Long Term Bear Market Condition and Short Term O/S
The SPX finished 2015 at -0.7% and the major RST sell signal was triggered in June with a monthly close below the low of the high month which was May 2015, with the SPX cycle high of 2134.72 The details of the long term Pi cycle symmetry has been discussed with detail in previous commentaries so review it if needed
The SPX is in a bear market condition and “below the line” with the 20DEMA<50DEMA<200DEMA and all three MA`s declining. The market has been and still is a Fed ponzi scheme with little correlation to the fundamentals and driven by a small universe of stocks responsible for the biggest % of the Index move, and especially the QQQ where almost 60% of the advance was driven by five or six stocks. The global markets are in the same condition but worse
Following the Pi symmetry bounce from 9/30-10/5 time zone, and 1867-1871 double bottom, the SPX made a 2116.48 11/3/16 high followed by 3 more lower highs and lows and a -9.8% decline the 12/29/15 2081.56 to the 1878.93 intraday low this morning [1/14/16] as I complete this commentary..
The market is obviously O/S and back to the paper thin triple bottom zone but the Fed will continue to manipulate the rallies, and if possible keep it afloat for political reasons to help “Her” get elected. The SPX hasn`t even come close to the .1574 382RT zone to the 2009 667 bear market 667 low which is a -26% decline, but this bear market, following subsequent Fed O/S markups ,will at a minimum hit that zone with the .50RT and .618RT zones at 1401 [-34%] and 1223 [-43%] ,which are the most probable targets
The ridiculous extended volatility opening period gaps remain the best source of profits for day trading with the highest probability of success, which is obviously how the game should be played.
One source for the IV data to calculate the VB`s are www.cboe.com and the click sequence to get the data is as follows:
Tools & Resources, Strategy Planning Tools, Volatility Optimizer, IV Index
Note: use the closing price in top left box and the IV Index mean which today were 1890.28 and 22.13 for the SPX [1/14/16]
In the next commentary I will show you how to calculate the bands as the programming for the IV calculator I said you could get is still beyond my control, but it will be fixed and I will also have a complete guide to VB/Standard Deviation day trading that will be available.