The Emperor of Mankind - Guardian of the Imperium, Lord of Terra, Aeternus Eternus
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The current 1-day box on the SPX is located between 905-925/930 as it can be seen on the 1-mo/20-min chart + 1 blank day. Immediately underneath is the 3-mo/60-min chart where you can see the intermediate-term support and resistance areas.
The 8-mo/daily chart is what gives me pause. I have given enough blank days for the next 1.5 months. The key areas to focus on are 875 and 925 and everything in between. The early June flag failed, therefore, I have to give significant weight to the downside. I don't see a free fall occurring, but I do see an initial test of 875. The chart assumes that the market will complete a "head & shoulders pattern" by the beginning of July.
I wrote that it "could get complicated. This simply means that I expect a significant amount of whipsaw. Therefore, I do not plan on making too many swing trades, but rather day trade until I see a setup form. Why am I not short yet? I am waiting for a lower high to form (if it forms).
The following sectors are under significant stress: materials (XLB), consumer discretionary (XLY) and staples (XLP), industrials (XLI), financials (XLF), and energy (XLE). Health care (XLV) is neutral and the utilities (XLU) and technology (XLK) are still in up trends.
Does this mean there are no more long plays? Absolutely not. I think it is time to mix in longs with shorts while keeping a large cash position for any swing plays.
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