Sunday, July 10, 2011

SPX Full Report Week 11-17 July 2011

I`ll follow Report of last week 1/07/2011 Still valid and make sense for now.
This update have 4 charts that explain what can we expect for the next weeks.

**** Chart 1/4 ****

Market stil trading in large range past 6 monhts [1270-1340] with some exceptions (false breakout level).
May highs market break 1341 but unable to break and hold above false breakout area 125% to 137% reversal*.
And reversal* above 125% but below 137% extension and returned to within the range... end of the history, range still valid.
Remember chart 2, window [1359,1361] mkt for now remain unable to close above, so bears still having some chances that call to last high (1370.58) top done no more dipp mode= POMO bla... bla.. bla...

I suspect last week 1/07 that reversal or pullback was very close to happening looking to performance of the last months.
This friday after NFP pre-market session market reversal quickly and "reversal between 1345,1355 (like we suspect) spx open gap down ( island reversal).
Test first key suport level 1332 at 60 minutes chart hold and at close reject close below 1340 (returned to within the range) close today 1343.80.
If you remember i posted last week "expect reversal between [1345,1355] at least to test [1300,1315] middle of the range 1304",

Next monday bears need to reversal below 1352, perfect open around 1346 or below, to attack again [1330,1332] key suport area 60 minutes chart.
Below 1330 open the door to test key suport area daily chart [1300,1315]
But remember bull still in control and a break and hold 1352 will give us another signal that test 1356 ( last week highs) just a question of time.
Breakout 1357 open the door to test [1378,1384] next key resistance area before 1400...1415 and 1440.
Next Monday before July expiration, Dow up 6 of last 7.
Bearish formation head shoulders pattern ( posted 01/07 report) remain possible but probability are lowers of that happening.

*** Chart 2/4 ****
 - Open Your Mind -

This mkt isn`t overbought - Bull Market Remain Intact market can break all  resitance to new highs above 1370. what can we expect...
Close daily above 1370 next resistance minor, area [1378,1384] above trg [1400,1415] possible extension to 1440 ;
Close above 1440 expect 1500 and later all time highs;
If unable to close above 1440 expect reversal at least to test [1370,1350]
Bearish scenario short-term market reversal below 1370 or below 1384 break 1340 and 1290 and test/reversal at 1260 again or at 1220 next 1440.

**** Chart 3/4 ****

Strong bounce last two weeks after hold lower band of the range...
Overbought conditions/Unable to close above window!!?
Potential scenario... We will know later...but ( homeworking done for now)..
I don`t expect new highs next sessions ( above 1370.58) for now.
I expect the same scenario April 2011,unable to close above window 1359.76, reversal to test at least 1315.

Remember the Rule false breakout... False breakout is valid if price unable to close above higher band of the false breakout137% .
Area of false breakout is 125% to 137%. Can use to any time frame.

****Economic Event - Important ****
 Lots and lots of economic data and options expiration as well.
- Trade deficit is released.
- Export/Import prices
- Budget deficit,
-  FOMC minutes.
FED chairman Bernanke gives his semi-annual monetary policy testimony to Congress
- Weekly Jobless claims,
- Retail sales,
- PPI and Business inventories.
. Options expiration,
- Industrial production
- Consumer sentiment

60 minutes