Tuesday, March 23, 2010

Breakout imminent

Here is a 30 minute bar chart showing 24 hour trading in the e-minis. The market made a couple of attempts to break below the 1160 level this morning but both failed. This looks like a bullish rejection of 1160 and I think it portends an imminent move above the high of the second, 9 point box I have drawn on this chart. If so the market should be trading near the top of its third box sometime today or (more likely) tomorrow.

15 comments:

Tim Mack said...

JPM has a size resting order at 65.00 in the bigs that has been keeping a lid on it so far. Over the last few days they have sold over 2,000 cars at or near that figure. Today they showed 500 cars there. Locals have run from it so far.

Kishore said...

Four attempts, three of them today, to break ES high of 1165.50 have not been able to make Jack jump from the lower box to the upper box.

Carl thinks that Jack will keep trying and somehow make the jump "sometime today or (more likely) tomorrow". Jack is pretty stubborn (bull-headed) guy!

Sailor said...

Tim - nice inside the ring info - are you a floor trader? How do yo know this? In any event keep it coming -

Brian

Jedi said...

As it is written, so it shall be done, apparently.

Nice call.

Wags94596 said...

The JPN "offer" is obviously a part of a stock-index arbitrage position. They are selling futures and buying stock for a client.

That's how the index-arb game works.

P said...

Yet again Mr. Futia does it! Perhaps you should let us know how to express our gratitude/appreciation. Is donation to the blog the best way? :)

Thank you much (again!) Carl!
-PA

Geo said...

Remarkable interpretation of the price action in making the breakout call. Quite obvious in hindsight, of course. Re big guys (JPM, GS etc.) staying at the offer etc., may be useful for the locals to gain some ticks, but the big car and the ES are arb vehicles - tough to interpret their order flow for little guys trading 1 or 2 lots of the ES. Lot of obfuscation by the big houses and big traders. This is what makes the ES tough to trade short term for many retail traders. Mr Futia makes it elegantly simple. Simple, just not easy. :-)

tellzhang said...

Tim - Forgive me since I am novice here. So you mean JPM will go to 65?

Nick said...

Mr.Futia,

It has been a while since I've seen you hold over night. According to Darvas' approach, a purchase should occur once the next box is entered. You often buy before this level is breached which allows for more potential gains on a break away. He also used hard stops below the top of the last box but you almost always sell before then. Great Work!

Cheers!,
Nick

Jim said...

Tellzhang: No, he is saying that JPM was willing to sell 500 large futures contracts at 1165 (and previously sold 2000 over the last few days around that price).

Jim said...

Carl, you've made clear for some time that you expect SPX to reach 1200+ over the next couple of months. Do you expect to go more or less straight there, or do you expect a substantial correction first? Also, what are you expecting if/when we reach that target? A correction? A meltdown? Do we just blow through it and keep going to substantially higher prices? Thanks in advance for sharing your views.

Geo said...

tellzhang: The reference is about JPM working a biggish sell order at ES (S&P emini futures) price of 1065, implying some sort of resistance at the level till taken out, which it was. Discussions here are about the ES market moves.

JayW said...

Tellzhang he meant that JPM had a large client order for sale at 1165on the ES. Sailor, Tim probably got that info from Ben's trader audio. They call out the trades from the Pit. I believe some brokers offer it for free now, but it is a pay service. I listen to it pretty much every day.

Geo said...

Price typo above in my comment ... should be 1165. I may still be in the 10 handle due to this relentless rally. :-)

tellzhang said...

Jim, Geo and JayW, thank you all for help and thank Carl for this wonderful blog.