Wednesday, September 16, 2009


Here is an hourly chart of day session e-mini trading. Today the market showed more strength than I expected when it moved a couple of points above the high of my range estimate of 1057. This also put it visibly above the upper parallel line for the bullish trend channel. The market is trading above midpoint resistance at 1054 (lower dash red line)but the midpoint between the September 2008 top at 1291 and the October 2008 low at 837 stands at 1064 (higher dash red line). Moreover, the electronic high in the e-minis for the rally which followed the 837 low was 1067. The market is digging into strong resistance and I still think the e-minis are likely to stall near current levels and then break to midpoint support near 1011 (purple dotted line).


Unknown said...

Why are supports, resistances, inflection points and other market milestones structured around numbers like the exact halfway point (or other simple, harmonic, elegant relationships) between extreme values reached by the market in the past? Are these values consciously or unconsciously in the minds of market players and motivate their behavior? something like fetish figures? Or are these values and their structures due to geometric, arithmetic or aesthetic deeper relationships?

Paul Dirac thought that any sound physical theory should be mathematically beautiful. Are sound market strategies and analysis also necessarily beautiful? Feel you the market textually, like a set of mathematical symbols or equations or rather, visually, geometrically, as a set of shapes or forms?

(I apologize for my horrid english and for the long post)

Unknown said...

^if you respond to the above comment, please throw in your thoughts on the golden ratio

Win said...


I'll start by saying I've been unprofitable and decidedly "wrong" during this bull move and you have been "right."

Now that I have that off my chest, I do wonder about this being a blow off top. Had the market stuck to it's channel, I would have felt differently.

Anonymous said...

The stubbornness of the market is not rooted in reality. Rather, it is derived from the emotional nature of man. The market is no more irrational than most of us. Moreover, the HFT computers only magnify the irrationality.

As it is in our nature, it is "OK" to be wrong, so long we don't lose much. That's why, it "pays" to trade small. Carl's posting on the right hand side points that out: "Account and Position Size".

Being right takes a lot of discipline. We need to overcome our emotional irrationality. For some people like me, it can take a lifetime!

janet said...

It's called a break-out to the upside. A bloww off top would be with massive volume. JMHO

Teich said...

Hi Carl.

I think this is a case where, as you mentioned before, the dog that didn't bark.

I guess we will find out soon if the ES 1064 to 1067 area holds or not.

Piazzi said...

Carl, That strength is typical of a wave 3

Enky Nakamura said...

1067 will not hold, we are going to 1150 with this weekly leg.
Last leg moved the market from 666 to 957 (291 pts), projecting 291 pts from july low we have 865+291 = 1156 pts as next target.