Friday, May 9, 2014
Picking tops isn't much fun. Even when you find a zone likely to cause a reversal, the market will stay in that zone for a few weeks to a few months just to mess with you. I have been out of long positions, except for a few scalps here and there, since March. At that point I put the giant, red down arrow on the website. Since then we've just chopped around.
On the weekly chart above, you can see the SP-500 has been respecting the 50% fib fan since 2012. Every time it has touched this line a pullback has occurred. We are also within the range of 3 fib extension confluences from 1892-1954. I expect that at some point within this area the market will finally give up and drop to at least the 61.8% fib fan. If this line provides support we should look for highs up in the 2200-2400 range to come. If it fails to support the drop, I will conclude that the long term trend has changed to down and remain short.
Pointers: I am taking no long positions on the SP-500, at all.
Posted by James Genosky at 6:18 AM