Fuinhaz $SPY read for May 23, 2013

Well what can I say? History did repeat itself, and like other corrections or pullback it always comes with the elevator cable broken, and a violent free-fall towards lower levels.

What level would the $SPY needs to hold for now (short-term) to help some bulls exit some positions, or even better, feel like yesterday and today gap down are actually a buy the dip opportunity, and that my chart is wrong?

Let’s see.

Usually the 1st level that will get tested is the 20ma. On a daily chart, that is represented by the 1627.07 level. That is great if you just look moving averages to help you time your entries. But I don’t focus only on moving averages. I like to use Fibonacci retracement levels to help me better time the market. So I personally will be looking for a possible bounce at the 1607.35 (give or take).

Once we test that level, we will shoot back up, and finally reach the 1690.60 level that was not reached. That will most likely suck a lot of new retail traders in who do not follow or have little understanding of charts, and that is when the big money will be made.

These retails investors will be most likely buying everything in their sight, and will end up holding  hot bag of potato (not to use any other word). And when the market pullback again and they think that the 1627.07 will hold again, that is when we will flush right through it including the 50ma (1588.52). We will then hold the 1554.00 level that represents the 100ma. Bounce back up just enough to touch the 50ma where everyone is going to say here we go again, and plunge into a bear market.

By that time we will be long into 2014, a few months before Brazil (Emerging Market) starts to badly host the Soccer world cup which I am sure it will be the worst organization ever seen in the history of the FIFA. A lot of world investors will finally have the confirmation that the emerging market countries are a big fiasco, and we will see fireworks exploding left and right. That is when the potato will hit the fan, and we plunge into another crisis.

This is just my theory, but one that I can actually see it happening. But for now, let’s just worry about today’s numbers.

$SPY 1st support is 164.45, 2nd support 163.35 and 3rd is 161.80.

$SPY 1st target is 166.36 and 2nd is 167.16, 3rd is 167.58, and 4th just for fun is 167.80

Trade what you see, not what you think