Friday, 20 April 2012

Something for the Bulls to sleep on

To conclude today, lets just end with the SP' monthly, which remains my favourite to highlight.

SP'monthly..(simple version)

In both recent cases where we had a red candle after a 6+ month run, the market pulled back considerably. In 2010 we saw the May-July fall - which included the infamous flash-crash. Last year, we saw a very consistent decline spanning 6 months.

The best - and most obvious 'guess' right now, assuming we are starting a new multi-month down cycle, would be the lower channel, currently 1100, and which by early autumn will be around 1125. Such a target is some 20% lower, and would make for some very nice gains for those who could actively trade it from the short-side.

Goodnight..from a rainy London