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SPX Pullbacks Are Volumeless, Stay the CourseTraders have seen this before, and it continues to play out as the global economic climate breaks down. Although these pullbacks in the SPX are often lofty and swift, it is important to realize volume is the most import factor when considering the validity of a pullback. Here , we can see that the move in SPY is volumeless. The entire squeeze from the Feb. 11 low has seen volume under the 20-day average. On balance volume is not supporting this move. Next, when deciphering a mere pullback following a steep decline or an inflection point, think what is the "smart money" doing? Simple. They've been selling to the dumb money for the last five weeks . Corporate buybacks continue to be the only demand in US equities. Fundamentally, the index is highly expensive versus historical valuations. At a 21.79 P/E, the SPX is over 5 points over its mean. It's over 11 points higher that the "sweet spot." Shiller P/E, which tracks 10 years of inflation-adjusted earnings, is at 24.98 (also, historically expensive outside a recession). Furthermore, earnings are, indeed, rolling over (along with the business cycle) while real earnings growth is cratering at -14.5 percent. Last time that happen, the US saw a recession in the early-90s, the recession following the tech bubble and the 2008 financial crisis. See that here ! Aside from there lack of conviction with permabulls being scooped up in buyback fever, the index is about 160 points of its most recent low. Yesterday, price action closed at daily resistance at 1,978 and near the 50% Fib. level from this years epic start. If it can close above these two levels, the next level that is key is 2,020. If bulls overtake this level a potential retest of 2,071 is probable. However, this is how I believe it will go as the dollar continues to strengthen and the Fed continues to be out of place: A bear market scenario like those that followed the tech bubble and financial crisis would put the SPX near 1,078. This year, we've also seen SocGen's Albert Edwards forecast a potential 75% decline for the broader index. 17 months ago, I published a chart showing a whopping 71% potential decline in SPY from then current levels . Granted, this was merely based on historical references and calculation, but interesting nontheless. Will you get a chair when the music stops? Please feel free to comment and share charts! And follow me @Lemieux_26 Check my posts out at: bullion.directory www.investing.com www.teachingcurrencytrading.com oilpro.com
SP:SPX
by CommoditiesTrader
6
INVT Contract WinInventergy Global Inc. has formed a bowl bottom and is retesting a key level of resistance at 1.89-1.90. We have a bull flag on the right and the price is above the yellow 13 day exponential moving average (EMA) which is a very bullish sign. INVT released a press release that will serve as a catalyst for the long side. They get to clear their balance sheets and they dont owe Panasonic a guaranteed payment for their patents. Heres the link to that press release- us.rd.yahoo.com Long at break above 1.92, we can possibly see 2.50 in one day, this is a low float stock that has rallied before, I recommend using less capital as the price swings are above 10% in one day. If you have etrade, schwab, td ameritrade etc. - use their trading platform as tradingview.com fails to load small cap stock price action and charts.
ILong
by YusufS
Russell 2000 Looking for Lower GroundThe Russell 2000 boasts a whopping 89.27 P/E ratio and a dividend ratio of 1.36 percent. There actually is sometime that pays less than a US 10Y (for now). Seemingly an index that is traded off of technicals, traders could see today's rapid pullback as the beginning to a larger correction. After a double-doji top, the Russell 2000 could not expand upon all-time highs (NASDAQ is next). Price action on the daily chart was nicely confined within an ascending channel before breaking through and quickly topping. Noticeably, price action formed an ascending wedge. This is a bearish reversal pattern. I began noticing that assets that were out of vogue, like gold and silver, were presenting descending wedges while those favored are looking toppy and forming ascending wedges. I digress. Wedge support will be the most likely support level near 1,227, while price action will see 1,220 where price action and the 50 EMA (currently) is holding up. Ultimately, the Russell 2000 can see sub-1,200 in mid-to-late April. Record accumulation looks to start seeing a period of distribution, and price action is switching from bullish to bearish.
RShort
by CommoditiesTrader
5
Broke down back into previous resistance zoneOn the this week's Weekly Markets Analysis newsletter, I've mentioned that 120 is a crucial level in $IWM marketzone.tumblr.com Today, $IWM broke down back into previous resistance zone and closed below 120$. If the price will stay below that level, it could be a major bearish sign for the Russel. The only thing separates $IWM from falling apart right now is the daily 200 SMA line. If you'll check the 4H chart, you'll see that today's gap down was basically gapping down below the 4H 200 SMA line - Another bearish sign. Still, we have a long week ahead of us.. but keep an eye on 120$ and 119$ (the zone's borders) - A breakout or breakdown of this zone could signal the next move's direction in $IWM Subscribe to the Weekly Markets Analysis : www.themarketzone.net
AMEX:IWM
by themarketzone
4
Testing broken resistance - Will it hold? $IWM had a nice reversal over the last trading week, which I've i traded successfully (special alert letter was sent to the Elite Zone members - Become an Elite Zone member - www.themarketzone.net) Now $IWM is facing the same resistance it broke during February and it should act as support (if it wasn't a false break) 120$ is the crucial zone to monitor this week Read the full analysis and more in this week's Weekly Markets Analysis newsletters: marketzone.tumblr.com Subscribe to the newsletters: www.themarketzone.net Send your charts requests over the weekend: themarketzoneforex.wix.com
AMEX:IWM
by themarketzone
1
Russell 2000 - Small caps going lower?For something on a longer time frame, here's one that I see playing out. The small caps have been diverging from the main indexes for some time now failing to make any new highs. In fact, it just broke through a multi-year trend line from 2010. It is looking very weak on the weekly chart with an obvious RSI divergence, I think it is letting out some air and I would be careful if you're long here. If you're looking to short this, I would really recommend waiting until it retest the multi-year trend line from underneath (first bounce back up to white line).
AMEX:IWMShort
by ZDRuX
Small Caps Lead Into a Recovery, Also Lead into a RecessionThe Russell 2000 has seen strong moves to the downside, as market participants wonder whether or not there is a market top in place (regardless of what CNBC says), Price action is in an important place, resting on an ascending trend line created in mid-June. A break (with a retest and rejection of new resistance/former support is best) would iniate a short position targeting 1,100 over the next couple months. We are likely to see the more riskier equities decline as the Fed "finishes" the QE taper in October, which will likely mix sentiment among traders. The Fed's vague, nonsensical policies will play an important role. If support holds, a retraction could be seen to a secondary descending trend (dotted).
RShort
by CommoditiesTrader
1