I’ve read so much criticism of technical analysis, chart patterns and harmonics lately that I’m taking the opportunity to crow about today’s results. Our intraday calls on SPX delivered our best single-day results ever: 4.8%.
From today’s post: What Next?
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At the open:
SPX’s upside targets today include a backtest of the .618 [Fibonacci level] at 1940.63, followed by a close of the gap at 1970.89 [note: though charts indicate SPX opened at 1898.08, we use 1919.02, which was the low at one minute after the open — by which time all purchases should have been made.]
SPX has successfully backtested the .618 — the first potential turning point. If it reverses here, then the .886 at 1856.46 is on the table. If not, then we should see a continuation up to close the gap and potentially backtest the bundle of key Fibs and horizontal support at 1980ish. I’d take a shot at a short, but keep an eye on USDJPY and NKD for signs of a reversal.
USDJPY threatening to break above 120.11. It was enough to send SPX through 1940.63, so we’ll abandon the short and revert to the long side with the next upside target being the gap close. Be aware, however, that neither USDJPY or NKD has truly broken out — merely threatening. So, we could be reversing this long position at a moment’s notice… Above [1940.63], the target is 1970.89. Below it, the target is 1856.46. Follow USDJPY and NKD for indications.
NKD and USDJPY’s patterns broke down, and SPX’s move above 1940.63 proved to be a head fake. Per our 11:14 update, this called for a short position.
Quick update… NKD is bouncing (for now) on the rising TL, while USDJPY broke down from and is backtesting its channel. SPX has reached 1920 so far. [A trendline from yesterday’s lows] could provide support at 1887ish around the end of the day, with a gap down to 1856 in the morning. A drop straight to 1856 today would be cleaner and neater, but things are rarely that simple these days.
SPX has reached the rising TL and is approaching the .886 Fib. Looks like it might just close at or below 1887.87 as we discussed earlier. Next lower support, again, is 1856.46.
For anyone who can’t hedge overnight, I’d either take profits here at 1879 and go to cash or put in a trailing stop into the close. Still looks like it has further to go, but will we get there in the next few minutes? If you can hedge overnight, I think it’s fairly likely we get to 1856 in the morning.
SPX closed at 1868.14, a full 72 points from where we shorted at 1940.63. And, of course, 1940.63 was a 21-point gain from 1919.02. All in all, it was a very cool 93-point (4.8%) gain.
It’s even more cool considering it happened on a day when folks who don’t believe in chart patterns, harmonics and technical analysis were running around with their hair on fire. Well, not literally we hope…
Last, a special congratulations to any new of our new members who put at least $20K to work today, following our market signals. You’ve paid for the next year’s research on the first day! *
* my lawyers would want me to remind you that this sort of thing isn’t the norm. We’re only averaging a little over 13% per month so far this year.