S&P Outlook

Click on Chart to Enlarge

Most of the notes are on the chart and build on recent posts. I am still waiting for a legitimate oversold signal to exit the SDS trade. I would actually be interested in a bullish trade if the general outline of the bold green line above plays out. That would be a pullback to near the 950 breakout level with short-term oversold conditions.

The most recent real money sentiment readings are starting to get to the level that even in a bull market you expect some give back or a slowing trend followed by a quick give back of gains. From a technical perspective, I would guess that we will have to see some divergences in breadth and momentum indicators occur before any large correction would begin though. Also, as per yesterday's post, at this point I would almost assume that every last post-crash short will be squeezed on this move, which should allow the S&P to move up another 4% from current levels before the juice is gone. Not saying that will be right away, but maybe over the next few weeks.

Once again, the markets closed well above the morning lows. Out of SPY, DIA, and QQQQ, only QQQQ managed a bearish engulfing, and it had a tail under it, so I opted to not post a trade. First I want to have more confidence from the price pattern that the market really may be making an intermediate or longer term top to post a 3x trade. Right now, though the sentiment picture is getting overly bullish, I don't have that confidence, so it probably will be smartest to just let any pullback occur, and first judge whether it is buyable or not.