Bill Luby at Vix and More (link) writes about the "line in the sand" for the bears at 1000 for the SP500 futures. (SPY is the ETF that is close to the SPX futures and is the one I typically trade.)
>> Bill Luby wrote:
Sooner or later, the bulls will run out of steam, the bears will get tired of retreating and we will have some semblance of a top. With SPX 1000 just around the corner, tomorrow the last trading day of the month and a number of overbought signals being pushed to extremes, today or tomorrow looks like a good place for any bears left alive to make their stand.
>>
It reminds me of a story, I believe it is from the first "Market Wizards" book. Anyway, the story is about a commodities trader who is has been heavily long a certain commodity for several weeks. Another trader asks "where is it going?" To make it relevant to the current setup, the answer would be "SPX is going to 1000." Where is it now? SPX 992.
Upon thinking a moment about that setup, the trader liquidated most of the long position. Sometimes it is that clear, if a person stops to think that the target price is less than 1% away. For position traders that are straight up long, there is little need to squeeze out the last percentage point. For hedgers, option traders, the math and analysis can get much more complex.
Long INTC, IWM, XLE, MTB, CELG, AMGN
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