Thursday, April 4, 2013

04/04/13: SPX long, target all time high 1576+

Sorry for the general lack of posts.  It has been a very busy couple of weeks...

Markets are going to move on the NFP report tomorrow.  That is apparent.  The question is a huge move up or a huge move down?

I look at charts and generally don't play off of macro models but look forward to these "big" events to see if there is the possibility of a large move up or down.

I have been buying and building a long position the past couple of days after closing the initial short.  I bought at rising wedge support but support broke pretty quick.  I then bought again near 1550 and again at 1552.  Currently slightly in the black so tomorrow will make this trade either profitable or bad.

The reason why I think there is upside tomorrow is:

1.  OBV level is implying we should be near the 1570 level and not 1560 (I know currently with the SPX we are just playing with only 5-10 points at a time).

2.  A/D is also near the 1573 level.  If A/D supported, I would expect the level to be much lower than where it is currently.

3.  CCIs aren't overbought.  Currently my thesis is we are in the process of moving up to complete a B wave.  Typically I have seen B waves top when CCI short term are very over bought but CCI medium/long term are not.  This setup isn't quite there yet so I'm betting that there is continued upside moving into the print.

On the daily chart, we closed above the 10 EMA and continue to rally off of 20 EMA support.

It is clear that this multi-month rally is close to being over but not until it goes out with a bang.

I just think that if SPX can tag 1570, momentum will carry it up to 1576+ to achieve the all time high.

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