Monday, August 23, 2010


Here is a 30 minute bar chart showing day session e-mini trading. Early this morning I thought that Friday's action meant that Friday's low would hold. But the market took a peek above Thursday's high at 1078 and there sellers took over. At today's low thus far (1067.25) I thought the prospects for a drop to 1055 later today and early tomorrow were good. So I sold a 4 point rally on the hypothesis that the market would soon continue its morning break.

Instead the ES rallied for a greater period of time that it took on the way down from this morning's high. Friday's midpoint at 1067 (dash green line) had held in the meantime. And the market over the past three days had built a trading range (lower purple oval) that is bigger than the 1085-1098 range (upper purple oval) from which it dropped about 37 points.

These observations warn of building bullish potential and I didn't want to stick around to find out if this was the case so I covered. Right now I don't see any convincing opportunities, but if the market closes above today's midpoint at 1073.75 I will conclude that the bulls are back in control and that tomorrow will be a bullish day. Failing that kind of close I will retain a mildly bearish (down to 1055) stance.


Nav said...

Convincing..but We have changed our mkt thoughts!
US equities opened strong but quickly gave up the gains (the early strength was sold into by vanillas). Volumes are very quiet and there isn’t a ton of conviction in either direction (i.e. shorts aren’t aggressively pressing and buyers aren’t chasing); things are in a narrow range w/tight stops on both side (buyers and sellers)
Watching the 1069-1070s as SUPPORT but IF, then 1057, and then the low 1040s.

TenYear said...

Ugly close, but its still in the circle. I'd be surprised if the Economic numbers help the bulls cause this week. Look to get long Friday after GDP or first thing next week or near 104.

I think September will actually be a green month for stocks once all of the May sellers decide to reenter.

Nav said...

The decline late in trading seemed to coincide w/a report on Fox Business discussing how Goldman isn’t planning on spinning out its prop unit).
The big focus will be on Bernanke this Fri (he speaks at 10amET at Jackson Hole.
Next for me is 1057 key level,IF then
Couldn't resist buying @1069 but I'm HAPPY...

Ivan said...

Dear Carl,
I think, no chances more for bullish scenario... You will see that in next 1-2 weeks...
I was in bull´s camp till yesterday...

Adsense said...

Hi carl
i still think the early august period which is now behind us produced a top and not a low .
i made my case months ago on here.\
i also think we just completed point 7 in the larger 3 peaks domed house which began in march 2009 . point 3 would have been the jan 19 2010 high and point 7 the aug 9th 2010 high the duration was 6 months 21 days which fits lindsays paramters . the rally from the march 2009 lows to the april 2010 highs was 414 days which is a very rare subnormal advance . counting from the nov 2008 lows to the aug 9 high was a total of 626 calandar days
this also falls into the range of
a subnormal advance between 414 to 684 days lindsay also stated when your coming into a longer term turn following a major low 15 yrs 2 month to 16 yrs 3 month you should look for a short to even a subnormal advance . the last major low was more of a breakout then a major bear market yet it was in 1994 . looking at that last low in the week of nov 21 1994, the daily low nov 23 1994 to the aug 9th high you get 15 yrs 8 months 17 days its in the range of the guide .to add one more lindsay time span into the is the 12 yrs 3 months to 12 yrs 8 month time span
and using the july 17 1998 high
plus 12 yrs 3 months targets oct 17 2010 as a low . 12 yrs 8 months targets march 17 2011.
lastly if we were to look at basic declines and count from both the april 26 2010 high as well as the aug 9th 2010 high using both a long decline as well as a subnormal decline we come up with a date range of ;
april 26 2010 plus 406 days targets june 6 2011
aug 9 2010 ( assumes sideways movement ) plus 253 days targets
april 19 2010 .these dates may correspond with points 12 and 14
and not point 10 we will see soon enough . either way we should be looking for a decline and this makes for a better point 7 being in early august from a cyclical stand point . my next cycle low period falls may 3 2011 ,which fits the ranges noted by lindsay .
also 2010 in a benner business cycle high with 2011 a cycle low .
we still have the jan march 2000 high to contend with in 2012 ?
good luck

Nav said...

Stayed awake all night to correct my analysis and trade.
Day resists 1072, 1075.
Key supports this week are 1059-1056
It’s a "negative" that the number of stocks making new 52 week lows on all US exchanges is expanding.

BOE’s Weale makes cautious comments in London Times interview; says UK risks falling back into recession – Reuters/CNBC

Spain debt sale - auctioned 2.7 billion euros of 3-month bills today at an average yield of 0.624 percent, compared with 0.672 percent at a July 27 sale, as demand was 2.2 times the
amount sold, down from 5.68 last month. The treasury also sold 1.3 billion euros of 6-month bills at 1.037 percent, compared with 1.144 percent last month. The bid-to-cover ratio was 3.9, up from 2.2 in July. Bloomberg