The gap from Friday's SPX 921.23 close got completely filled at yesterday's print high of 921.42. The market rallied to that level because:
A) Bernanke manipulated it while he was testifying before Congress. He was using a hand puppet under the table.
B) Bernanke is a hand puppet.
C) Two patterns broke out to the upside in the chart, the second of which put the SPX 921.23 gap IN PLAY.
D) Sentiment was too bullish at the June 11 SPX 956.23 top, and sentiment has gotten even more bullish since then.
E) Market participants were cheating, just like everyone except Mark did on last weekend's homework assignment.
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Results of the Wall Street Sentiment Survey, June 8, 2009 (3 days ahead of the SPX 956.23 top):
Bulls: 11%
Bears: 78%
The survey chart, posted at Traders-talk.com (thank you) shows that Bearish Sentiment has not been this extreme since early 2003, coming out of the 2000-2002 Bear Market.
June 10, 2009 5:41 AM
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American Association of Individual Investors members are:
(as of 6/10/2009)
Bullish: 39.25%
Neutral: 21.50%
Bearish: 39.25%
(as of 6/17/2009)
Bullish: 33.33%
Neutral: 20.24%
Bearish: 46.43%
(as of 6/24/2009)
Bullish: 28.00%
Neutral: 23.20%
Bearish: 48.80%
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2 comments:
Hi Melf
I would second Katzo7's comment yesterday; your work is greatly appreciated.
Re your quiz: I would say (C), the H&S target sets up the 921.23.
Regards
Alex
Thanks, Alex!
Yep, the Answer is (C), so you can go to The Head Of The Class ;)
The neckline is a bit awkward for an Inverse H&S. It looks more like a Cup & Handle, but the measurement would be the same.
Take the height of the pattern from where the trendline was when the low got put in, then add that to where it broke out (kinda hard to measure exactly on these intraday charts), and that puts us in the ballpark of the gap fill, at 921.23. Very good.
Personally, I think that the answer should be (B) Bernanke is a hand puppet ;)
Have a great weekend!
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