Top of Price Channel, What's Next?
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Its been a week and the market continued to play out what I said last Tuesday, which is the intermediate pullback scenario. Some questionable economic data did support this pullback but they are so questionable or inherently so volatile that I won't give credit to them for anything more than just an intermediate pullback (or pullup for those who prefer this term).
However, the SP-500 is once again at its 50MA, which is intermediate support/resistance for most of its trends. On top of that, it is also the top of the sideways price channel established early in February. The question that begs answering now is, whether or not the SP-500 would do what it did last October, breaking through the top of the price channel and its 50MA into a significant short term bull trend?
Looking at the insides, the total equities put call ratio did display the same tendency it did last October 7 when the SP-500 broke out, moving in favor of call options trading. However, investors were less enthusiastic this time round as bond yields barely budged today while on 7 October just before the break out, investors were pouring into equities, causing an observable rise in the bond yields. As such, things are getting very iffy at this point as investors are less confident about the market now than back in October when people are still thinking that this is nothing more than an intermediate correction.
At this point, it is already too late to be long and too risky to be short. I would rather sit and wait for the next clear bearish reversal signal as that would put me in the high probability winning zone in such a bearish market framework. Are you ready to profit with me when that happens? Join my Master's Stock Options Picks Service now!
Market Crash Timer: RED
For now, the market remains in short term bull trend within an intermediate and primary neutral trend.
Its been a week and the market continued to play out what I said last Tuesday, which is the intermediate pullback scenario. Some questionable economic data did support this pullback but they are so questionable or inherently so volatile that I won't give credit to them for anything more than just an intermediate pullback (or pullup for those who prefer this term).
However, the SP-500 is once again at its 50MA, which is intermediate support/resistance for most of its trends. On top of that, it is also the top of the sideways price channel established early in February. The question that begs answering now is, whether or not the SP-500 would do what it did last October, breaking through the top of the price channel and its 50MA into a significant short term bull trend?
Looking at the insides, the total equities put call ratio did display the same tendency it did last October 7 when the SP-500 broke out, moving in favor of call options trading. However, investors were less enthusiastic this time round as bond yields barely budged today while on 7 October just before the break out, investors were pouring into equities, causing an observable rise in the bond yields. As such, things are getting very iffy at this point as investors are less confident about the market now than back in October when people are still thinking that this is nothing more than an intermediate correction.
At this point, it is already too late to be long and too risky to be short. I would rather sit and wait for the next clear bearish reversal signal as that would put me in the high probability winning zone in such a bearish market framework. Are you ready to profit with me when that happens? Join my Master's Stock Options Picks Service now!
Market Crash Timer: RED
For now, the market remains in short term bull trend within an intermediate and primary neutral trend.
posted by Jason Ng at 4:54 PM
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