Thursday, January 28, 2010

Nearly done

Here is an hourly chart of day session e-mini trading. I went long this morning figuring that there was a reasonable chance that yesterday's low ended the correction. But sellers took over the market and as you can see the ES has dropped to 1075, the first target level I pointed out a couple of days ago. At 1075 the drop from the 1148 top is as big as the October-November 2009 reaction from 1099 to 1026 (blue dash rectangle). At the secondary target of 1057 (solid blue rectangle) the current correction would equal the June-July 2009 drop.

I think the ES is about to begin a sustained rally. The first bullish sign would be a move above midpoint resistance (purple dotted line) and the descending red dash trend line.

As you know I think the ES will reach the 1200 level in the next couple of months.


Jim said...


Nice call on the ES so far this month.
Will January's sell off reflect the statisical inference for the rest of the year?

Narayana said...

Is it relevant that /NQ (Nasdaq) has already corrected a large point-move than it did in either of the previous large corrections?

Bill said...

Amazing. That's all I have to say about the way Carl saw this correction coming before it even had started. I disagreed with Carl at the time and thought the market would keep going up with some minor 10 to 15 point corrections once in a while.

All said and done though. Now I do fully agree with Carl that the market is about to begin a sustained rally.

jeff said...


I believe we will finally have a retracement, but the top is in my friend. for all of the prior reasons I indicated before. I could see us retrace up to the 1115-1120 before the next big far begins.

I expect the S&P to be at 1015 by the end of February.

Kishore said...

jeff, I agree with you. The Bear Market Rally, aka "FED Gone Wild Rally", is over.

The politicization of the market and the outright manipulation has scared all the investors away. Only HFT computers are playing with each other and maybe a few unemployed folks are trying to generate some income.

Unfortunately, the HFT computers are hard to play against. With thousands of trades a day, generating artificial voulume, playing pong with each other, and knowledge of our positions, they manipulate the market to maximize our losses.

Wags94596 said...

Looks like yesterday was merely the end of Wave III to the downside followed by the rally into the close and slight "gap" up this morning (Wave IV) before the market fell apart down into Wave V to finish off the entire sequence down off the highs.

Notice that the first leg down was 21 SPX points, which equalled todays move down to 1079 SPX. IN other words 5=1 at 1079 SPX.

Time to Rally!

Win said...

The RUT is doing quite well, comparatively.