Tuesday, July 7, 2009

Trendline Update

We have been successful trading based on the EW and fib patterns thus far. At this point I drew some trendlines to guide us through the channel here. As always I have the center line, the outside edges and the mid lines to figure help us further. I try to draw the trendlines with similar FIB relationships (50, 61.8,38.20) - at this point I am not quite sure which one provides the most strength but I could see us trading lower a bit and then rally to get back to the center 50% line which will end up perfectly in the rectangle I am currently looking for to add more shorts.

Use this as a guide and let the market tell us where we will head. Yesterday was a bit of an odd day, I had referred the a 899 close screwing everyone up - so they did, it was neither bullish, nor bearish. I for one look at this as a bearish day of course because we did not rally strong off with RSI being heavily oversold.


  1. quick update on the 60 min chart.

    RSI 41 max
    MACD zero (that's good)
    rectangle area (fell short a few points)

    So no clear signals for me yet to enter any more shorts with the exception of the MACD cross. The bulls now have a good chance to take this higher here as they have strong support from the MACD and low RSI levels.

    Still waiting patiently to add more shorts. I have not yet closed out any of my short positions from last week - total of 3 stops have been hit (2 more that I had re-entered at better prices).

  2. entered a small hedge here via SSO @ 22.56, stop at LOD

  3. I sold my puts spx 887. waiting for the Chris' blue zone to short again. this time for august puts. July puts are too scary for me.

    we may not see 900 today though

  4. yeah safe more. I have to admit there are too many scenarios and I do not think we will see the blue zone in the short term (this week) before making some more attempts at 875. If we reach 875 first (meaning we break the weekly low) the blue zone is very unlikely for this move.

  5. we may see the blue zone tomorrow am, it seems. In small long position with tight stop.

  6. I went a small lomg here again after being stopped out last time. will hold it until tomorrow then buy short

    what is your take here Chris?

  7. I think we will see 879SPX first before making any reversal here. There really is no buying, the only attempt at a rally was stopped right at the VWAP. Did not have the guts to short that one ... actually pressed cancel on my futures short order.

    Also did you see UNG :( That is one ugly looking chart after the trade halt.

  8. just randomly flipping through charts - many support ranges are being broken now. Not just on sectors but also on specific strong equities that normally would rally at key inflection points.

    We could easily see this go down another 10 pts here. Do not think it will happen but unless you are positioned I would wait this one out - long or short. Even if you want to try a long off the 875-885 range you have to assume a large stop amount.

    I may hedge into the close here ... but will wait out the last hour first.

  9. I again got stopped out. will wait for a bounce tomorrow to get in shorts. may attempt at 875, if we reach there.

    I think now the frustration on the bull side. they may not get a chnace to get out.

  10. I just got back to my terminal and I don't know why UNG was halted then it got slaughtered again. This is getting pretty depressing now :(

  11. Ryan; I feel your pain; I held FAS from $12 down to $2, and didn't sleep well for 4 months; then it recovered to $11 and change and I sold; and learned...and that was just 6 months ago. Steve

  12. Hi Steve, I'm in HNU.TO which is the leveraged version of UNG so I'm feeling lots of pain at the moment. I hope the decay doesn't kill me and I get a chance to get out like you did.