Tuesday, January 19, 2010

Update

Here is an hourly chart of day session e-mini trading. I had believed that Friday's supply shock was the start of a corrective move which would carry the ES at least to 1110 and probably to 1090. But today's activity has carried the market right back to the point where the supply shock began (green arrows). This tells me that the market is instead headed for resistance in the 1153-55 zone. This is the confluence of the top of the rising channel I have drawn on the chart and the top of what I estimate to be a 1135-1153 trading box (second blue rectangle). The bottom of this box is at midpoint support (purple dotted line).

I don't think this market is about to take off to the upside in any dramatic fashion. Instead we are likely to see a succession of rallies and breaks over the next week or two that won't make much net progress to the upside. At some point an oversold condition will develop on the advancing issues oscillators and that will mark the start of a sustained move to 1200 or so.

5 comments:

Teich said...

I also noticed that the down volume of last Friday's supply shock is almost matched by this morning's demand shock.

Adsense said...

Hi carl
do you see any mid section counts ??
I bring this up for 2 reasons
number 1 its been a while since you posted anything from lindsays work and number 2 , i followed 2 midsection counts from april 2nd and april 17 2009 . both called for point j on sept 23rd . technically this would imply a low
either march 1st 2nd or march 15th 16th . yet so far the market is still running higher .
any thoughts or your own work on this subject would be appreciated .
provided we do actually see a low in the early to mid march period then next higher would come between aug 7th to sept 4th .
tough call .

egnard said...

Same chart, different boxes, opposite prediction.

What's the point?

PM said...

Hi Carl,

The market is drooling at a possible Scott Brown victory. If he wins, all corrections will be canceled until further notice.

Thanks.

Kindest regards,

PM

jeff said...

As luck would have it, another up day, which, as I learned from McHue, makes it 18 out of the last 20 Mondays/Tuesdays since the March 2009. Interestingly, the 32 up Mondays since the low comprise over 80% of the total market gains. This would fit along the line of what Carl is saying that we meander in this level. If I find ourselves in the bottom end of this level headed into a Friday afternoon, I'm going to use this market manipulation to the upside to my advantage. Cause odds say the Monday will be an up day.

Just something to think about.