Thesis on $SPY for coming months in 2012

I have shown in the chart below what I am looking for the $SPY to unfold in the coming months.

My Thesis is based on the following factors

1. Price has memory.

2. Markets don’t go straight up.

3. Weak Hand always get shaken out.

4. Markets go in bullphase when everyone has lost hope.

5. Market is not going to 0.

6. When everyone sees bullrun on light volume and try shorting it again and again and again, that is when bull phase actually starts. When retailers have no money left for bullphase cause they have lost most of their cash betting on short side, that is when see an EPIC run to upside

Thesis for 2012.


My thesis is based on price action in 2011. Where we moved from A1 to B1 and then moved to C1. Breaking below the low the point of B1. Just when most investors have thrown in the towel or have gone short we saw a big rally in the markets. The move from B1 to C1 was to test the breakdown level of 125ish on $SPY.

For 2012. We had a similar move down from A2 to B2. If my thesis is right we will test 135-136ish in $SPY and just when all bulls think everything is good and it’s time to go all in. That’s exactly when the markets pull the rug underneath from those investors and we make a violent move of C2 to between 120.4-122.75. Once we see most people trying to short below the low point of B2. Then we will see big bull run. Then as usual the retail investors go wooooooahh, we missed it AGAIN!! DAMN IT!!

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  1. June 19th, 2012
  2. June 21st, 2012

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