Yesterday, the market held the 1016 SPX range I defined a few days ago, and quickly reversed back up. Tops take time to form. I used to look for tops, and try to short them WAY before it was time to, or not take my profits on the shorts when they did fall, because I thought… “this is the big drop coming.. finally we’ll pull back.” I still get caught. That’s what stops are for, but you have to take profits when you have an emini drop of 15 points in an hour and a 1/2. It’s only prudent. If you can turn, and go long on a reversal like that.. by buying a higher low pivot.. your trading game is getting better.
Ok enough rambling.
SPX has gone up 7 weeks since the last major pivot, and is facing an overhead trendline here. Watch for a possible sell off to 1000 SPX coming soon.. like next week.
Junk stocks like FRE are up 7 days since their pivots.
Anyone that’s read this blog a while, knows I look for reversals on the 7th candle. I could see this market dropping to below 1016 now, and then making a run for that 20ma on the monthly SPX. This top.. if it is a top.. will provide plenty of gyrations before we start what I think will be a slow grueling descent the next couple of years.
Watching and trading TYP, TYH mainly for market direction trades.
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