Technical Tuesday – Failure At 2,035 On The S&P

Wheeeeee, what fun!  

As noted in our Weekend Portfolio Review, we are in CASH!!! so we really don’t give a crap which way the market goes.  Despite having plenty of long positions (short puts in our Long-Term Portfolio), we’d be thrilled to actually get to buy the stocks cheaply and we’d also be thrilled to do a bit of bargain-hunting if we get another nice dip – so that’s what we’re rooting for.  

As you can see from Dave Fry’s SPY chart, yesterday’s move was, as we predicted in the morning post, complete and utter BS and, in fact, declining volume outpaced advancing volume on the NYSE by 50% in an “up” day. This is classic end-stage manipulation – try not to fall for it!  


2,035 on the S&P is, of course, the 10% line on our Big Chart. That means it’s no surprise that we’re getting rejected here and the run-up was from 1,850 so that’s just under 200 points so we’ll look for a 40ish-point pullback to 2,000 and holding that would be bullish but a fall to 1,950 would be bearish again and anything below that signals we’re probably going to be seeing 1,850 again:

It’s useful to have a magical chart that tells us what’s going to happen before it does. Thanks to our fabulous 5% Rule™, we’re usually able to stay well ahead of the markets and we’re also going be watching 4,925 on the Nasdaq, 10,450 on the NYSE and 1,180 on the Russell as potential rejection points and the Dow is already in a dead zone at 17,200 so that’s the bull/bear indicator of the moment (whichever side it’s on).  

While we are waiting for market clarity, we’ve been cashing in on our Futures trades.  In last week’s Live Trading Webinar, we went long on Natural Gas (UNG) Futures (/NG) and this morning we closed out our /NGX5 (Nov) contracts at goal and let our Dec contracts ride. As you can see, we did quite well with the trade but we’re expecting to do even better on the December contracts – now trading at $2.68 off our $2.6515 entry. Our goal is $3, so that’s still 0.32 to go at $100 per penny, per contract if all goes well.  

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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