Tuesday, January 26, 2010

Update

Here is an hourly chart of day session e-mini trading. I have drawn the progression of boxes from the start of the correction. Each is 12-15 points from top to bottom. The market has been a little stronger today than I initially expected. But it is trading near the top of its current box. I think another break will start later today and carry the ES down to a low near the bottom of the next box. This low should be in place this week and a rally to 1200 will be the next development.

14 comments:

Teich said...

Not sure the big break will start today, as we had a high-volume (~300k contracts) wide-ranging up candle in 30-min ES at 10 AM EST that brought ES to the 1095-1096 area.

Kishore said...

Overnight low for ES was 1081. We have moved up almost 20 points from the low. We are currently trading close to the top of today's range.

Yesterday, there was a sell-off after 3:00 pm EST.

What shall today afternoon bring?

I doubt there will more upside. Bull case - sideways. Bear case- Big Sell Off.

Teich said...

If we break ES 1100, the buy stops there will do the buying.

Look at QQQQ; it is already trading above the consolidation zone established back in Nov & Dec 2009. The 3-day reversal candle pattern also looks convincing.

Kishore said...

When will the market drop?

As soon as I cover my short!

curt said...

kishore...i feel ur pain!!

Teich said...

LOL to Kishore. Of course Carl was right about today while I was wrong.

Kishore said...

Jack up in the morning, sell-off in the afternoon, spells typical bear market behavior.

Time will tell whether the rally from March 2009 was a FED fed bear market rally or a new bull market.

Carl, most probably, it was a bear market rally.

daytrader233 said...

NIce read Carl!

Kishore said...

curt, there is no gain without pain. I have had my share of the pain in the past. But now, it is has been, relatively speaking, more fun.

What we do as traders is far more important than what the market does. As traders, we always have many options. The question is, "Do we chose the right option?"

Carl gives a very good perpective for viewing the market.

Aarpenn said...

Carl,

That was a great call!

Shawn said...

Carl, you so damn good today. Prescient call.

But you did not trade?

mam said...

Carl, over the last few days you have been uncannily accurate in your forecasting.

Very impressive

Win said...

Carl,
The elephant in the room is the Fed statement tomorrow. If the Fed repeats that it will remove liquidity, or toughens its language, the dollar will rise to $80 very fast. On the other hand, if the fed is accommodative, we will have seen the end of the equities correction.

George said...

if i had to guess, i think we see a 20-30 pt rally begin tomorrow from 1075-1080 and then a drop to 1145-1150ish, which would end next friday on payroll data