Tuesday, May 18, 2010

Here is a five point box, one box reversal point and figure chart showing 24 hour e-mini trading.

This morning I thought that the market would react from its open but I expected it to hold yesterday's close at 1134.75. That support level failed so I had to bag my long position. Even so this chart is the sort that portends bullish action ahead. In particular, I see a second higher low developing at the lower line of a rising trend channel. I think a low is developing because the market broke quickly from 1175, then started trading sideways at 1125. Yesterday we saw what appears to me to be a terminal shakeout (second green arrow). Then today the market took out its last reaction high on the way down to yesterday's low ( red dash line).

I expect the ES to end its drop from today's 1147.50 high near the 1120 level. The next significant swing should take the market to 1200.

19 comments:

tradingpoints.net said...

I thought you might be amused by this Richard Russell article "Sell Everything" http://stk.ly/98uk2P
bottom near?

Edwin said...

The market is back testing the down-trend and the resolve of the bulls. I think cash SPX 1,130 is critical for the bullish case.

Me XMan said...

I don't get it. You're saying SPX going to 1200 and you're not holding your long positions. You may as well saying you'll go long at SPX 950.

Elmo said...

feel like being played out by today market... busted by them twice...

pimaCanyon said...

Me XMan, we're talking probabilities here. When Carl makes a forecast, he will be the first to tell you that it is only a forecast, and sometimes that forecast does not play out as expected.

But in this case, if Carl is correct in both his 1200 forecast AND his forecast that the market will first visit 1120, why not wait until 1120 to get long? Why take a drawdown of another 10 ES points, when you can get out and get back in at a lower price? Moreover, by waiting he can be more confidant that 1120 will hold after he sees what the market does at that level. What if it doesn't hold and Carl had held on to his long position? Then he'd be looking at an even greater drawdown.

modazfuk said...

Lets hope for another sucker reversal today, back to 1140ish, then even Carl, I suspect will find it too tempting to sell into.

Chad said...

We should see the market rally tonight as the Venus Uranus Square occurs that should have some legs until next week.

spycharter said...

SPY is headed to 111.26 to fill the gap from 5/10

fiz said...

I don't think square things in uranus have anything to do with the market chad

Me XMan said...

Here comes 1120.

JM said...

Carl

your NYX recomendation 6 months ago was brillant , now the stock is heading down, what´s for you the level so step in again.
Same question for Citigroup - isn´t it for medium term investors time to buy
Thanks for the answers

tapped out said...

Chad, Does that have anything to do with increased gravitational pull? Hi Carl! been awhile.

Adsense said...

a bit scary market today .
gap on cash spx at 1110.88
61.8 retracement at 1106.86
2 equal legs down from recent high
at 1090.69 . short term advance decline line making higher low then yesterday . nasdaq 100 potential new low at 1869 yet that would most likely correlate with spx cash near 1090. it is these type of moments that i feel hestitant to trade yet in most cases we put in at the least a short term bottom .there is a short term high to low to low count
on spx cash daily from the top april 26 to the may 6 low , adding 8 days is today . this tell me the market is at an inflection point and will have to turn up tomorrow
weather it be from a slight lower low or simply from right here right now . toorrow is now an important day as far as im concerned
joe

Win said...

Carl,
You may enjoy this. This is the most read headline on the BBC website today:

http://news.bbc.co.uk/2/hi/business/10124179.stm

Chad said...

Actually Venus and Uranus usually make large trading boxes and usually work in tandem with fib retracement. As an example I posted here on April 23 that the top was in and that landed on a venus uranus sextile.
I have been trading for over 25 years(in between running oil and mining companies and now a hedge fund) and the reason I have been able to trade for over 25 years off and on is that this stuff for the most part works.

Gravitational pull(pst) more like electro magnetic ;) I like Carls box idea on the micro and he is not
always right nor am I as we are all just looking for an trading edge.

catherine said...

I think Richard Russell is right.
How can it be a bottom when the market has being going straight up for 14 months and almost all commentators are bullish about economic recovery etc.?
No one comments on how China has been tightening for the last few months and commodities are being dumped. Watch the HK index. It tells you where the spx will go in a few weeks time - always peaks first.

Harry said...

Russel tonight "-- Surprise, despite being oversold the Dow was down over 100 today while Trannies were down 58. The internal market was ghastly today with the Dow starting to follow the soldiers. Looks like the Dow is getting in harmony with the still-collapsing "internal market." Down volume on the NYSE a huge 94.% of up + down volume. Overall volume increased on the down-market, making this another distribution day. My PTI was down 7 to 6105. MA was 6077, meaning that my PTI remains bullish by only 28 points, lowest differential in months. In all, the stock market looks lousy, and we're moving ever-closer to those critical May lows. Break those two, and it's a new ball game. And it won't be a game Bernanke or Obama will enjoy -- nor will anyone who is loaded with stocks."

E said...

Bear/corrective markets typically bounce hard then drop hard again.

We have closed the 1107 gap overnight, and the rejection from 75 has been a good oppty short for those who could be flexible in their thinking.

"Be neither a bull nor a bear but a seeker of the truth"- A. Elder

Steve said...

ES 1107.75 at the moment. Enuf said.