Here is an updated 5 minute bar chart of the e-minis. Following this afternoon's demand shock sellers stepped in. The market dropped from its rally high at 848.50 all the way down to 829. this was slightly below the halfway point of the rally(horizontal green line) and retraced about 70% of the demand shock itself (which I think started at 821). This is perfectly normal. As I look at my quote screen I see that the market has rallied back to 841. This is a sold indication that the demand shock is still controlling the market's trend. Tomorrow should be a bullish day. I expect to see the e-minis make it up to the 865 level tomorrow or Monday.
Thursday, January 15, 2009
Late Update
Here is an updated 5 minute bar chart of the e-minis. Following this afternoon's demand shock sellers stepped in. The market dropped from its rally high at 848.50 all the way down to 829. this was slightly below the halfway point of the rally(horizontal green line) and retraced about 70% of the demand shock itself (which I think started at 821). This is perfectly normal. As I look at my quote screen I see that the market has rallied back to 841. This is a sold indication that the demand shock is still controlling the market's trend. Tomorrow should be a bullish day. I expect to see the e-minis make it up to the 865 level tomorrow or Monday.
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Hi Carl,
I believe this rally could run higher and longer than most rallies in this bear market.
First of all, I also question the length and strength of this current move; this is to be expected in a bear market. However, the reason I even suggest that this could be a bigger move is because of yesterdays price action. My indicators and models all were telling me that 808.50 was the end of the sell off for this immediate down cycle, 808.56 to be exact was the market's reaction point. Since the SP futures only move in .10 ticks, it could only be 808.50 or 808.60, but in either case the market never even got down there. In most cases, I don't see prices ever reach these reaction points, and yesterday was no exception.
Now, since the market broke this past September, prices have been reaching and going beyond these reaction points. Yesterday was now the exception to the last few months; this indicates more strength than normal considering the price action of the last few months.
I could be completely wrong and we could see new lows within a few days, and I would not be surprised, and if so I'll be short once again. But, because the reaction point was not touched before this rally began means that this rally has some inner strength and could carry this move higher and longer than most people anticipate. As a rule, after prices touch or get close to these reaction points (within a tick or two), there is a highly spirited rally, and, of course, visa versa with an overhead reaction point after an extended rally we see high volume selling. This means there is now a reaction point above the market, and if we get close to it, I will be selling with both hands.
I actually added another long at 814.00 yesterday not knowing that it was only a few ticks off the low. I honestly couldn’t submit a post to your blog at the time since I was too busy chewing my nails and staring at the one minute bar chart. LOL!!!
Thanks.
Kindest regards,
PM
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