1180 Wins Again

  • Posted by
  • on September 27th, 2011

For the 9th straight week, our grand index $SPX has kept its standing date with 1180.  I shouldn’t be shocked anymore, but these one way intraweek moves continue to put me in head-spinning mode.  The simple has again outweighed the complex, and despite my desire to extrapolate a trend I remain opinionless enough to build around the obvious attraction to 1180 going back to September 2008.

Another snapshot in the series reveals little…the % of stocks above their 50 Day Average creeps higher but most are approaching a date with a plunging average, not a recipe for a sustainable uptrend.  I mentioned last time that $AAPL & $GLD might need to be shot to complete that down wave; they were, and it did.  Now, obvious candidates aren’t standing out but in a Costanza market recent dogs like $NFLX & $RIMM are just as likely to bounce before the squeeze ends.  Take a look at the update as follows:

For this week I have no choice but to again believe in this range.  The ferocity of this week’s rally is matched only by that of…last week’s selloff, which was matched by that of…the prior week’s rally.  Wickedly sharp moves; kudos to those who’ve played aggressively on the fringes.  As a longer-term trend follower, I’m doing my best to simply defend my options spreads and avoid max pain until smoother patterns develop.

This spin cycle can’t go on much longer, as a week will come when we fail to touch the magnet.  If a look under the hood at that time confirms expansion of individual stock trends, we’ll know that we’re moving into a different phase…one with huge implications.  For now, the only trend that matters is the anti-trend.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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