Monday, March 23, 2009

Revised Range Estimate

Here is a five minute bar chart of the e-minis for the last two day sessions. My original range estimate this morning was 770-795 (dashed rectangle). Two significant things have happened since then that affect this estimate.

First, from its electronic high at 791.75 this morning the market reacted to 781.25 (second purple rectangle. This reaction was the same size as Friday's late reaction (first purple rectangle) and the market proceed to move to new rally highs. This establishes a rhythm to the move up from Friday's low and makes me think that the market can make it to new highs for the rally. There is resistance near 805 and I think that will be the ceiling for today.

The second development was the breakout above the high of a relatively indecisive first 30 minutes of trading. This represented a small trading range and the upside breakout was evidence that selling was still too weak to send the market downward from the open.

In any case I now think that we have seen the day's low and that the day's high will be near 805. If I am right about this I think any reaction will be limited to 8-10 points (third purple dotted rectangle) and will hold midpoint support defined by the first 30 minutes of trading today.


Anonymous said...

Good thinking, Carl!


But there is a good possibility of the gap up to close, this afternoon or tomorrow. That will bring ES down to 764 or lower.

Anonymous said...

Hi Carl & Friends,

Carl, a rise of around 5 to 7% in Dow/S&P 500 is expected today.


Anonymous said...

while i maintain a bullish sentiment, what is your potential downside target? Or better yet are you still holding on to 765?

Anonymous said...

It just feels like we will see 8000 on the dow later today..They want to take this..maybe like china, someone is using govt funds to buy stocks!..The TEPP (Trouble Equity Pumping Program)

Anonymous said...

If the banks can leverage as much as they want and avoid margin calls..Why dont they let us also do that--after all the SPY will go up eventually. Everybody should be allowed to buy as much as they want and sit back and enjoy