S&P 2014-10-13 II

BarroMetrics Views: S&P 2014-10-13 II

Last night, in no uncertain terms, the S&P negated the bullish scenario I had postulated in yesterday’s blog. This leaves only the bearish scenario.  Figure 1 shows the price action. 

It is now possible there will be a bounce to the 1939 to 1951 VAH before heading South; but then again, the S&P could just head straight for the Primary Buy Zone at 1832 to 1816.

My gut feel suggests a bounce is likely to at least the 1911 to 1893 zone before again heading South i.e. there will be a bounce that will not get to the top of value at 1939 to 1951; but instead will stop at 1911 to 1893.

But the key question for the traders is whether the underlying belief that the FED will come to the rescue will hold. The belief will be put to the test at the next (and final meeting for 2014) on Dec 16 – Dec 17.

Before that there will be the Non-Farm on Nov 7 and Dec 5 that may cause a pause or accelerate the current southerly direction. 

At this stage, my S&P strategy has changed from ‘long or out’ to just ‘out’. I’ll see how the S&P reacts to the Primary Buy Zone before deciding if it is time to contemplate going short.

01-sp-18d.png

FIGURE 1