New Long Term Target For S&P…360

February 28th, 2009

Here are the technical facts for the S&P. This week we closed below both the 2002 and 2008 lows which is very concerning for the health of our markets. After looking back to a long term chart of the S&P going back to the 1920′s, the double top pattern that we just completely broke suggest that our new target – again long term – for the S&P is somewhere around 360. I know it sounds scaring but here are some hopeful thoughts.

 

First, I don’t think we are going to go straight down to that level anytime soon. If anything, we should technically see a slow forming rally sometime in the near future. This will of course present the most amazing shorting opportunity that ever existed for us traders – ever! Mark my words, after we get back into prime shorting area – my target is around 1,100 on the S&P - the people who go short are going to make millions and millions of dollars! Of course this is not only me opinion, but the opinions of some very respectable money mangers and other professional traders.

 

As you can see in the long term chart of the S&P below, we have significantly broken the 200-Month moving average and have successfully broken the neckline of the double top formation.

 

spx-3601

 

As for the current market direction, I think that the close near the lows on Friday show significant weakness in the markets. Until we see some sort of buying from the bullz we are going to slowly bleed away into lower levels. Regardless, there are stocks that are great looking shorts and there are also those that are amazing longs. As members know, I made major changes and additions to my portfolio on Friday! I continue to stay hedged for both directions, but let me be as up-front as possible – we are positioned to make baskets of money over the next couple of weeks regardless of where the direction in the market.

 

Tomorrow I will be sending out another Member’s Only trading video to re-cap my portfolio this weekend! I urge everyone to take a look at all their positions closely this weekend and really re-evaluate your risk profile for each trade. These are the times when a little bit of analysis and homework will save or make you thousands of dollars.

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