Wednesday, March 03, 2010


Here is an hourly chart showing day session e-mini trading. The market is progressing through a stack of 36 point boxes (blue rectangles). It has moved into the third box and the bottom of this box near 1113 should now serve as support.

The upper green trend channel line meets the top of the third box around March 10 in the 1145-50 zone (green oval). The January 11 top was at 1148 (horizontal red dash line). I think a reaction of 20 points or so is likely to materialize then, but that any such break will be only a brief interruption of a move to 1200 that I see developing.

I have noticed a lot of commentary that cites the low volume, low activity in this phase of the upswing as a reason why the ES should soon reverse and head much lower. But as you can see on the chart above the market is creeping higher, showing a very regular sequence of higher lows and higher highs. Moreover, the advancing issues number that I follow (see my chart page ) are very strong. In this context I interpret the low volume as a sign that longer time frame sellers are not finding current prices very attractive. Volume will only increase noticeably when these sellers come to market and this will require higher prices than we have seen thus far.


janet said...

Carl after 1200 is hit do you still see the market advancing to near the old highs??? Thanks

Kishore said...

Carl, the low volume during RTH is due to lack of demand. The prices are being jacked up during the overnight hours at miniscule volume. Even higher prices are not attracting any buyers. This means greed not at play in the minds of the buyers. This is a very unhealthy market.

The situation is ripe for fear to set in, in the minds of the sellers. Then, there will be a scramble for the exit and we will witness a powerful down wave III unfold and you will be stacking the boxes in the downward direction.

P said...

Oh well, we _still_ have Kishore here. Boy, you are RESILIENT, aren't you? Think you've mentioned about thrice in the time I've been a reader to the blog that you'd not "waste time" in the comments section anymore. And back here you are.

Am sure none of the blog readers would mind you having here, but just *contribute* substance, if you can, rather than becoming another Jeff that everyone, I guess even including Carl, so got annoyed with.

Carl, if only I had sold around the HOD today, I'd had another contribution to the blog, alas, I didn't.

Thanks again for all the work you do in maintaining the blog.


Kishore said...

P, the market is all about greed and fear. This IS an important "substance"!

The buyers are currently not being greedy.

The greed of the sellers, as pointed out by Carl for their wanting higher prices, will soon be replaced by their fear.

In fact, the higher prices are being manipulated by the sellers during overnight hours but buyers are not biting during the RTH.

If you don't like or understand my comments, I am sure you are not alone. But, this does not bother me because, thank God, it takes all kinds to make this market.

TA.Stockman said...

It makes sense to me. I want to sell, but at a higher price so I'll wait...uh oh, the market is turning south...panic...better get out now before this thing crumbles.

Impatient to wait for a new high b/c I'm not convicted that it is a certainty.