I am still of the opinion that the equity markets are likely to give up the ghost at some point here soon, but probably from a higher point that we currently see. I had previously stated around that the market would get to the $150 level on the S&P 500 Spider (ticker SPY), but after looking at recent price/volume action I think the ultimate price point where information will be released is around the $154 price level. This represents roughly a 5%+ gain from current levels.
I am thinking this for a few reason. First, the SPY's pullback since September 14th has been on ever decreasing volume levels. To me, this suggests that the supply pressure is waning. I also see this and think of what trader I worked in a past life had said "If they cannot bust'em up, they bust'em down. If they can't bust'em down, they bust them up." If they cannot push this market down, then it is going up. In addition, the dollar trade, as represented by the Power Shares US Dollar Bull Index (ticker UUP), may want to trade lower, probably into the low $21 price point.
The dollar trade has been a proxy for the risk/risk off trade, and higher dollar values have been an indication that traders feel less adventurous. There was just too much volume that pushed through the $21.76 level to for the UUP not to retest the low $21 level.
No comments:
Post a Comment