Monday, June 21, 2010


Here is a 60 minute bar chart showing 24 hour trading in the September e-minis since the May 25 low at 1032.75.

Last week the market broke above the high (horizontal dash green line) of the 70 point trading area/box that it established following the May 25 low. That was a very bullish development and makes it very likely that a move to 1300 and above is underway. The breakout level should now function as strong support.

On the chart I have drawn four blue rectangles which record the market's upward progression through a series of boxes that are about 18 points in height. The bottom of the current box is near 1112. I expect the drop from today's high at 1129.50 to end near there (lower green oval). The next swing upwards should carry to the 1138-40 level which is the midpoint of a 70 point box whose low is 1103. It is also at the upper boundary of the trend channel I have drawn.

Once that target has been reached a bigger reaction is likely to develop. It will probably carry the market down 30-40 points or so.


Naveedah said...


Thank you so much!
You are so great!We all Need you so much in all difficult trading times,you give clue and that ends with so much learning and good money in pocket!
You give us too much,Sir!
Live Long!

Naveedah said...

Short term resistance is 1121/1123/1125, then 1130, followed by a resistance cluster at 1149-1152. Short term support is at 1115/1110/1106

Thank you,Sir from my heart for big big help and support you've been giving; I know the value of your work and time.
Live long and happy for us!

Kishore said...

Bulls are good at

1127 was 50% retracement of the move down from 1216 to 1040.

There never was a selling capitulations and there never was an impulsive up move, i.e. "demand shock" during RTH.

The down trend is likely to continue.

sandy allred said...

The overnight markup in futures is very suspect. The dollar should head back up to the recent high as equities retrench through the end of next week....I guess.

andi said...

DIA/QQQQ had a kiss of death at 50 SMA..longs careful as rug can pulled out from under your feet..
One word: Bearish sends shivers down the longs' spine...

Adsense said...

Hi carl
i aggree with your thinking however i want to bring up a few things. first of all my sort term cycles are calling for a high on friday yet i have a few mixed cycles so im not sure how this will play out . ( others turning up june 22 ) the pattern though on the 60 minute chart is a fairly clean 3 peaks domed house with point 21 being todays high and point 22 being todays low ( most likely ) this would make the case for a top sometime wednesday most likely in the 4th hour of the trading day . dow 10630 might be all we get before the reaction down . the larger reaction your calling for will have the potential to go all the way back to 9800 which was point 10 if the 60 minute 3 peaks domed house pattern is valid .to go a bit further ill add a few things from an elliott wave perspective . it is possible ( and i have doubts ) that the decline from the april highs was a leading diagonal 5 wave decline . what i have noticed consistantly over many years is once you identify a 5 wave move you look for a .382 time retracement of that 5 wave movement in terms of time . on a daily chart it would be wednesday
june 23rd ( my own cycles say june 25 ) and the 3 peaks domed house pattern is fairly clean on the 60 minute dow chart . all i can conclude at this junture is the market as you note yourself should see a larger reaction. looking at the $gdow i could call this peak that im looking for as point 13 which would imply the decline as point 14 yet i think it is still to soon to make an overly bullish case on thhis market considering that there are many cycles which are calling for lower prices into next year if not right into the election in 2012 .im open minded and not affraid to adopt to what the market data shows as time goes on yet i would not down play the bearish potential just yet
good luck

rational_trader said...

I see a "head and shoulders" pattern:
Head at 120-122, two shoulders at 113-115,
A short term correction started today, how far it will go ? First stop, 108.

Jack said...


Yup, you're either gonna be right on target or this thing is heading in the other direction off a H&S pattern that could develop.

SPX caught between the 50% retracement resis. and the 38% support levels.

This week critical. Not sure it will resolve until after the Fed's FOMC announcement on Wednesday.

tempo said...

60 more days until BP well is either capped or the largest economic disaster in US History unfolds. IMO, equities will not make any significant move until the leak stops. BTW, a large storm (possible hurricane) will move into GOM this weekend probably shutting down BP containment. This year GOM will see a record number of hurricanes per