Thursday, August 27, 2009

Update

Here is a 30 minute bar chart of day session e-mini trading. I thought today would be a bullish day but as you can see sellers took control of the market from the open. I am still long one unit and intend to stick with it unless the market starts spending time below 1015.

The 1015-1016 zone should prove to be strong support. The upside breakout level was 1016 and 1015 is the midpoint between the September 2008 high at 1291 and the November 2008 low at 739.

If this support should fail then I would expect a break about equal to the August 7- August 17 drop which was 40 points (purple rectangle). I still think this is the less likely outcome and expect the drop below 1020 to prove to be a terminal shakeout rather than the start of a significant drop. In this regard I think it is significant that the volume this morning has not been unusually high when measured against similar early morning drops recently (green ovals). I would also point out that so far today's day session range has been exactly as big as yesterday's, making it likely that the 1014.75 level is today's low or very close to it.

If I am reading this market correctly it is forming a low point that will define the lower boundary of a trend channel (green dotted lines). The next up swing should carry the e-minis to the upper channel boundary which is close to or even above midpoint resistance at 1054 which is defined by the May 2008 high at 1442 and the March 2009 low at 666.

12 comments:

Jim said...

Carl

I agree with you; where to add on?

Moody said...

Agreed as well and its proving to hold. nice call

Larry Primas said...

Nice call Carl. I was beginning to think the market would fill the gap set on August 21st when it first fell below 1016. As you suggested, there is strong support in that area.

Now let's see if the market can rally to your next target at 1054.

LP

Denali92 said...

Today does look very much like August 5th and August 11th with a BIG down first hour and then a rally, which eventually took us higher. Another positibe is month end is on Monday....

Still concerned about that gap at 1004.75 and would think that a move down to close it would serve as a better launching pad for us.

Carl: If we do go fill the gap, will you feel we then have further to go down?

Kishore said...

Carl, unquestionably, you are the best reader of the mentality of crowds or "herds"!

I salute you!

angel* said...

CARL, so far you are AWESOME!! :)

Epicure said...

Carl,


I can always count on you to confirm my gut feeling. You have talent!

Jim said...

Carl

I hope al is well.

I think you're a AWESOME educator.

fiki said...

Carl,

Good call there. The Bernanke upthrust prooved to be a good support.

I wrote this once before on your contrarian blog. Your book! It really helped me. Not your contrarian setups or your bullmarket beliefs but it made me realize that I was dancing to the bearish pipers tune. I really recommend this one to everyone that is in the market. It´s a eye opener.

inversorX said...

Carl are you holding overnight these positons cause you believe too many people is bearish.

Is this a contrarian bet?

Piazzi said...

you sat out the tail end of a wave 4, good job!

tapped out said...

Carl, I cannot see us closing out Monday, August 31st without nailing down your 1% up tick on the $INX 200 day moving average. From our close today a drop of more than 42 points is necessary over the last two trading days of the month to miss that mark, ain't going happen! My bullish ETF allocation is just iching to be increased. Let's Rumble!