in case you are interested:
Good morning,
There is a rally coming and it could come today or it could come as late as Wednesday. This will be the final rally of the year, or at least into October. I urge you to have patience here, irrespectively if you want to play a rally towards 9800 in the Dow or 1023 to 1041 in the SP500 on the long side or if you want to wait to go short. Most cycles suggest that we are seeing a replay of the 1987 pattern where the market rallied relentlessly for most of the year, and saw the final high in August. I am playing for a high around the 20th to the 26th of August. The rally may even extend into Labour Day on the 1st September. The key to get this rally going will be a close above 1005 in the SP500.
I am quite certain we will see a blow-off rally and I am also quite certain we will see a big retracement in September. The break may already have started but I don’t give that a high probability right now.
What usually happens after an option expiration is that the big pension funds and mutual funds have to protect themselves against declines by buying portfolio insurance in the form of put options. This always causes volatility in the days after the expiration and you often see big moves in that period. The path for today, points to a higher open and a general bullish day up until 16:30 UK time. From the on the bias is negative. I don’t know if this will simply mean that we trade sideways or if we will get a negative close.
So I will watch the 993 closely today in the SP500 as it is a big resistance area, and any move above it will most likely lead to an assault on 1000. If we break to the downside I will watch 985 for confirmation. The trend after the first 50 minutes today should confirm which way we are going.
Good morning,
There is a rally coming and it could come today or it could come as late as Wednesday. This will be the final rally of the year, or at least into October. I urge you to have patience here, irrespectively if you want to play a rally towards 9800 in the Dow or 1023 to 1041 in the SP500 on the long side or if you want to wait to go short. Most cycles suggest that we are seeing a replay of the 1987 pattern where the market rallied relentlessly for most of the year, and saw the final high in August. I am playing for a high around the 20th to the 26th of August. The rally may even extend into Labour Day on the 1st September. The key to get this rally going will be a close above 1005 in the SP500.
I am quite certain we will see a blow-off rally and I am also quite certain we will see a big retracement in September. The break may already have started but I don’t give that a high probability right now.
What usually happens after an option expiration is that the big pension funds and mutual funds have to protect themselves against declines by buying portfolio insurance in the form of put options. This always causes volatility in the days after the expiration and you often see big moves in that period. The path for today, points to a higher open and a general bullish day up until 16:30 UK time. From the on the bias is negative. I don’t know if this will simply mean that we trade sideways or if we will get a negative close.
So I will watch the 993 closely today in the SP500 as it is a big resistance area, and any move above it will most likely lead to an assault on 1000. If we break to the downside I will watch 985 for confirmation. The trend after the first 50 minutes today should confirm which way we are going.
