We have a good setup for the bears again.
Yesterday, /ES rises as high as 1329 but fell as Ben testified
Below 1311, we have a good confirmation for the bears.
This remains a trading market with unknowns coming from Greece and Spain (for now).
I am still short on the market and is losing money now.
However, I am also wary of what’s going on with VIX.
VIX is now around $18.31 . The lowest from the chart is $14.27 in April 2011.
In July last year, VIX spike from $14 all the way to $40 within one month.
Greece was supposed to have finalised various agreements since last Friday and ‘legalised’ by this Monday.
That timeline has come and go. There is still no agreement in place. The losses that investors have to take is still not known yet.
If one has not established any Long position yet, I don’t think this is the time to go in.
Judging by the movement of the market, I maintain my view that the market can’t go up further by Feb. Keeping my fingers crossed.
On the Daily Ichimoku chart, SPX is currently trading within the kumo.
This suggest that the direction is not clear. Resistance is at 1220 levels.
However, with the recent rally, we may get a Tenkan sen – Kijun sen bullish confirmation soon.
With the levels so close to the kumo flat top, there is a high chance that SPX will break out of the resistance and continues its bullish run till year end.
Possible catalyst includes the EU package for Greece.
EU will hold a summit on October 23 to adopt more measures to counter the crisis.