Yesterday
Yet another day that had me quite surprised. Considering where we are market wise seeing a sideways day (though with decent volume) is quite odd. Now on the other hand, as you can see when we dropped to 790 on tuesday after the gap we were heavily oversold, we are now at 790 still but were able to distribute properly. We know sideways day generally mean continuation of the previous trend which in this case is down.
Today
Well as mentioned on Tuesday before the open I forsee a change of trend today. My most likly point is still in the 2:45-3:15 range. We also have the potential to have a change much earlier in the day around 11:45. This time around its much harder to identify the time window so watch the comments for updates.
Now you ask which way will we turn? - believe it or not its hard to say, as you remember from previous change of trend calls price does not always matter, here its one of those were its regardless of price or direction. There is a chance we will see a rally in the morning hours, if that is the case my top would be around the 800 or 809 range, if we are to decline further my bottom this afternoon would be around our previous low points. So its hard to make this call now but it will materialize.
How to trade?
Well it has been a bit frustrating I am sure. I promised new ranges, new trade opportunities and we had our break, yet no trade chances. Narrow trade ranges and really untradable patterns. Look at yesterday afternoon (comments from previous day), I had called the change right before it happened, then all we get is 3 bars and more sideways, we normally trade after confirmations if we are unsure of direction, this was one of those that left us without any trade yet again.
So for today, we will have a great trade chance unfortunately we do not know the exact time yet or direction but we will see a change of trend today. Get ready, watch comments and go into today knowing that this trend will give you a few days of gains.
looking for a bounce downward off of 800-803 range to probe yesterdays lows (futures markets) and likely below - and get one giant reversal back towards 800 later today and continuing tomorrow ... this seems consistent with a path of maximum frustration for most who are buying options at/near the spx 800 level
ReplyDeletestill up in the air. We continue having a narrow range without any real breakouts. We have one hour left for my first time target at 11:45 so lets see if we can top/bottom there or if we continue on a slight downward/upward trend till the late afternoon for a change there.
ReplyDeleteThanks for the analysis. Note: We've bounced almost perfectly off the lower Bollinger Band (20, 2.5) the last 2 days. I use 2.5 st dev instead of 2; it has historically held better. The BB is currently around 774-775.
ReplyDeleteyeah great call and as you can see the 774 is perfectly inline with our support numbers. Considering where we are now it is very likly that both times are correct 11:45 and the 2:45-3:15 range. Break down at noon and drop into major support in the afternoon for a reversal. Going to have to wait and see. It just goes to show how markets follow specific rules and trends we can forecast - its just a matter of finding the proper trades within those boundaries that are quite difficult to engage in at the moment.
ReplyDeleteWe've been holding right above 780, do you think we'll break through? or do you still believe we will have a turnaround in the next few minutes (at 3:15)?
ReplyDeleteThanks
it is looking very much like a big sell off from here into the close, but just as you I am puzzled at the moves today yet again. If we are to break I feel we will drop 12+ points into the close.
ReplyDeleteI'm thinking the market is waiting for government intervention again?
ReplyDeleteThe midday rally was rather weak today. I feel comfortable shorting, but think the administration may say something tonight.
I donno, call it a hunch.
the market can only remain in this holding pattern for so long. And yes I totally agree that the current sentiment is hanging on to hope for the administration to clean up their act and present conforting plans. But I think the help will come a little too late. We have not rallied off those key support ranges here and any rally was sold off with weaker and weaker attempts on the upside, we did not even reach the 800 today and stopped short at 797 - negative sign.
ReplyDeleteI'm really new to this stuff. Do you have any suggestions for books I could read to learn as much as you know? haha
ReplyDeletewell the DOW just made a new 52-week low ....
ReplyDeleteTake a look at Technical Analysis of the Financial Markets by John J Murphy, thats a great starter. And just keep on reading, most of my knowledge was aquired by experience, when you have money riding on a trade you observe the moves in the market very different, not saying go out and trade, but most of my knowledge has come from trading myself. But it helps immensly getting a great start of technicals and pattners to be able to use those patterns during your trading. Just be careful, in the beginning you want to see a pattern in everything =)
ReplyDelete