Wednesday, August 25, 2010

Hmmm....


Here is a daily chart of the e-mini futures. I thought you classical bar chartists out there would be interested in this.

Amidst spasms of pessimism the market has reached an oversold condition at the point labeled "RS" on this chart. This could well be the right shoulder of a classic inverse head and shoulders formation. I haven't noticed anyone commenting on this on the web, so I think it stands a good chance of developing an upside breakout of the neckline (horizontal green dash line). If it does the upside potential would be measured by the size of the rally from the head to the neckline, about 125 points, added to the neckline level itself. This works out to be the 1250 level.

17 comments:

mario.padovani said...

What about having confirmed Hindenburg Omen observations (3 in in 2 weeks)?
Statistical study of further drop or possible crash

Edwin said...

We also have an Inverted H&S in play in the 15 minute chart with similar potential result as depicted by you.

siricor said...

Where should I send you the cheque? I had a great day today... all thanks to you!

King Carl rules again!

Carl Futia said...

There is a PayPal donate button on the right hand side of the blog!

Narayana said...

What about the Hindenburg omen? It's contrary to your analysis!

Marc said...

We also had strong reversal day in Bonds; TBT, TYX, TLT etc.If today's action holds, rates are headed higher.
Stocks put in a good reversal day also and if the market can move higher in the next couple of days we could get a weekly reversal as well...very bullish.
Gotta wonder if the full moon had anything to do with the action today?

Carl Futia said...

Show me the burning dirigible and I'll stop laughing.

yrichter said...

Can someone fill me in this Hindenburg comment I keep seeing? I feel like a bystander on some inside joke...

yrichter said...

Forget it. Google is your friend.

pimaCanyon said...

H&S and Inverted H&S patterns fail more often than they succeed, as is the case with many (most?) TA patterns. Not saying this one will fail, but I am saying that I give these kinds of TA patterns about as much weight as Carl gives the Hindenburg Omen. :-)

Naveedah said...

Great blog!
Went long 1037,38 but had plan close to 1060 but sold early(1048.25).
Out of trading for 10days,going to Spain..away from trading and English!
Obliged and leaving w/lots of wishes for you/your loved ones.o/n 1050 or below a possibility!
GN!

Mark said...

I wouldn't get all that excited about anything today. Have you not noticed that the bulls use up most of their gas tank to simple close where they started?

I am open for some rally over thenext few days, but when the boys get home from the Hamptons after Labor Day..I think you boxes may get expanded to the downside.

The lows from July are not the lows and I will be interested in seeing how they handle 960ish. Personally, I think it breaks and we are heading for 88o spx (Cramer said so) lol

Watch the 1077-1086 if the bulls can get up there..sellers are waiting and I see it as a shorting gift. The ones waiting for 1300 and 500 on the spx have not made a penny in over 4 months. Trade both ways and forget about being the one who said we were heading all the way up/down there. It is much easier. Heck we did 17 es points todayboth long and short.

Naveedah said...

Bottom Line on the rally – relatively impressive test-and-bounce on back of bad news after holding an important technical level (1040). However, the rebound was pretty tepid and as negative as sentiment has become, it seems like most were/are anticipating a snap- back rally. Also – not all the “right” groups participated in today’s strength (while the semis and retailers outperformed, metals and the banks lagged).

raven said...

The line in the sand is 1040 and as everyone has noticed it has been well protected. But.....and this is the question can the bulls/aka the Federal Reserve, GS make this go up ?

I truly HAVE NO CLUE

shyam said...

This is one of the possible OUTCOME as of today. The other possible OUTCOME with equal probability is going to 940/890 from here. Only future can resolve this. So decide in future as the OUTCOME is evolving. Because the OUTCOME itself is function current Fundamemtal/Technical/Psychological
CONTEXT of the CURRENT MARKET_CYCLE, which noboday knows, as of today.
Only MARKET knows that.So let the MARKET guide you through the decision making process, like Carl adjusts his throughts on daily basis. So be ready for BOTH the OUTCOMES as of today. Don't assume anything.

Rajeev Bharol said...

What happens when both bears and bulls expect a rally?

TG4TA.stockman said...

CHOP CHOP CHOP.

There's as likely a H&S pattern to the downside with 1020 as the neckline (target of 825).

Until this market gets above 1100 and 1131, any speculation that this can get to 1300 is, well, wishful thinking.

Likewise, until this market can crash below 1040 and then 1000, any speculation that this can get to 825-900 is, well, wishful thinking.