It’s tough to be a bear. I’ve shorted this rally here and there when TA started to show overbought since February. However not covering quickly enough has given me wounds. Now I’m licking my wounds seeing SPX passing 1,600 making its all time high closed at 1,614.42 on Friday. The target for this coming correction is revised to 1,480 or perhaps 1,532 if the market continues to rise from here.
My prediction on Santa Rally was spot on. I have enjoyed my 10% profit since November and an overall of 20% profit this year. I know it is much less than the 100% profit last year; but 2012 was a difficult year to trade. Besides I went back to swing and position trading since day trading was so stressful.
Back to the trading plan for January, it is time to be cautious and lock in your profits. The bears are coming! Buckle up, once you see the sign; 1380 here we go again…
SPX tested 1385 today then reversed up. I consider my previous call on Nov 23 fullfilled. If 1400 holds to the end of the month, consider the low was in. Time to scale in long. Santa’s train is coming to the year end rally.
Happy Thanksgiving! SPX has risen by at least 3.3% since I released the buy signal on November 14. Hope you have made some money by following my plan. There will be a small pull back next week. I can’t publish charts since I’m away from my desk. However VIX and Elliott wave count both are supporting a pull back. My estimate is that at least 1380 be retested. If you want to ride that wave, sell now then rebuy at a better price.
Update: I closed out all my long when SPX tested 1409. Happy with my 4.75% gain.
It is getting into the oversold territory. Be prepared to scale in. Market can snap back all of a sudden.
Time to lock in profits; then either stay at the sideline or short any rally. Correction is coming soon. It is just a matter of time.
The bulls could not push SPX to revisit previous high (1,422). May selling is in effect as earning reports starts to fade. Markets are officially in a down trend. Down trend could last 4-6 weeks. Below are the plans. I don’t believe 1,300 push down plan would be true. But markets are vulnerable to selling so the probability is there.
Sell in May and go away. Previous high (1,422) will be revisited but be defensive and use stop loss. Keep your size small.