Thursday, November 05, 2009

Why I think the trend is up

Here are two charts showing e-mini trading activity. The top chart is a 15 minute bar chart showing day session trading recently. The bottom chart is a daily bar chart going back to the early July low.

On both charts I have drawn blue ovals. These ovals are meant to encompass trading ranges that the market has established. They are impressionistic, but I think impressions built from experience matter a lot. In each case you can see that the sequence of blue ovals moves steadily higher. This is the most basic behavior that you can observe in any auction market. The pattern of successive trading areas, higher or lower, tells you the trend.


janet said...

I think you're spot on....great detective work Mr. Carl.

Gardener said...

Good to see ~1040 held, agree with your analysis.

The rounding is disconcerting for the bulls, however.

MaverickUK said...

Carl - you are blind to what is happening. Just as you were blind to the sell off from the TOP!. Let's see if we sell off even harder tomorrow, as volume will be heavy and when volume is heavy there is only one way this market is going.

khoekz said...

Carl - I hope you get as big of a chuckle out of Maverick and other perma-bears as I do. Why do people insist that the market is going to crash? The crash happened. I live in Michigan - the worst of the worst - malls are full, restaurants are packed and I just sold my house for full price. The market was oversold, and now its a new bull rally, just like following any other crash. I am long and have been for a while, laughing all the way up.

Thanks again for your insight Carl.


ARJ said...

Really don't like this MaverickUK's comment, it's really out of line...

Kishore said...

MaverickUK, as per Uncle Ben of FED, the recession is over and today's employment report shows "better than expected" and smaller number of umemployment claims.

The market may like tomorrows's unemplymnet rate so much that it may just take off.

If an ever-growing amount of BS and worthless printed paper can keep everyone happy, cooking numbers is a lot easier. Don't be a skeptic.

Let us all remember that BS carries more weight than the little cherries that bears can muster!

MaverickUK said...

I apologise if my post was a bit strong Carl - I think you have been incredible in your judgement in the markets up until recently. Further, as regards the non farm number tomorrow - I don't think it matters what they are - I think this market will sell off.

It was pumped to the eyeballs yesterday to make people think this market is going higher but only for the rug to be pulled from their feet.

Andrew said...

I think there is disagreement on the trend because we aren't necessarily looking at the same timeframe. The charts you have posted are 60 minute, and you're right, the trend is clearly up.

But, zoom out to the daily (a timeframe I think you should consider devoting more analysis to), and the trend is a little more ambiguous. The major indices are sending mixed signals.

The SPY is still in an uptrend, but the trendline since the March lows has been broken. People make too big of a deal about broken trendlines, but they are an early warning sign. Until there is a close below 102, the trend is still up. It will be a certain feat for the SPY to get back above 110.

QQQQ is weaker than the SPY as it touched major support. Trendline broken. Still in an uptrend however.

DIA. Uptrend. Nothing wrong with the chart.

IWM is absolutely no longer in a uptrend on the daily. It's not in a downtrend either yet but the message there is clear.

So mixed signals. Will the Russell lead the other indices? Time will tell.

Andrew said...

Ha! I just realized your charts here are 15min and daily. So much for my observation skills. :-)

Wags94596 said...

Maverick, I think that it is pretty clear that you are nothing but a "perma-bear" and really add no value to this blog commentary . . . you continue to focus on things that "fit" your BIAS like most people that have tunnel-vision and do not trade successfully for a living.

Carl is pretty good at what he does.
I think it's time to stop being so critical of someone that actually knows how to make money TRADING.