Monday, September 21, 2009


Here is an hourly bar chart of day session e-mini trading. The market has rallied from its low today about the same amount as the previous rally on the way down from its temporary high at 1071.50 (purple rectangles). This action, especially coming after the break of the steep, red dash trend line is telling us that the odds now favor a drop below the 1050 level today and eventually a move to 1035. The market should find good support near 1035 at the conjunction of an previous top (horizontal red dash line) and the lower green trend channel line.

However, it is important to remember that the underlying trend is upward. So if we should see strength above the 1062 level I will start looking for a move to the upper trend channel line which stands roughly at 1080 at the moment.


Kishore said...

Carl, great commentary!

Hopefully, this will show some light at the end of the tunnel, to the battered bears, at least for today!

vinaydh said...

IMO we will see 1090 before 1035, if at all we are going to see 1035. But then market is here to confound one and all. We will see.

Robert said...

If the e-minis drop to 1035 it would be the death knell for this rally off the March lows. Any drop below 1039 SPX cash signals the top is in or at very best a slightly higher high would be achieved. 1100 plus would be out of the equation.

Market Karma said...

The market is like driving north on the highway. Sep 21st is an exit, an opportunity for the market to change directions. But if prices goes past the exit, then the market must continue to the next exit to change directions! In other words, if a top is not established during the Sep 21st time frame, watch for prices to continue high to the next exit which could be well past S&P 1120. The market moves in discrete increments.