Thursday, May 27, 2010

A bullish picture


Here is a 30 minute bar chart showing day session e-mini trading since the April 26 top. I think this chart presents us with a bullish picture. Here's why.

Note that the low at 1037 on Tuesday occurred at the bottom of a trend channel. I might also note that 1041 was the midpoint between the 866 low in July 2009 and the 1216 top on April 26. Since that low the market has produced two consecutive higher trading areas (last two blue ovals). This broke the string low steadily lower trading areas that had developed during the drop from 1216. More significantly, the last of these trading areas (the one developing today) is entirely above the steeper declining red trend line I have drawn. This is added confirmation that the pace of the drop has changed, presumably the early warning of a new swing upward. A similar inference can be drawn from the fact that the market today has spent most of its time trading above yesterday's high.

I think the ES is in the process of breaking out above the upper boundary of the past week's trading range (dash green line). The first part of the breakout swing is likely to carry to the top of the green trend channel near 1110. A reaction down to 1090, the breakout level, would be normal then. A more significant reaction will probably develop once the ES reaches the confluence of the declining red trend line and the rising green line (green oval).

I think a very big move upward is about to start. It should carry the ES to 1300 by the end of the summer.

14 comments:

inversorX said...

It´s curious.

2 days ago, 95% of people was calling to a downward movement (and newspapers telling about crash studies)

Yesterday and today I read at least 3 blogs/news talking about a potential H&S pattern (even before its visible!)

So probably we will see 1300, but not for the end of summer, but before and very quick.

Naveedah said...

I need time to understand the blog thoroughly so would work on it after trade.
Thank you for sharing hard,time consuming work with all of us.
1089-1090 worked as strong resistance.
I'm happy to have your insight,and also for bullishness.
Live a long and happy life with your loved ones!

Kishore said...

The pattern that we are currently seeing on 30 minute chart for ES has resulted in a break down, NOT break out, numerous times (4 or 5). I would not bet on a break OUT, at least not today.

S Mohiuddin said...

People have been imprinted with the ghastly memories of 2008. The result of this would be massive selling into any weakness, thinking this is the 'one'.
At the same time 2008 is unlikely to repeat again so soon, so these sharp sell-offs will be followed by steep rebounds when people realize it is NOT 2008 after all.
I expect such pattern to play out at least few times before people get tired of this game and stop falling for it.

Narayana said...

Why are you bullish if there has been no demand shock? So far this just looks like a correction in a downtrend... sharp and fast, on lower volume.

Adsense said...

anyone notice the advancing issues compared to decline issues today
and the ratio ???
weather this is short covering or not it is very strong

Abhishek Shah said...

It's hard to see the US breaking to new highs above the 1218 mark they made with the European and Chinese problems like a festering sore.
http://greenworldinvestor.com

Adsense said...

Hi carl
last follow up in the 30 min up bars down bars . today has been an interesting day to say the least .
at 0830 pst we put in a high in terms of the sideways range since may 24th . since that time we have been putting in more consecutive down bars versus up bars the rest of today even though prices have been rising.it would only take 1 more down bar to put us back and the bottom of the sideways range of the past several trading days
technically there is 2 bars left for today even though there is 20 minutes before the close , i count the close as its own bar . this would imply 1 of 2 things either we break out to the upside tomorrow in both price and the phycology of traders or we go to a new lower range . my bias is we are going to see a change in trend
from sideways to upwards.
ill see how tomorow unfolds
joe

Rajeev Bharol said...

Sharp rally is NOT a sign of bull market.... For bullish case, we should see slow and consistent rise.

oreo999 said...

Carl, finally created a google account for this posting. Just wanted to say thanks for making your excellent web site available.

I have been "lurking" since February and have been amazed at both the comparatively high accuracy of your calls and your willingness to go on the record real-time with trades.

I haven't yet bought your book, but you are making a strong argument for your method.

Much appreciated.
Fishin Ag

Atrader said...

It seems all if not most of the posters follow "Stupid News" syndrome. Carl does not as he uses "Fear" as a good sign to buy.

If you go back to 1973/74 or even 1965/66 high there were numerous scares.

In 1973/74 severe recession in the US and OIL shock, 1982/83 ( Mexico/S.A. debt), 87 ( black Monday crash) , 85 ( US index and oil crash), 89 ( US re crash), 1990 ( S&L crisis), 92 ( US recession), 97 ( Asia debt crisis), 98 ( LTCM fiasco), 2001/02( Stock crash), 05 ( some bs), 08 ( mortgage meltdown crash) and now 2010 with the Euro and Greece crisis. I'm sure there were others I forgot.

If all you did was buy the ES, YM, TF and NQ then ( 73 or 82) and load up eveyrtime it crashed and NEVER READ A NEWSPAPER or LISTENED TO THE TV and sold out in either 2000 or 2006/7 when ALL YOUr BUDDIES WERE GETTING into real estate and the market, you would be like Buffet although not that rich.

Now, Buffet sold out in 1966 and he will again. When he does get out, I presume the YM will be at 28-32,000, ES at 3,200-3,600 and NQ at 5,500 or 10,000.

Buy low sell high, sell high buy low, requires a lot of patience and discipline and NOT listening to any guru but YOURSELF and controlling your mind your trading/investing enemy.

The "Evil" bankers along with the IMF and World Bank use these crisis to control nations, the population and take the money from average serfs ( they sell scared) and give it to the charlatan masters....Wall Street and bankers including the FED.

How do you think Amschel Rothschild became rich. Wars, crisis, dictators, despots....more loans, more debt, more interest and control of the masses.

Wars are the best as they finance both sides...the so called enemy and the friend. The story continues to this day and ALL the serfs do no get it.

Naveedah said...

ES_F opened 1082 with all bullish signals.Estimates given 1075--1100.
What made anyone stop going long and wait till your destination to 1100.
my target was 1095,I sold but buying signals made me buy back 1095.50 and wait.
These guess estimates are so important
that I learnt to develop still at times differs from Carl.
Most meaningful blog,every blog is saved as best gifts I ever received.
Thanks from my heart.
GOOD LUCK,SIR.
Good Night!

Atrader said...

Naveedah,

You do not look like a "smart' trader knowing all the fib extension, moving averages, stochastics, adx line, macd, momentum, parabolic sars etc like a most of the other traders.

It seems to me you keep it simple, just looking at price and possilby a trend line of a daily chart and adhere to Carl Futia daily range and overall market analysis.

Best of all you make more money that ALL OF US. We should listen to YOU and how simple you keep it in making money.

Moral of the story:

Naveedah has found a true source in Carl and uses his market analysis to make money without his mind "flipping" all the time when it does not go his way on a trade as Carl could be wrong as any trader can. Overall he keeps the faith and makes money.

Good on you Naveedah.

schneidehouse said...

Carl, you are right way more than you are wrong -however- I do not know how you can look at the chart you just published and see a bullish signal coming from it.

D.