HOW DID THIS:
GET TO THIS?:
The rally and bottom in the SP500 began on February 11th, when the market took out it's January low of 180425 by 1.75 at 180250. Sellers failed to expand below January's low, turning the breakdown into a failure and setup the potential for a squeeze...
FOMC next week... Spoos known for rallying into these minutes.... #FWIW— Chicagostock (@Chicagostock) February 12, 2016
THE BEAR TRAP:
Major traps set last week as a reversal is taking place into #FOMC— Chicagostock (@Chicagostock) February 16, 2016
THE V BOTTOM SETUP INTO FOMC:
V BOTTOM PROJECTING TEST OF NEW YEAR HIGHS:
SHORTS THINK THEY GOT RUN OVER, HAVE NOT SEEN ANYTHING YET:
Think shorts are being ran over now? Wait till they get taken out in body bags with ES new highs for the year— Chicagostock (@Chicagostock) February 25, 2016
HALF WAY THERE:
BREAK LOWER LOOKING FOR REVERSAL TO SETUP V BOTTOM / BEAR TRAP:
Last Thursday low taken out 7475, for tomorrow, watch to see if market decides to make another run at last Fri highs...— Chicagostock (@Chicagostock) March 10, 2016
FAILED BREAKDOWN SETSUP ANOTHER V BOTTOM GOING INTO FOMC:
SIDEWAYS CONSOLIDATION WITH FOMC HELPING EXPAND V BOTTOM UP TO 2040 ONE WEEK LATER:
V bottoms happen when longs are kicked out on a move down, as did from 1922-1802. New shorts are lured in, only to fail in expanding down, seeing shorts squeezed with a move back above its prior failed high, 1922. With longs gettting their teeth kicked in on downside and shorts as well on upside, this is where a plateau can occcur. Buyers have to get back in at original prices, and shorts have to reverse positions. Expansion through the V bottom, gives way to take the range of the V bottom and target that to the upside.
120 point move from the breakout level of 1920, and a 240 point move from the lows in February. All of which identified, and guided by @chicagostock. Nothing is guaranteed in a market. On the other hand, having an idea of where the market can go, is very important. This can not only be helpful in managing risk, but also in ideas for speculators. It is important to think outside the box and expect the unexpected so that if/when it does take place, one is not caught blind sided. More charts and analysis to follow.
RISK DISCLOSURE: PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS IN TRADING FUTURES AND OPTIONS IS SUBSTANTIAL AND SUCH INVESTING IS NOT SUITABLE FOR ALL INVESTORS. AN INVESTOR COULD LOSE MORE THAN THE INITIAL INVESTMENT.