Monday, February 14, 2011

SPX futures read

Working with a weekly chart of the ES (using TOS charts) the market has pushed itself out of a huge Fibonacci cluster that dated back to the 2003 lows. For 18 months the range was essentially 1000 to 1235. It looks like the market is ready to explode to the upside. The rational of QE2 seems to finally be understood. Stocks will inflate in price to adjust to the cost of money. I will comment about inflation and stock pricing later in my next post.

My targets on the ES. The market seems poised for a fast move.

Speculative Target # 1 is: 1346.42 is the -23.6 pct Fibonacci from March 9, 2009 to the first intermediate top at 1216.75 on 4/26/2010. Typically the -23.6 is a tough one to get by. It really would not surprise me if by op-ex (this week) that # was met and a 6 week pullback was initiated starting the next week after op ex. The most logical place to buy again would be 1235. The 50ma is now at 1250 and rising- so a dip below the 50 would get everyone scared - and the bears looking for blood but 1235 is huge support. Then most likely a push to 1426.82 (-38.2pct Fibonacci) and then 1491.8(-50pct Fibonacci) where I think the market will have started to stall. I think another 18 month duration 235 point type range is possible that will coincide with the 2012 elections. From there I have no idea - I do have projections into the plus 1700 area but it is way too early for that.

Speculative Target #2 : 1346.42 is just wink and nod as the bulls drive this to 1426.82 there I think it is a hard stop- and a longer time frame pull back to the same # mentioned above. Then I think we stall out and grind around 1300. After the grind period, if the buyers don't come back to bust up over 1600 into new highs I might be a little nervous into the election as I think something has changed. Have interest rates risen drastically to combat inflation? Is there an international conflict? Perhaps more domestic terrorism. Something won't be right, the market isn't going higher and risk may start to leave the market.

Speculative Target # 3: The market has never heard of almost blogging and is going to that big 1790.00 in the sky. I will be left behind looking for my 1235.

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