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Walt Downs wrote:
>
> bobrabcd@xxxxxxxxxxx wrote:
> >
> > Walt, I think it would be interesting if you would interpret the attached
> > chart of the SPX with your FEAR indicators applied.
> >
> > Thanks,
> > BobR
>
> Bob,
>
> I would be happy to. :)
>
> In starting, lest there be any confusion, the numeric values you
> see at the top of the chart are NOT the price plot values.
> What you are seeing are some of the ratio calculations.
>
> 1. ) As can be expected in a runaway bull market, the larger specs
> (RED and YELLOW) are leading the way.
>
> 2.) Notice, that in the run up, each time the CYAN (SmallSpec) line
> touched or crossed over the RED or YELLOW plot, there were small
> market retracements. The little guys were either taking profits or
> being consumed by the market.
>
> 3.) We have had two retracements to the RED plot, with the second
> being deeper than the first. This would lead me to believe that the
> next time we get several bars whose ENTIRE range is under the RED
> PLOT , we could be seeing a market reversal.
>
> 4.) Today was a nice reversal as the FEAREnv denied higher prices.
>
> 5.) Is today's close below the RED plot the start of a BEAR run?
> I don't think so. Look for the large concerns to keep the market
> "pinned" near the FEAREnv until the July options expire. (7/18)
> Start watching HARD from 7/16 on.
>
> 6.) Look for the following set-ups in the days to come:
>
> Prices trade to or slightly penetrate the FEAREnv and:
>
> a. ) The YELLOW plot moves below prices and the FEAREnv, while the
> RED and CYAN plots rise slightly and start to "flat-line".
>
> b. ) The YELLOW plot remains high and the RED and CYAN plots
> converge on it, and all three begin to flatline.
>
> Under these scenarios, aggressive traders can SELL the FEAREnv,
> and others can start selling when we get a close BELOW the YELLOW
> plot. Once again, anytime we get several full bars under the RED
> plot, I will be very tempted to SELL anything that gets near the
> RED plot again.
>
> To conclude our analysis of the current SPX situation, let's look
> at some historical/seasonal considerations:
>
> Statistically , the end of JULY has usually been very strong.
> This lends itself to another bio-neural concept I call "COUNTER-
> TRADING". The concept is simple: Find a system that has a lot of
> people trading it, take a look at how the market is taking them
> out, and trade THAT.
>
> The SPX situation looks very juicy to me, because near the end of
> this month, you are going to have a TON of people piling in to the
> market on seasonal (sure thing) trades. If you profile the average
> seasonal trader you will find that, sadly, they are often first or
> second time traders, that are betting the ranch. It will be the
> "pros" vs. the beginners. When pressed, these traders will tend
> to hold too long, and panic quickly once they reach their maximum
> fear thresholds. The market action that will indicate the beginning
> of this phenomena, will probably start around 7/22. Look for a
> small dip followed by sharp buying, and then a SHARP decrease, as
> the pro's start to pressure the positions. When the market has
> moved down from the buying peak the equivalent of the margin it
> takes to hold 1 SP contract, look for further sharp selling, as
> the seasonals fold up.
>
> Well, Good trading!
>
> walt :)
>
> ---------------------------------------------------------------
> >
> > Name: FEAR SPX.gif
> > Part 1.2 Type: GIF Image (image/gif)
> > Encoding: base64
> >
> > ---------------------------------------------------------------
Walt and All,
My planetary shows almost exaclty what Walt has described. I am
calling this the Goldilocks market. You see, Goldilocks is in the
3 Bears' house while they are out talking a very long walk in the woods.
Everything is JUST RIGHT for Goldi. In fact everything is so good for
Goldi, she has sort of moved in with all her paraphenalia. Goldi is
very comfortable there. but she is also, shall we say lonely? The
planets say that Goldi will satisfy here lonliness in a dramactic
fashion
with a climax due circa July 25-28. Then, suddenly the 3 Bears will
return and surprise Goldi. Oooh My!! See Goldi jump out of the top
window of the Bear Cottage. Aaaaaaaaahhhh!!!! See Goldi run!!
It's not a pretty picture......unless you are a Bear. <g>
Barely,
Norman
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