Phantasmix Stock Market Blog

It’s pretty obvious that SPX is overbought and should correct any day now. That’s in addition to the negative news out after hours (Alcoa, (AA: 8.465 -0.41%), cutting capital expenditures and employement), which no doubt is just the beginning.

The question is how low will it go on this correction?

920, 887, 850 or lower?

Trade: either short DGP or long DZZ (favoring short DGP at the moment, this may change)

Trade is based on GLD levels –

Entry: break under $82.50 (bottom of the current sideways channel + bottom Bollinger Band)
First target: $78
Second target: $72.50
Stop: $84.15 (2% above $82.50)
Risk: $1.65
Potential profit: $4.50 (min)

Click charts to enlarge