Shoot the Moon

Steve Rushton April 19, 2021No Comments

I'll shoot the moon right out of the sky
For you baby
I'll be the pennies on your eyes
For you baby
I want to take you out to the fair
Here is a red rose ribbon for your hair
I'll shoot the moon right out of the sky
For you baby
I'll shoot the moon for you

Tom Waits, I'll Shoot The Moon, 1990

…

Market at all time highs, money printing to the moon, tulip manias, inflation in commodities and assets.

What could possibly go wrong?

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The market consolidated under 3950 in late March before popping up and through with the most recent S/T Buy Signal on 26 March at 3927, breaking a declining sequence and making several weeks of new all time highs.

The T volume oscillator* rose rapidly with price up through the cash build up line ** indicating a new T structure was emerging projecting initial price highs in early and mid April, possibly beyond.

Price has continued higher but the T volume oscillator has remained relatively muted and not made new highs. This is a bearish divergence and indicates profit-taking and re-cycling as price becomes increasingly exhausted and potentially unsustainable.

A slight improvement in recent days but this is flashing a warning.

* The T volume oscillator is an indication of Buying Power within the market as a whole
** The cash build-up line is a declining line drawn above a series of lower highs made in the oscillator.

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In the weekly chart below, we can see that price continues to break upwards above the important trend line from the 2012-14 peaks. This shows extreme strength and especially during the last 2 weeks as it moves outside the range of normality (from a bollinger band perspective at least.)

Previous parabolic moves have eventually resulted in significant corrections adding to the current danger and have the potential for declines to the 'mean' or to the lower edge of the channel, or even to the beginning of the previous advance.

A move below 4000 could therefore target 3550-3600 or even lower to 3280 or thereabouts.

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The monthly chart provides an interesting perspective with April already looking excessive.

The recent Large T structures could be projecting highs in August 2021 and April 2022.

BUT the Mega T structure projects an important high for April 2021 and it may be this structure that is drawing price higher and higher. Given that price seems delirious and excessive, it would be sensible at least to take this projection with some seriousness.

The Mega T structure is drawn from as far back as possible and potentially projects the final high from the 2009 low because it is drawn from the high that is above the 2009 low that is as far back in time as possible – April 1997.

Hopefully I am wrong and there other forces at play but the recent tulip mania in the stockmarket (think Gamestop, Bitcoin, Tesla, etc) also suggests that we are now seeing a bubble… and bubbles can burst.

Be prepared.

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2021 continues to bring a market with a range that has become increasingly expansive since the move above 2500. With price above 4000 we can only assume that this will continue. This is a Brave New World.

–

Regardless of whether the market can continue higher or whether significant lows are ahead of us, the simplicity of the proprietary price based S/T Signalling System will continue to keep us on the correct side of the market, with price currently on a Buy Signal since moving above 3927 on 26 March 2021.

If you would like to learn more about using the S/T Signalling System please get in touch.

–

To receive detailed daily analysis, guidance and the updated daily Buy / Sell trigger levels being generated by the Trading the Line system before the market opens, and intra-day alerts when appropriate, please become a Member and Sign up for Alerts & Observations – includes access to Members Area, Explanatory Notes (pdf) for all of the concepts discussed, and Notes on Day Trading (pdf)

Disclaimer: This is the diary of a personal trading system, its methodology and the signals that it is producing. You are welcome to follow along but please understand that the information presented here is for educational purposes only. No recommendations are being made to buy, or sell stocks, options or futures contracts. Please consult your own financial advisor before making any investment decisions.

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2026 Positions

(All numbers refer to SPX)

S/T SELL Signal below 6845 on 03 Mar

COVER Short Signal above 6877 on 02 Mar

S/T SELL Signal below 6850 on 02 Mar

COVER Short Signal above 6857 on 27 Feb

S/T SELL Signal at 6857 on 27 Feb

COVER Signal below 6884 at 6857 on 27 Feb

S/T BUY Signal at 6884 on 23 Feb

COVER Short Signal at 6850 on 23 Feb

S/T SELL Signal at 6837 on 23 Feb

COVER Signal at 6864 on 23 Feb

S/T BUY Signal at 6883 on 18 Feb

COVER Short Signal at 6834 on 17 Feb

S/T SELL Signal at 6888 on 12 Feb

COVER Signal at 6915 on 12 Feb

S/T BUY Signal at 6899 on 06 Feb

COVER Short Signal at 6938 on 06 Feb

S/T SELL Signal at 6901 on 04 Feb

COVER Short Signal at 6915 on 03 Feb

S/T SELL Signal at 6915 on 03 Feb

COVER Signal at 6942 on 03 Feb

S/T BUY Signal at 6968 on 02 Feb

COVER Short Signal at 6938 on 30 Jan

S/T SELL Signal at 6910 on 30 Jan

COVER Signal at 6940 on 30 Jan

S/T BUY Signal at 6934 on 29 Jan

S/T SELL Signal at 6907 on 29 Jan

COVER Signal at 6934 on 29 Jan

S/T BUY Signal above 6905 at 6923 on 22 Jan

COVER Signal at 6849 on 21 Jan

S/T SELL Signal below 6894 at 6843 on 20 Jan

COVER Signal below 6925 at 6843 on 20 Jan

S/T BUY Signal at 6961 on 15 Jan

COVER Signal below 6934 at 6925 on 14 Jan

S/T BUY Signal above 6890 at 6900 on 05 Jan

COVER Short Signal at 6864 on 02 Jan

S/T SELL Signal at 6837 on 02 Jan

Mission

It has been my Mission to create a simple but effective method for investing in the stock market, so that I would always know what to do regardless of the circumstances.

The result is a rigorous system which allows the market to tell you what to do, when to Buy, when to Hold, when to Cover, and when to Sell, and it removes the need for you to have any opinion whatsoever.

And so, I present to you the diary of my personal trading system, and a record of the signals that it is producing. You are welcome to follow me along but please understand that the information posted here is for entertainment purposes only. No recommendations are being made to buy, or sell stocks, options or futures contracts. Please consult your own financial advisor before making any investment decisions.

Please sign up for my occasional FREE REPORTS and if you would like to find out more and receive my email alerts and more detailed observations, please SIGN UP HERE

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“In the end, I’m not interested in that which I fully understand. The words I have written over the years are just a veneer. There are truths that lie beneath the surface of the words... truths that rise up without warning, like the humps of a sea monster and then disappear. What performance and song is to me is finding a way to tempt the monster to the surface, to create a space, where the creature can break through what is real and what is known to us. This shimmering space where imagination and reality intersect... this is where all love and tears and joy exist. This is the place. This is where we live.”
Nick Cave 20,000 days on Earth

“If you're going to try, go all the way. Otherwise, don't even start. This could mean losing girlfriends, wives, relatives and maybe even your mind. It could mean not eating for three or four days. It could mean freezing on a park bench. It could mean jail. It could mean derision. It could mean mockery--isolation. Isolation is the gift. All the others are a test of your endurance, of how much you really want to do it. And, you'll do it, despite rejection and the worst odds. And it will be better than anything else you can imagine. If you're going to try, go all the way. There is no other feeling like that. You will be alone with the gods, and the nights will flame with fire. You will ride life straight to perfect laughter. It's the only good fight there is.”
Charles Bukowski, Factotum, 1975

>“The mind is a glass floor.
The mind is the spirit’s tear.
The mind is our prior and subsequent ghost.
The mind is the Bullion Express and the blood on the tracks.
The mind is a stone door.
The silver on the backs of mirrors.
The wave that defines the coast.
It’s what the drunk grave robbers couldn’t stuff in their sacks.
The mind is the sum of all and more.
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The contract between the lash and the whipping post.
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A meaningless argument among whores.
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The mind is neither either nor or.
The real center of an empty sphere.”
Jim Dodge, Stone Junction, 1990

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The Gambler (2014), Dir. Rupert Wyatt

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