A Blow-off Top Is Coming

By: Erik Swarts | Tue, Dec 13, 2011
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As random as their movements may seem on an hourly basis - the market's structure has a message inscribed. They are never random walks - but machinations intended to reward the few at the expense of the majority.

I believe the equity markets are about to audible on those of us anticipating the next shoe to drop in the sovereign debt crisis. What is interesting from the perspective of balance, price structure and momentum, is the market has been trading very similar to the early Spring tape when a certain esteemed economist capitulated practically at the top of the market.

Over the coming sessions, I expect the SPX to find a low ~ 1212 before changing into the jolly old St. Nick - just in time for Christmas. From the perspective of balance, it's seems fitting that this stage of the crisis would be bookended by a similar blow-off move. The market's structure and momentum as expressed in the stochastic indicators exhibits a strong congruency to this Spring.

SPX Blowoff Top

SPX Blowoff Top 2012

 


 

Erik Swarts

Author: Erik Swarts

Erik Swarts
Market Anthropology

Although I am an active trader, I have always taken a broad perspective when approaching the markets. I respect the Big Picture and attempt to place each piece of information within its appropriate context and timeframe. I have found that without this approach, there is very little understanding of ones expectations in the market and an endless potential for risk.

I am not a stock picker - but trade the broader market itself in varying timeframes. I want to know which way the prevailing wind is blowing, where the doldrums can be expected and where the shoals will likely rise. I will not claim to know which vessel is the fastest or most comfortable for passage - but I can read the charts and know the risks.

I am not a salesperson for the market and its many wares. I observe it, contextualize its moving parts - both visible and discrete - and interpret.

I practice Market Anthropology - Welcome to my notes.

Erik Swarts is not a registered investment advisor. Under no circumstances should any content be used or interpreted as a recommendation for any investment, trade or approach to the markets. Trading and investing can be hazardous to your wealth. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor. This is strictly for educational and informational purposes only. All opinions expressed by Mr. Swarts are subject to change without notice, and the reader should always obtain current information and perform their own due diligence before making any investment or trading decision.

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