Anyway, have been analysing SPX for close to 1 hour to see all possible scenarios. Doesn't look good, no matter how I draw the fibs...the trendlines.. I have arrived at the conclusion that 835-840 area is going to offer some significant resistance.
I think the SPX will likely retrace a little bit to somewhere close to 825-840 before going down again. Some possible levels of support from my analysis are as shown in the SPX chart.
The conditions now are ideal for a move down with the Dollar getting stronger and Financials tanking each single day.
But I must warn you that a bear market rally is imminent at some point. You have all seen what happened when a short sale ban was enforced by the SEC.
So the question is whether this downtrend is a result of short selling or real selling? I would pray that it is due to short selling because this is the only way that SPX is going to have a very big bounce. If this is due to real selling, GOD help us....
I have not forgotten the Maximum Pain for SPY = 94, it is quite far from where we are now. But I will advise you to always stay alert for a bear market rally today because today is Option Expiry day.
Strategy:
Daytrade: ERX, TNA, IWM (puts)
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