Notice that the price stopped exactly at the major downtrend line, 1105. This is a major resistance level and I personally do expect a small pullback from here or at least some lateral consolidation before going further up. However, if SPX goes above 1105 the next stop should be around 1115 where the SMA200 resides and also one of the top three levels where we did see a lot of volume since the beginning of the leg down according to "volume at price" indicator (look two posts bellow)
Now let's have a look back at my preferred timing strategy, EMA25 crossing EMA50 on 60 minutes chart to see what was its performance since April 26 when the new leg down has started. For those of you who didn't follow my blog from the very beginning try one of the June's posts to see previous "buy/sell" signals. Since I am looking at hourly charts the software doesn't allow me to look further than 3 months back.
Most of the time when a sell signal is generated I sell my longs and immediately go short. If other indicators give me a "sell" signal before EMAs crossing I take profit on part of my shares (at least 25%), for example when daily DMI turned negative at the end of the April I took some profit around 1200 and sold the remaining shares around 1180 when EMAs did cross. Also when I recently spotted the "rising wedge" I took some profit. For the sake of the argument I am going to assume I did sell all my shares when I've got a bearish EMAs crossing and went 100% short at the same level.
short at 1180, cover at 1080
long at 1080, sell at 1090
short at 1090, cover at 1065
long at 1065, sell at 1095
short at 1100, cover at 1080
long at 1080, sell at ... (we'll see)
Excluding the last leg up since is not finished yet my strategy made me 185 points on SPX or if you prefer 1,900 points on DOW. It's not too much, I am sure there are people who made more money than me but I am trying to point out a strategy that can make you money no matter if the market is going up or down and with little risk. With discipline one can easily make 400-600 points per year on SPX depending on market conditions. Notice that I missed all the temporary tops and bottoms. Once again, notice the little risk I took to get these points, I never fought the market and at any point I wasn't in danger to lose my shirt.
All the best!
babaro
P.S. Once again thank you very much for all of you who did click on the adds displayed on this page, this is one way you can say "thank you" for the effort and time I am spending writing these daily analysis.
