How About a Trip Down to 847?

The SPX has a potential head-and-shoulders pattern on its intra-day chart (click to enlarge):

spx-4-30-09

Blue line L1 measures from the head to the neckline, and blue line L2 projects that same length down to the price target at purple point “A” near 847. Following the purple line to the left from “A”, we arrive at purple point “B”, which just so happens to be the panic low from Tuesday morning – the den of fearless dip-buyers.

So, if the market wants to dive tomorrow, I will be looking for 847. Don’t forget that with an H&S pattern, you want to see a surge in volume as the neckline is penetrated. Until that event, it is not an H&S, but just a bunch of squiggles. (You can look at SPY for the volume). Also, with the neckline so close at 868, it is possible for the market to gap right under it at the open.

6 Responses to “How About a Trip Down to 847?”

  1. admin says:

    The futures bounced a few points around 5:30pm when the Senate shot down the “cram down” amendment:

    http://www.forbes.com/2009/04/30/mortgages-cramdowns-senate-business-cramdown.html

    Banks may benefit tomorrow.

  2. Randall says:

    Yeah, but what happens when China cancels our credit card?

    http://news.yahoo.com/s/afp/20090430/pl_afp/financeeconomyuschinabonds

  3. Dressguard says:

    How about a trip up to 900? Futures are GREEN!!! Green shoots everywhere!!! This is madness! No, this is Wall Street! :mrgreen:

  4. Yerk says:

    Some stimulus weed shoots:

    China’s stimulus is driven by massive lending. Biggest credit went to the Chinese equivalent of Boeing and Airbus. ROFL – they should call the stuff non-repayable grants. Chinese banking system has been broken even during the boom years.

    A friend owns a construction company. Of course he profits from the onslaught of government work. Actually most of the work resembles fixing potholes, as more complex work takes too long to plan and to authorize – speed is of essence. Fixing potholes does not give him much profit and he knows this flash in the pan won’t last long. No recruiting, some temps will do. Truly appalling waste of money.

    Clever move to postpone the release by a week. As long as the news are not out, no one will sell ;-)

  5. Yerk says:

    most of Europe closed today – put the blame for the pump and dump on GS :mrgreen:

  6. Yerk says:

    and the move up in eurusd – 1ct in 15 min :-o If this is not reversed, May 1st will not the a good day to short the market. Sell later in May…