S&P Update 2015-03-11

BarroMetrics Views: S&P Update 2015-03-11

Before I turn to today’s blog, an answer to Irene’s questions….

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A quick question about your recent blog post where you’d written:

“Today, we are likely to see a rally; if that comes about, I’d like to see the high capped at 2085 (basis cash), and then on Tuesday, I’d like to then see a bearish conviction bar closing below 2067.”

While I understand the “closing below 2067”, can you explain how you obtained the “2085” cap?
Separately, do you have any updated comments on Gold, following your blog post on Gold in mid Feb?

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Figure 1 shows how I came up with 2085. No magic: 2085 is within the 45% to 55% zone of March 6’s range. It also represents resistance (shown with arrows in Fig 1).

I’ll look at Gold next week.

Turning to the S&P. We now have a probable 13-week (quarterly trend) Upthrust Change in Trend pattern. Confirmation would be a bearish-conviction bar, weekly close below 2085. I usually take the trade on a daily close. But, given the S&P closed 44 points below 2085, I’ll look for a rally to sell into after the weekly confirmation. If this is a top, there will be loads of time to get on aboard.

If you think I am showing less aggression than  normal, you’d be right. I am very wary that the sentiment the ‘FED will come to the rescue’ has abated. The strong sell volume (and other indicators) suggest the abatement has occurred. To get me to risk my hard-earned, I want to see the quality of the rally after the weekly sell signal has confirmed.

01-sp-nvd.png

FIGURE 1

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