Thursday, March 12, 2009

Update at 1 pm

Here is a five minute bar chart of the last two day sessions in the June e-minis. I have revised my range estimate to the blue rectangle you see - its high is at 743 and I expect that level to be reached late today. I think the market is setting itself up for a drop of 40-50 points. From its low of 663 (basis June) on March 9 it has rallied 73 points so far, a little more than the biggest rally on the way down from the January 6 top which was 71 points (horizontal red arrow). Moreover, the 739 level is the level of the November 21 low (red dashed line) in the December '08 futures. You can be sure traders are aware of both these facts and I think we should expect to see sellers take control of the market tomorrow or Monday.

In the mean time I think I see a second volume climax (three vertical red arrows). I think the market is now likely to react 12-14 points (purple rectangles) - about as far as it did late yesterday. I want to be a buyer near the end of this reaction anticipating a move to 743. If the reaction does not develop I expect to be a seller above 740 later today or, more likely, tomorrow.


Anonymous said...

Does this mean that we will not rally the 200 points you have been talking about?


Sqroot said...

Wonder if your followers went short at 743...

Anonymous said...

Hi Carl
ill bring up the cont from the mid section again using the dow 13 minute chart . yesterday i made a note that point aa had ended
in turned out to be the reaction low and yet i also had point e
in a different spot since im not
an expert on this . anyway that second e called for aa on the close yesterday . the first jj
is the close today or the first
30 minutes friday . the second
jj is late friday . look at this from an elliott wave stand point after looking at it more in depth
yesterdays late day decline was a wave 4 and the late day bounce and decline into todays open was waves 1 and 2 of 5 . todays rally was wave 3 of 5 and since this is all
a short term 13 minute chart wave
1 though 5 could be completed today yet if this mid section count im looking at is going to continue to work then we end up closing near the highs of the day today in the top of minor wave 3
and waves 4 5 would be completed
into late friday . this implies
the decline your looking for would begin some time early monday next week .my short term cycles work
have a cycle high now yet the 2 yr cycle which called for a bottom
on march 8th has a short term cycle high due monday march 16th
the next cycle low would be march 23rd 27th . and from there the market should head much higher .
all of this tends to blend together with what you thinking
and it all blends with my cycles work and the present wave count im looking at . it appears to me the dow should hit the 7162- 7204 level before we see the reaction to the downside . i seriously doubt we see the dow get above 7312
in this move yet somewhere in that range 7162-7312 should be the high
it is to soon to call the high even though you see it coming
good luck

Anonymous said...

The SPY's reacted at about 2:10 on my chart - a few million shares traded at 73.5 for a minute while the market was at 74.5. The movement cooresponds to your box on this image.

Anonymous said...

Carl, too many folks on the 740's = resistance bandwagon. Clean trend up day and a close above 20DMA will bring more cash in tomorrow. 750+ could get this thing getting nosebleed overbought. I see 770+ before 50 point reaction next week. But, this week will close with a nice engulfing bar on the weekly.