May 27, 2010 at 6:36 PM, Superdrol (97.15) wrote:

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I photoshopped in some future candlesticks...haha

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#16) On May 27, 2010 at 7:09 PM, Superdrol (97.15) wrote:

 

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#17) On June 30, 2010 at 12:43 PM, Superdrol (97.15) wrote:

Just indulging in some self-worship here.  Had the market pinned down since May 23.  As easy as following the sqiggly line.  No fundamental analysis.

 

Look ma, no hands.

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#18) On June 30, 2010 at 5:16 PM, Superdrol (97.15) wrote:

I called it.  I've never been about modesty anyway.....lol

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#19) On July 06, 2010 at 8:02 PM, rodney15 (< 20) wrote:

haha i remember seeing this the day you posted it, good job man, what do you think the outlook is for the next few weeks to 2 months?

 

do you think the dow could test high 8000's low 9000's and S&P mid 900's? 

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#20) On July 07, 2010 at 8:23 AM, Superdrol (97.15) wrote:

thanks rodney-

 

Technically:  950-900.  Depends on how to measure the pattern

 

Fundamentally:  I've done my own analysis, plus I've asked 2 analyst, 1 hedge fund manager, and 2 finance professors and not surprisingly their estimates are all over the place.  I suppose it depends on the 'flavor of the day'.

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#21) On July 07, 2010 at 5:59 PM, Superdrol (97.15) wrote:

 

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Major resistance @ 1,119-1,100 in the S&P-500.  This is also mainly contingent on earnings which are coming up next week.  If things are good, then bear market/correction/whatever you want to call it is off.  That would be a substantial enough gain to guide higher.

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