Tuesday, January 30, 2007
S&P's, Spiders, and QQQQ's
Here are hourly charts of the March S&P futures, the Spiders, and the QQQQ's. I last commented on these markets here.
I think the technical condition of these three markets is becoming more and more bullish. The last three hourly bars that I have highlighted are telling an important story.
The first two of these bars, highlighted in red, are wide range down bars and indicate selling by longer time frame traders. As always, sellers are accomodated by buyers so one must guess the motivations and time frames of the buyers to make deductions about the direction of the market's trend. In this case both bars travelled pretty much the same range and this hints that the same sellers were at work both times. But in neither case was there any follow through selling. This tells me that the buyers were also longer time frame traders.This already hints at bullish potential.
The last highlighted bar on the chart is a wide range up bar occurring near the highs of the last two big down bars. This indicates longer time frame buying. It is doubly significant because it shows longer time frame traders raising their bids and doing so right in the area where longer time frame sellers were active the previous two days.
This is very aggressive bullish activity and I think it means that the markets are about to move above the resistance levels indicated on these charts and climb to new highs for this bull market.