Friday, November 06, 2009

Still upward

Here is a 30 minute bar chart showing day session e-mini trading. The trend of trading ranges is still visibly upward (blue ovals). The biggest day session break has been 16 points and a similar break from today's high would carry the e-minis down to 1053 (purple rectangles). That level is just a shade above midpoint support at 1050 (purple dotted line).

The market has been very erratic today after the release of the employment numbers. But this has only served to highlight a trading range between 1053.50 (the low in electronic trading after the news) and today's high at 1069.50. I don't think we will break out of this range today, but I do expect an upside breakout above 1069.50 next week. I still think this market is headed for 1120 and higher.

5 comments:

Wags94596 said...

A lot of low volume during lunch hour. Must be the parade for the NY Yankees effecting lower Manhattan.

jeff said...

Carl,

I think this is great analysis. I'm not surprised to see us meandering around these same areas today.

Ofcourse, if the market decides to throw another monkey wrench into the equation, I sense any break below 1050 would wreck the well-defined upward trendline?

Market Karma said...

I think there is a real test of correlations taking place. While the SP500 is laboring higher, there is developing evidence for a technical strengthening of the US dollar and US bonds (bond prices). Its possible we could see stronger US dollar, US bonds and SP500 but this would certainly be a change in the correlation have seen the past few years. Maybe its time to "Buy America"! At current prices, I find buying the US dollar and bonds to be more attractive risk/reward than buying the SP500. And fwiw, I am now hearing significant talk of a parabolic move upward in the SP500 into year end - spring 2009 as all the hedgefunds throw in the towel and buy for fear of being left behind by the indices.

Market Owl said...

I was surprised that the S&P brushed off the employment numbers so easily but people must have been poorly positioned for the day. It seems like there is a tug of war out there between those that have to buy and those that want to take profits. Shorts are mostly absent now because they have been burned so badly.

I am bearish on the market at these levels, I think a correction in November will surprise some people.

Wags94596 said...

I've been saying this for awhile now... it's ALL about the US Dollar! Until the dollar rallies, the stock market will continue to push higher.