Tuesday, June 30, 2009

Possible supply shock

Here is a 30 minute bar chart of day session e-mini trading. I think a supply shock occurred this morning after the consumer confidence numbers came out at 10am ET (red arrows). Normally this kind of action would imply a drop to 870 or so. However, I have decided to give my short term bullish view the benefit of the doubt. This doubt about a move to 870 would be removed by high volume selling below the midpoint of the rally from 884 - the 905 level (red dashed line). Unless and until such selling develops I will stick by my view that the drop from this morning's high is simply a normal reaction in an uptrend into the 965-80 zone.

6 comments:

Tim- said...

market are reacting to grains markets. fear of deflation is rapidly returning. other than corn, wheat and soybeans are stabilizing. if they roll over equities go with them in the short term

Ron said...

Very good Carl.

Thank you.

Kishore said...

Carl, I agree with the morning sell-off being a supply shock. But I have doubts of the current drop to be a reaction because the previous rally that started on June 23 had completed 5 waves before today's fall. Moreover, the morning sell-off, i.e. supply shock, should make the current fall to be an impulsive move. And the reaction to the morning drop makes it look like a new short-term down trend.

vito said...

Hello Carl do you consider the volume in higher time frame charts. I was looking at the hourly and daily charts (SPY) and the volume does not look higher like it does on the 30 min.
Thanks
Vito

sanjay said...

wave 1 of 3 of 5 has commenced. Targed 820 beckons.

Enky Nakamura said...

Pluralitas non est ponenda sine necessitate

"plurality should not be posited without necessity"

So 905 midpoint held the fall, we are going up.

TCare