Thursday, December 17, 2009

Sold one long unit at 1094.50 - a drop below 1090 is likely later today


extrader said...

I am looking for 1089 to be MAX LOW for today!

khoekz said...

Carl, I have been following your for a while - and thank you for your insight - btw.

But I don't understand your last post - why is a drop below 1090 likely?
Because we broke downside support?

I went long UPRO at 144, and am looking up, in my opinion, with options expiration, we should be seeing 1105-1110+ as early as tomorrow.

Can you show us what you are seeing with a chart?

Much Thanks,


jeff said...


If the SPY doesn't hold 110, this market is going to drop like a rock. Why?

First, up until earlier this month, the Euro and S&P had been trading side by side. However, as the Euro has crashed after falling below its 's March 2009 trendline. Just 10 days later, the Euro is back trading at levels not seen since the July/August timeframe. I think if the SPY falls below the 110, the bulls are going to get punished.

One potentially piece of good news is the Euro filled a large unfilled gap and could bounce, but I don't suggest folks step in front of a falling knife if the Euro continues to fall. Ironically, I think it's interesting the Euro had a huge upswing this time last year. Only now, we're seeing the opposite occur.

For me, the key level is SPY 110 on a closing basis. If this breaks, I'm adding to my shorts. If it holds, your upswing could still happen.

Teich said...

If ES drops below 1090 today, it will make a classic 5-wave down move intraday.

Adsense said...

looking to me like we are putting in a low if the low was not already seen, many equal time distances lining up daily hours and even down to 3 min bars daya to day on the dow .
sso clear narrowing triangle formation which just had hits 5 th
touch point .
we may have already seen the bottom
if not we should know by monday

jeff said...

For what its worth, the S&P filled an unfilled gap at the almost similar time the Euro filed it's September open gap.

As you can see, the bollinger bands on the S&P daily charts are as tight as we have seen them at anytime in over the past couple years. And you know what happens next, there will obviously be a volatility squeeze. We simply need to wait to see if it's up or down and go long or short accordingly. For now, the upper bollinger band is ~1117 and the lower bollinger band is 1088. Ironically, the 50 DMA is also 1088. As of this writing, we're dead smack in the middle at 1100.

Elliott Wave folks think we've finished or on the verge of finishing Wave II down within a 5 Wave structure and typically, Wave III up is the strongest wave of the V. As such, I'm leaning towards Carl's scenario that will plug forward towards the 1140-1150 by the 1st or 2nd week of January.

Any trade above 1105 will tell me Wave II down is complete and we are on the verge of going up.

I think the best thing that can happen here is we meander around these levels and let the bollinger bands get even tighter. That way, it will be even easier to know which way the squeeze is going to occur.

Kishore said...

1093 is support again. Will it be broken? If it is not broken, we will be making a reverse head and shoulders on 5 minute chart.

Kishore said...

Instead of making the above-mentioned head and shoulders pattern, we made a double bottom at 1091.

Trends are hard to play.

Greed makes us hold it too long and all the gains are gone.

Fear makes us exit too early and all the potential gains are left on the table.

Is there an easier way?

jeff said...

Update: The SPY hit a low of 110.08 and remains above the March 2009 trendline. If this breaks, I'm looking for a mirror image of the FXE chart over the past 10 days.

My sense is tomorrow we go up tomorrow as it's options expiration day and come back down Monday and Tuesday(basic churn) and stay around these same levels. By then some of the overbought readings will have worn themselves off.

For now, we're still stuck right in this tight bollinger band and continue to get to watch this sideways action.

Boring yes, but I suspect we'll have a resolution soon.