Thursday, September 24, 2009

Morning update

Here is an hourly chart showing day session e-mini trading. A supply shock hit the market after yesterday's Fed news and it strengthened this morning after the pit open. Such shocks can be identified by their unusually high volume and uncorrected price movement (red oval and arrows). In this context I think this supply shock is telling us that the corrective move which started yesterday will probably last four or five trading sessions (by my count today is the first day of the correction). So I expect a low sometime around the middle of next week.

The 1035 level still looks like pretty good support. It is the level of the last significant high on the way up and coincides with the lower green dash channel line. If the market should break through that support my plan B support is at 1015, the midpoint between the 1291 high in September 2008 and the 739 low in November of 2008. In either case I expect the next up swing to carry the market to 1120 or so by the end of October.


Moritz said...

Hi Carl,

Which software do you use for the charts?



Carl Futia said...

The chart you see is generated by Investor/RT and I mark it up using Hypersnap 6.

boris said...

Low so far, very close to 1044( 103.25), if market gets crazy and breaks this low after 13:30 today, we shall see 1027 ( Fifth Inraday Low Attracton Point)Fifth ILAP

Good Trading All

Teich said...

I think Carl is right...this sell-off can last a few sessions, as the bounces so far have been weak.

Btw, you can generate charts similar to Carl's using thinkorswim's thinkDesktop. Enable the option to hide futures trading after hours.

John M said...

Thanks again for the invaluable guidance, Carl.

Looks like we may take a pause here around 1040, but it may just be a setup for another post-3 p.m. slide.

Guess we'll find out soon enough.

extrader said...


Once again, GREAT CALL on this down movement... were u a little surprised it came down so fast?

Does this mean that it could drop below ur 1035 and head to 1015, because the drop was so fast?

Thanks for all ur input, day in and out!

Teich said...

Hi Carl.

Since you i) just introduced a 2nd candidate level of ES 1015 for support and ii) expected the corrective move to last 4 or 5 sessions, am I correct in assuming that this sell-off is much more severe than the previous two (Aug 17 and Sept 1) we had?

Thanks very much.

Market Karma said...

If carl is right and 1120 is the target for SP500 cash, then the Sp500 cash should first make a low around 1021, an interim high around 1059, and a final low at 999. Then prices will be ready to move higher to 1120. MK