Friday, November 27, 2009

Never mind!

Here is a five minute bar chart showing globex trading in the e-minis from yesterday afternoon through the early part of today's pit trading.

In this morning's guesstimate I said that the drop below the previous low at 1082.50 implied that the market would continue down to 1040 or so during the next week. The top of my day session range estimate for today was 1086. I was expecting that a the trading range that formed after this morning's low (third blue oval from the left) would contain any rally from the open.

Instead the market burst through the top of that trading range at 1085 and thus far has rallied as far as 1092.50. The day session high thus far is above the 1089.50 midpoint of the drop from 1112.25 to this morning' s low at 1067. This combined with the visibly higher trading range that I think is forming (last blue oval) is pretty good evidence that the drop below 1082.50 was a shakeout, not the start of a bigger downtrend. If I am reading the market correctly any reaction we see today should halt at or above midpoint support which stands just about at the level of the 1082.50 low (purple dotted line).

The market's action subsequent to the Dubai Global shakeout that we saw during the past 36 hours shows that the shakeout was seen as a buying opportunity by longer time frame traders and investors. The implication is that the up trend from the November 2 low at 1026 is still intact and that the market is preparing for a move up to 1140-50.


Kishore said...

It appears that the only participantsin in the market are the bulls. They take the market down to create buying opportunities and trap a few permabears and then the bulls take the market up and distribute at higher prices. Ever repeating shenanigans!

Wags94596 said...

Even thought it is a half Holiday session today in the US, end of the month buying should cushion any selling over the next couple of days.

me said...


Thursday, Nov 26, 2009. World Equity Indexes. Canada down 1.70%, Mexico down 2.76%, Brazil down 2.23%, Latin America down 0.13%, UK down 3.18%, Germany down 3.32%, France down 3.41%, Spain down 2.57%, Europe down 3.28%, Japan down 1.35%, Hong Kong down 1.96%, China down 0.75%, India down 2.0%, and Australia down 2.59%.

TODAY 11-27):
US S&P 500 down 1.16%, NASDAQ down 1.07%, and DJIA down 1.04%, Canada UP 0.60%, Mexico UP 1.93%, Brazil UP 0.61%, Latin America UP 1.45%, UK UP 1.41%, Germany UP 1.78%, Spain UP 1.31%, Europe UP 1.57%................ Japan DOWN 2.26%, Hong Kong down3.44%, China DOWN 2.70%, India DOWN 1.32%, and Australia DOWN 2.93%.

me said...

Some big players made a good chunk of money overnight. The S&P 500 is back up to 1095 from 1083. Unusual big gaps up and down for the last two weeks. Somebody is manipulating the market.

Kishore said...

me, it appears that the Australians have it right! Or maybe because they are down under?

Carl, with two islands above and the initial big move down in the ES Futures, the rally today is only a reaction.

Incidentally, what we saw in the last 36 hours was how the market will respond to debt defaults. There are many dead-beat debters, waiting in the wings. This market can crash anytime.

jeff said...

Nevermind? While the market has rebounded up above the mid-point, we are still short-term overbought and today is a very thin trading day. 8 out of the past 9 Monday's following the Thanksgiving holiday have been down and I'm still looking for a re-test into the 1070area. That being said, today's climb is 'all' about the dollar fall from the market open. The correlation there is almost ridiculous, but that's what everyone is watching.

I think the big technical hurdle that is being watched is 1100, which was almost the high for the morning.

I'm looking for buyers at the open have some quick gains into the close On a half-day of thin trading like this, I'm looking for the profit-taking to be a bit more aggressive than it would be otherwise.

Kishore said...

me, that someone is the US government.

Bernanke "solution" of giving booze to alcholics will backfire bigtime.

The market will crash not so much due to a bad economy as it would by debt default, by one an all. Even the banks will not return most of the deposits and FDIC is already broke.

Pelican said...

have you heard about PPT??
or know the word "manipulation"?
can you explain why everyday if the market is down, at ~ 10:30, 2:15 and 3:30, dip-buy express trains will depart with no exception?
i think these factors should be considered before making any prediction.

me said...

Dubai is making an excuse to take some profits. This is a manipulation. U.S. market did not get hit too hard.

I believe S&P 500 will go back up a little bit 1100's tomorrow then back down again to about 1050's (10 days down = Dec 10 or 11). In the meantime, most investors sit on the sideline with large % of cash and ready to jump back in for some cheap stocks; this will drive up the stock market again. Long term trading is still bullish.