Friday, May 21, 2010


Here is a thirty minute bar chart showing day session e-mini trading. I estimated a 40 point range for the day with a low at 1035. So far we have seen a 37 point range but the low was 1051. This surprised me because I thought once the market broke its 1056 low of May 6 it would drop much more than 5 points below it.

So far the rally from 1051 has been only a little bigger than the biggest rally on the way down from 1174 (blue rectangles). Unless and until the market shows strength above 1100 I am going to stick with my guess that we shall see 1035 before a sustained rally to new bull market highs starts. Note that the initial leg down from 1074 carried about 60 points. A 60 point drop from the high (thus far) of today's rally would put the ES at 1028.


janet said...

Thanks for the update..will wait for that 1100 breakout on strength to buy. Rest up over the weekend!

Edwin said...

The trend is down. For the conservation investors, it would be safer to get back in only when SPX gets above the 200 DMA again.

Ali said...

Im gonna be a contrarian to Carl, I think the correction is over for this time.

E said...

This has got to be one of the more challenging trading days that we have seen in a long time.

Mentally exhausted and I imagine we are all happy to get a few days off.

The low volume mid day was a heads up for the profit taking pull back, but the 3:30 jam into the close was classic.

Thanks for your market views.

Market Karma said...

Very good low made today and higher prices coming. Have updated the blog

with the relevant rationale.
Nice weekend

Naveedah said...

Big"NO" to Ali
Unwind day as risk rallies&safety shunned;shorts take profits into the weekend following sharp sell-off Mon-Thurs;not a ton of real buying.
The European finance ministers have been meeting..,Trichet was on the tape"euro was not in danger"..,Bloomberg ran an article earlier how the ECB was still in the secondary market buying sov debt...this is another positive for the day.
The concern about growth+Europe havn't been resolved and are still present.It's more a case of sellers being on strike combined w/some covering than it is people tripping over themselves to add a long exposure.I believe in Carl&suggest you to listento him in difficult times.
Thanks Carl to be here for us!

Adsense said...

Hi carl
i see the potential for a point 10 when looking at the $gdow and it fits your oct to april time frame for points 3 5 and 7 , there is also a top to top to bottom count which runs into tomorrow if that is going to work. yet the $gdow should really hold the lows it alread made a day or so ago. that said there is another very small 3 peaks from fridays low if it is going to work the 1060 area would have to hold into the open this morning , might be all about home sales data in which case this is all just posturing and any good news would slam the shorts right from the open . hence 1060 would hold and a snap back right up to 1080 1090 with a possible break out towards 1020-1023 . all in a matter of a day or 2 . tough to call but i just have not excepted
this down trend as the real deal despite the obvious .