The battle between the Bulls and Bears

The battle between the Bulls and Bears continues with very choppy trading action. The rally from a potential double bottom is cause for concern for the Bears, however the Bulls are in a similar situation as they have to prove their case with sustained market action.

In my new video, I outline some of the key levels that I think are important in the S&P 500 market. Volume continues to to be light and that is why the markets are moving around and are so volatile at the moment.

This is my first video since returning from holiday in France, but expect many more as the market rotates.

If you'd like to comment on this video, please visit our blog and make your views known.

All the best,
Adam Hewison
Co-creator, MarketClub

12 thoughts on “The battle between the Bulls and Bears

  1. A lot of bewitching disturbances certainly on the way by October. Here are the forward dates I am watching, and with one exception I think Fridays and Mondays are key:

    1 After some successive weakening and some weak and failed recoveries, a real steep freefall starting about 14th October
    2 trick or treat, i.e. a sideways fool's recovery starting Friday 29th October or Monday 1st November. Expect a lot of angst around the elections. However really loaded operators like Warren Buffet can maybe afford to look across the abyss and get back in to try and steady the markets.
    3 final down spike starting Friday 12th or Monday 15th November. Actual nadir date will vary according to sector. In 2008 the S&P and the World Index hit bottom on the 20th November, while commodities hit their nadir 10 trading days later on 2nd December.
    4 By Friday 26th November 2010 at latest for general equities and maybe later for commodities: if many have already lost their heads and jumped from skyscrapers and bridges and there is blood on the floor, check the P/E ratios and buy. If general equities start climbing, people may switch from commodities thus depressing the commodities even lower for a few days. Vice versa can also apply, naturally.

    Being a post-election year in 2011 there is likely to be another dip in January-February. If there is a switch in the party controlling the House and/or the Senate there can very well be a deeper downspike in February-March 2011 than the November-December 2010 one.

    Just my 2c

  2. I think that with the triple witching coming this Friday that the S&P will continue upward to 1100 or even close to 1120 and the Dow possibly up to the 10500 area; unless some ugly news comes out. After that I see it sideways, to a little lower (not below S&P 1040, DOW 9800). Then sometime between July 5 and early Sept it falls and continues, just like the last depression. The fall will start with bad economic news from within our borders and/or more financial problems in Europe and maybe some other countries. All of that and a Middle East war between mid-July and late September involving Israel and some of its neighbors, U.S. possibly taking out Iran (buy gas, food, metals). Come October people's heads will be spinning and they will be asking, "What the heck is going on?"

  3. Whatever happened to your poll questions on the blog?, they were a great indicator in my opinion as to where a market was headed


  4. Additionally, 1105.68 will be the New 3-week High that triggers a Green Weekly Trade Triangle, which means I will go NEUTRAL from my 1040.50 Short of the SPY if/when that happens.

  5. From the broad, overall historical view, I see the following:

    From the all time highs in July-October 2007, to the low on 9-10 March, we have seen the 50% (.618) recovery to DOW 11,200. This .618 is identical to the 50%+ retracement seen in the DOW after the initial crash in October 1929.

    Now, there should be one more retracement UP TO DOW area 10,500, afterwards there should follow a steady decline that will equal in percentage, the decline seen in DOW that followed on into 1933.


  6. Whew. The downside could be things like Japan following the Hungary and Greece example of coming out on their massive debt. Then there is the US low-end consumer having difficulties, with aggregate demand decreasing with every new 100 000 workers laid off, etc etc.

    Loic and Adam have a good point about reading the charts rather then guessing. However considering the possible directions, up, sideways, down and the possible scenarios for each is a kind of informed imagination at work, and almost guessing. Why do we then want to guess? Is it to develop our radar to cope with a present situation, or to build up a bank of possible scenarios in one's head for future reference, or both?

    To return to sheer bull and bear guesswork:
    My uninformed guess is a bad two weeks from Friday, 18th June to Friday 2nd June, with the following two weeks 5th July to 16th July either up or sideways.
    I.e the bears would have a two week stint followed by the bulls having theirs. But what does everyone else think?

  7. Nice video. I really like the multiple timeframe signals! Good Stuff..

    The 1,040 level is important across timeframes, which is a call to action to various types of traders, from day and swing traders to position traders and investors...which can be huge for price movement.

    Also of note, 1,040 has pivot-based support in a weekly chart, daily chart, and intraday charts...multiple timeframe confluence at its best!



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