Thursday, June 7, 2007

Timer Digest: We are SHORT SPX from 1490.72

Timer Digest: We are SHORT SPX from 1490.72SocialTwist Tell-a-Friend
Fari Hamzei

In the chart below we are using the Weekly SPY (as a proxy for S&P-500 Cash Index).

The run-up in S&P-500 Cash Index came to a halt this week. This prompted us to SHORT SPX for Market Timing purposes. We have informed Timer Digest of our decision this evening.

The next two charts use Daily Bars. The first one shows our Sigma Channel Indicator. Notice how the Zero (0) Sigma line, which gave us an uptrending support line since early April, was broken decisively today. And, we closed at -2 Sigma Level with a massive spike in down volume. As a matter of fact, NYSE up volume was 103 Mil vs its down volume of 1.71 Bil (16.6 to 1).

The last chart is also daily but we have plotted our Monthly Support, Pivot & Resistance Levels Indicator on it. Yesterday Close (1517.38) was a tad above the Monthly Pivot (1514.29). As we projected in our Virtual Trading Room today, the Today's Low broke the Monthly Support One (1) at 1493.03 and closed at 1490.72.

Tomorrow we will discuss additional data points and inputs that were incorporated in our decision to go SHORT SPX. While this sell off may be short-lived, we expect it to be fairly violent.

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