Wednesday, April 29, 2009

S&P 500 Update

If there is any doubt this is a trader's market, one simply has to look at the chart formation off of the March low. We showed this a week or so ago but let's look at an update pulled in the last few minutes. Traders are gaming this market and attempting to hold prices in this channel until we see the Fed's announcement or until the end of the month to lock in monthly gains.

I don't think we haven't mentioned Demark Sequential or Combo algorithms since 2006 and I don't really wish to take the time to explain them but you can certainly learn about them for the minor price of $64 here. I realize this is blasphemous to many traders but I'm not a big fan of Demark's work. The basis for everything I see is anecdotal baloney. But, he sure has sold a lot of books, received substantial sums on consulting and convinced most every quantitative trading firm or desk of the power of his algorithms. So regardless of whether it is baloney or not, it becomes somewhat of a self-fulfilling prophecy in an environment where traders dominate a market. And be assured, this is indeed a trader's market. And traders don't give a shit about what happens next month or next year or what the state of the underlying economy is or whether you lose your pension or any other macro concerns. So belly up to the bar for a new roll of chips and place your bets.

We have now hit a sell on both Sequential and Combo in the S&P. And because every quantitative trader on Wall Street or in any hedge fund on earth knows this, let's see what happens in coming weeks.
posted by TimingLogic at 12:01 PM