Luna $ Ticks

August 7, 2008

The Sinuous Way to SPY 132/133 – Part 2

Filed under: Trading SPX SPY — moontrader @ 10:24 pm

Today’s action in the market was predictable to say the least. In my previous post I stated that we would be getting to 132/133 in a sinuous, tortuous way. There’s still a lot of negative sentiment and while the market doesn’t prove its strength it just won’t fall. Bears are ready to pull the trigger, and they’re already doing so, being stopped day after day (well, some of them are smart enough to bail out before being assailed by a flashing rally). So, here’s my ideas for the moment and what lies ahead, in terms of price… AND time.

First of all, notice how the three magic DMA’s are converging again, forming a strong solid support.

DMA 3×3 =125.99

DMA 7×5 =126.35

DMA 25×5 = 125.90

At the end of today’s session, SPY just kissed them and bounced back up, even if it was just a small reaction. Notice also how MACD is holding up along with Stochastics, in spite of today’s big drop. Many would say that we have a triple top, but historically speaking, triple tops are not that effective and they tend to be breached pretty soon.

In my view, we are going to retest the 129.30 level soon – maybe tomorrow – and, as soon as we breach it, we’ll have an amazing rally – something like 30 or 40 points in a single day. We have had this kind of action in the last couple of weeks, since 07/15, so this kind of scenario is completely reasonable. We’re definitely going to the 132/133 level in the next couple of trading sessions and only then we’ll see how strong this market is.


1 Comment »

  1. Another excellent call. I’m sure a lot of people got short yesterday and regret it today.

    Comment by Jigsaw — August 8, 2008 @ 11:24 am | Reply

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