The SPX tapped the BAM 897 magnet (today’s low is 896.95 so far) and, as I said this morning, the model shows them turning back up.
I would expect one more “fakeout” followed by a sharp rally and that rally, assuming the market tracks the model, should carry us higher.
At that point, the SPX should be well positioned to trigger the hourly model sell signal that is waiting overhead (this trigger is NOT based on price, it is based on my proprietary indicator and I’ll let you know when it triggers) and once that sell signal is triggered this should get very, very nasty.
Remember, the buy signal set up is strictly temporary and simply implies a sharp intraday rally. It does NOT change the bigger-picture bearish forecast for a mini-crash in the Nasdaq to the 1427 magnet.
Day traders may want to use a tight trailing stop on your FUTS short and if stopped, flip to the long side on an upside break of SPX 900.
Crude Oil Update:
Last Friday we wrote…
“The downside reversal I see coming in crude oil can only be described as a CRASH. We’ll see where the chips fall but, as far as my work is concerned, this call is 100% unambiguous–CRUDE OIL SHOULD CRASH IMMEDIATELY.”
Crude is already down 8% since we sent that email and although I believe this move is confirmation of what the model sees coming, it looks to me like we’ll see one last bounce into the 70 level before a further collapse.
If you are not already long the DUG, (our bearish crude and bearish XOI idea) I think we’ll see a nice opportunity involved. Look for a quick bounce in crude as well as the SPX and if that opportunity presents itself–we will exploit it.
Full report coming soon