Major TTT opportunity May 14 - 16

Thus far, the roadmaps have proved to be quite reliable as part of your trading strategy.  When everyone and their mother was calling for a top, the roadmap #1 continued to call for higher highs into early/mid may.   May 1-3rd as previously mentioned was a key point as if that was a low, then roadmap #2 would have been the likeliest scenario.

So, lets focus on whats ahead.

I had figured 1600 - 1610 was the high for May 14 - 16 timeframe however since we are past that, and the trend line suggests that if we do go as high as the upper channel top, we are looking at a high of 1650.  While that doesn't seem possible for me, I will just work with what the chart is telling me.  Its more important that time is correct rather than price.

So what I've illustrated below is the current scenario using a rising wedge from the 2011 Low, that we are sitting at the top of, and I'm also using an upper trend channel the S&P finds itself in (better for shorter trading timeframes).

I don't hold too much stock in the upper green line partly due to the fact the S&P had already broken through it previously and hence why we are moving to the upside still, but the lower red line is still important as we look forward.   If the S&P continues in this channel to the May 14 - 16 timeframe, then we are looking at a 1650 price.  However I just posted the main alternate roadmap which is showing May 7th as the next high, and if that ends up being the case, we are looking at 1640.

The drop according to the primary roadmap is going to be roughly 18%, so we are looking at a 50% fib retracement of the bull move off the Oct 2011 low.  You will notice how this would significantly violate the red trendline and this is would mean that the next peak will be a lower high, as per Roadmap #1 around late Oct early Nov.

May 21st is an important date to know if roadmap #1 continues as primary, or if we should be looking at the main alternate roadmap  which takes a different direction into early July before heading down into early August.  

The Primary Roadmap calls for a lower high in early November, the Main Alternate Roadmap calls for significant new alltime highs at the end of November.    Whats great, is that the July 29 - Aug 2nd low is a major one, before a big move back up into at least early November for both scenarios.

Remember, always use stops, and don't just rely on the roadmap, look at technicals around turn dates to confirm direction.  Either way, I will be all in short come May 14 - 16, but will start building my short position May 7th.

S&P Roadmap #1 or #2?

Both S&P Roadmaps called a March 31st top well in advance along with what we are seeing, a minor pullback.  We had a higher high April 2nd, but the momentum definitely turned as confirmed by todays big drop.   So, where do we go from here?  Well, for starters, that question will become clear as time goes on, however I don't think this is the time to get greedy if you have shorts.  According to both roadmaps, we should only be down till early to mid April before rebounding, but this is where the roadmaps start to take a different direction.

The best way to play this, is take profit on your shorts.  I suspect before the week is done or early next week, we could see 1530.  At this point if we reached there, you should be out of all your shorts.

Roadmap #1 is looking at a higher high come May 14 - 16 timeframe.  Roadmap #2 by contrast would have  a significant low May 1 - 3.   I think the key is to see where the S&P is come May 1-3 timeframe to determine which roadmap is in play, but I am now thinking  based on the levels of the S&P today, that Roadmap #1 should be your guide and as such, the best strategy would be to wait until mid May to place big time shorts.

Both roadmaps can be accessed at the top via the the 2013 Roadmaps Tab.

Commodities are perilously close to breaking some critical support levels spanning a few years.  Particularly Silver which has a $26.11 support level that is critical, and I'm thinking we are looking at a bounce there which will coincide with the S&P early next week.   Notice all of a sudden Gold/Silver tracking the S&P again?

No fancy charts today, just the roadmaps.  

One more push higher into May 14-16? Why not.

Cyprus shaking the market, 2013 FULL YEAR roadmaps at a glance..

So I wanted to start of by saying that I have now posted the FULL YEAR roadmaps for the S&P 500, with all sorts of commentary attached.  You can find this by selecting the 2013 Roadmaps tab at the top of the page.

Now, Cyprus has announced some crazy plan to screw the little guy, setting an asset tax for all those with bank deposits for up to 10%.  That is crazy, and quite frankly grand larson as they attempt to raise funds that are necessary under the terms of their bailout.

Futures are down sharply tonight, however I actually believe the vote on this measure set for Monday, will actually be rejected.  That, or Europe will weigh in and say how unique Cyprus is and that this won't happen anywhere else in Europe.     In other words, I expect this to be a blip on the chart, and for the S&P to continue higher into March 31st as Roadmap #2 suggests.   I'm figuring the dip into May 3rd is roughly 3% - 5%, which is minimal given this run. THE KEY MESSAGE IS, BUY THE DIP.

Futures thanks to Cyprus:

Blow off top?

In recent posts I called short term highs (1530 SPX and 930 RUT), however the retracement didn't go back as far as I thought it would (thought 1460 SPX but 1487 was the max).  Also the Alternate Roadmap called for a Feb 25th - 28th low, and it came in on the 27th.

Now the Alternate Roadmap is looking like we are going up into March 30th, and as such ensure you use stops regardless of which side of the trade you take. I will continue to post daily resistance/support levels for the SPX.

Here is the obvious target (of course if this gets violated, we are in unchartered terrirtory):

So my idea is to just to wait it out and see if we get to 1576, try a short around there but may scale in leading to that time period if price does what I expect.   I do get the feeling though that we will retest 1492 come May 2nd before surging higher into the summer to new and unprecedented highs.  Now, that is according to roadmap #2 even and I have a major turn date of May 3rd as posted the following chart Feb 1st:

In the meantime, I will be going short again Natural Gas as I believe the downside is the most likely bet as the next move down to futures contract price of $3.15, before heading up into a June high probably around $4.

I will sometimes deviate from the plan if I see a quick trade....as always, all trades posted in real time in the Trade Section.

Good luck folks.

Short term Top is in...SPX

Next is down for the S&P, although a retest of 1530 is possible.

On Feb 8th post, the charts indicated that max pain was 1530, and we reached that and stopped at 1530.94 on Feb 19th.  My price levels appear to be accurate but time was off as I anticipated the intermediate top happening between Feb 12 - 14, and as we know it happened 5 days later.

Here is the updated S&P Chart from Feb 8th, recognizing that the pitchfork mean is being respected and not violated, it appears the continuing uptrend will only ride the line if that is indeed what Mr.Market is wanting to do and a break above this seems unlikely.   Target is 1460, however 1440 is also possible depending on the events driving the S&P down.  My thought is that since I see new highs ahead, that 1460 holds as the bottom and correlating with the bottom of the pitchfork.

As predicted on the Fib time scales, the RUT topped out at 932 (930 was predicted).  Now in considering this, I am playing with TZA but my first trade is a major loss.  I thought that it wouldn't make it past 878, and as such I stopped out rather than holding on for March 4th - 7th since I'm thinking the S&P retests 1530, thus bringing the RUT to approximately 932 again and sometime Monday or Tuesday I'll be reloaded on TZA.  What is important on the RUT is that the mid BB point is at 911.76, so I figure a retest of the upper BB which is now at 928, then breakdown and below 911.76 for a second time and confirmation that the low I am anticipating ahead materializes. 899 however must break and is a pivotal point.

Lastly, I want to show the bigger picture on the S&P.  Here is a massive rising wedge developing and maturing which is suggesting that we do have higher prices ahead and new highs, perhaps 1576 for a major double top, or at least so I think.   This could be a point where the market rockets higher into unchartered territory, but the multitude of breakdowns happening all around us, I do find this highly unlikely

S&P Open to the possibilities.....

I think at this point, you have to be open to what the market is going to give you.  Stubbornly, I held my short on the RUT using TZA without using stops and without staggering my entry points.  This has proven to be a poor decision and one I need to learn from.  At this point I feel its more risky to sell  and miss a recovery on TZA rather than to hold.

SPX
So back to the SPX.  Numerous developments have pushed the SPX higher but it really is looking exhausted and 1515 is an area that seems to have been a temporary ceiling, but today has given me the first glimpse that higher is possible and the max pain I see now would be 1530, the mean of the pitchfork (key with the SPX, is it seems reluctant to go over the mean).  I think the way to play this is with stops as it could easily ride the mean higher as time goes on, and therefore crushing shorts who don't have stops, along the way.  We do have a negative divergence in the MACD and RSI is at 66 which has room higher but given the exhausted feel of this I think upside is limited.

So if I consider the bottom of the pitchfork, I see 1450 as the likely target.   I favour a 50% fibonacci pullback so 1436 if 1530 is reached, unless the high is 1517 then the fibonacci target is 1430.

RUT

The RUT is a different beast in that it has lived above the pitchfork mean since January 2nd (as opposed to the SPX which has remained below the mean).  Given the direction I believe the SPX will take and the fact that the RUT ususally outperforms the SPX in both directions, I would suspect that the Feb 25 - Mar 5 timeframe for a low will be a more significant drop for the RUT as illustrated below:  Notice the fib timelines seem to agree with an imminent turn documented below:

-9.5% drop predicted to 830

The MACD had a negative divergence a week ago, and the KST indicator is reading again is at an extreme juncture. The next chart illustrates additional reasons why I am reluctant to sell at this point......notice the extreme KST and subsequent price action of the RUT.  If 9.5% drop in the RUT materializes, that will net me a roughly 12% gain which I will still be pleased with, even if I could have done much better.

By the way, the drop from Sept 26 to Nov 16 was 9.6%.

S&P Max pain?

On the last thread, I presented a case for the S&P which saw potential to 1515 (mean of the pitchfork) and sure enough that is where it hit (just shy).  I thought 1508 would hold as resistance but you could see another push forming when the S&P failed to close 2 consecutive closes below the trend channel.  Hardly even a dip!

So the first chart I'm going to show you is the same one I had last week since it's still in play, except the target of 1424 was based on a 1508 high.  I'm still expecting a 50% fibonacci retracement which would be approximately 1428 as a target for late Feb early Mar however this chart is important as I think you'll see how the mean is respected (unless we are breaking to new highs from here with no pullback) and this is why I'm showing it again:

The next chart shows the fibonacci support levels, and where my target is:

Now here I'm using Gann angles along with fibonacci time using 2 major lows, and what its suggesting is that my 1428 target is certainly possible in the time frame I'm looking at with absolute support at 1399.  What the chart is also telling me is that Early May is looking like a major turn date similar to June and November lows.   What I didn't illustrate in the chart, is Feb 19/20 I see 1457.

Now, after seeing this, have a look at the 2013 Alternate Roadmap which I think is now in play, and the link between the 2 charts is telling.

How are you playing the next 1, 2, and 3 weeks?