Friday, July 10, 2009

High of day

Here is a five minute bar chart of e-mini day session trading. Today's range estimate is the blue rectangle. The market rallied from its open at 872.50 all the way to 880.25. This was just a shade above the midpoint of yesterday's day session range which coincided with yesterday's close (purple dotted line) - both useful resistance levels.

Then sellers entered the market (red arrows), putting in a wide range down bar on heavy volume. This looks like a decisive rejection of the 880 level and makes me believe that today's day session high has been established. I now think the market will drop to or perhaps a little below its recent low at 865.25. In my view this action is all part of a base building process which I think will be completed next week. The next big move should be upward into the 965-980 range.


Kishore said...

Carl, it is very great of you to share your thoughts. As a trader, it is very important to not confuse oneself with all the BS on the Blogsphere.

Your postings are concise and precise and backed by a simple logic.

Even though I trade according to my own rules, your commentary helps me keep a clear thinking. I don't know how to thank you!

John M said...

Looks like a flag has been building since then meaning a continuation in the direction just preceding, which is up. Maybe we'll hit that 885 yet.

Flags, like head and shoulders, don't always pan out as such, of course.

Ron said...

Beautiful Carl. What a great call.

Thank you.

Ron said...'s 1:40 and this market doesn't want to move lower....I am suspecting we just may have the bottom already in.

John M said...

I was wrong about the little flag, the formation broke down around 11 a.m. But the nature of the reversal down from the high looks corrective and I wonder if we won't see the market get 'gunned' into the close on low volume as we've seen repeatedly in recent weeks.

Nice going, Carl, thanks again for the targets lately.

catherine said...

I wonder on what you base your building scenario to 965+?
EW analysis suggests the opposite to 800 and then later to 710-720.
Usd zar , jpy crosses are all showing signs of risk adversion. Almost all markets and sectors confirmed downtrends this week.