Wednesday, June 30, 2010

Tuesday, June 29, 2010

Trying again

Long ES @ 1033.50, stop 1032.75 (lol yeah)

Long ES @ 1041

Tight stop on this one. Could be a nice 8 pt bounce developing here.

12:05PM: we did get our 8 pt bounce but are now back to the lows, not sure to be honest what will happen the remainder of the day, IF we are to make a new low it should be marginal and we should not exceed 1035SPX today. After everything has calmed down a bit more we should see a relief by thursday and if we are lucky maybe even get back to 1065-1075 but that depends on the close today.

Have to leave now so will not be able to post more updates until late afternoon. Good luck all and be careful.

Update: Price target

This should be the first low here, need to determine if more is coming but price targets have been satisfied for now. Still have time target of 11:35-11:45 so we could have one more push coming.

Remember the GAPs

As you remember GAP based trend days are very easy to idenfity on a strong GAP down/up. In this case, high of the day should be made within the first 5-10 minutes off the open by about 3-5 pts above open price. After reaching this price point it "should" drop to make new lows.

There is a potential for the GAP fill to extend in the first 30 minutes but that will decrease chances for a trend/stepping day. So watch the first 15 minutes very carefully, today has a potential to drop another 15 points (making it a total of -30 SPX pts) towards 11:35-11:45 (should be a low).

Bulls lost it

Well, as described yesterday we saw our consolidation but the market waited until the overnight session to complete the scenario I had described yesterday. Many others are calling for a rally of the 1050 and below range without making a new low and that is still possible but daily and weekly chart are showing us the way for a new low.

MACD needs to turn negative first before we can re-attempt any upside and at the moment that means a minimum of 30-40 pts off the 1080 range. Tripple bottoms are very rare and we would need to see a V shape rally off the 1040-1050 range with at least two strong 60-min up bars. However, in absence of such a price pattern we shall continue to consolidate now between 1080 and 1040/1050 until next week to setup for a break of the lows.

Target had been identified for a while now in the 1008SPX range, plus minus a few points of course but I am sticking my neck out for 1008 =) Reaching this price level by July 8th-13th would setup nice for a bullish divergence on MACD as previously mentioned.

I will keep updates coming throughout the morning session.

Monday, June 28, 2010

Holding on

This is the same chart from last week just with updated price levels. As you can see bulls are trying their best to protect the channel, we are RIGHT SMACK at the bottom of this so important triangle here. If you close up on the last 3 days you can see how important the current price levels have become and how the market MUST make a decision - are we going to give up this price vector or do we have protection from the previous uptrend still. As you can see the parallel lines are supporting the market in the same advance price structure as the past year BUT it needs to happen here and now.

Take a look at MACD divergence here - what are the chances of going positive again after having come down to zero from a positive range. Very low. And you all know how MACD is my most important indicator for longer term charts. MACD will almost never stay at zero, combine that with the monthly spinner we are about to form you all know what that means. A STRONG price range going into next month.

61.8% FIB

Potential long entry here, backtest of the broken downtrend channel from Friday which also coincides with 61.8% retracement. Need a strong move higher from here.

10:48AM: slight advantage for bulls at the moment with positive tick and recapture of VWAP intraday. However, price structure still looking very weak and bulls need to take out 1079ES if they want to build an advantage. Till now, we are just consolidating and considering the previous strength in price off our move @ 1130 SPX bulls need a miracle.


Watch this very carefully in the next 2-3 hours. A break of the lows here @ 89.2 will put a LOT of pressure on SPX and could support a strong move lower today.

Extremely important day today !!!!

Strong Push lower?

Overnight activity was quite telling last night - the fact that we stopped at Fridays high and are now moving lower again should give us more visibility for today.

Scenario 1) rally out of the gate breaking 1079 ES by 10:45-10:55AM. This is for a short term bullish scenario towards the 1088 ES range with a potential to move a bit higher. This could be a nice setup to close the monthly chart for July for a BIG move into august.

Scenario 2) Sideways consolidation until early afternoon between 1070ES and 1079ES. This is the setup for a break of Fridays low today with strength and ready for a move lower towards our previous lows. If this occurs today we should see some consolidation after the sell off for 4-5 trade days with a 30pt range and a fast move towards 1008 either late this week or early next week. This would be the setup for our two bearish scenarios posted from last week. A break of Fridays low and we are almost guaranteed to visit 1008SPX.

Friday, June 25, 2010

Have a good weekend (whoever is left reading)

One chart before I head off for the weekend.

My Vote: Not good enough bulls

Bulls had a chance today but did not come through. Yes I am sure we will see some type of short term rally early next week but bullish scenario is off the table. Next stop is 1008 SPX into early/mid june. While we closed above 1075 this is not a victory.

I really do not know for sure how this will unfold into the 1008 - we now have to determine if we are dealing with the tame bearish scenario or the strong one. Sunday night will lead the way for either a bullish Monday (could it be?) or follow through.

Oh Snap - could it be?

This is a very fitting video for the "oh snap" moment. Being German and driving 3 VW's I always have to laugh at this one.

Bullish Scenario

Just a quick side note, only way the bullish scenario will stay active is a close above 1080 SPX today. Thats a bit over 10 pts from here. Even if we get a close some time next week above that price level it will be too late as the weekly candle will paint the damaged picture.

So bulls have one chance left, though I would not consider it a chance as probabilities are highly weighted against a bull case now.

Thursday, June 24, 2010

And again ....

"I mean really" - how many times have I said that in the past? not many, so its a special moment for me. So what did I say we need for the bullish case? holding above 1072 and no close below 1075. Market sure did want to throw us all a curve ball making us wonder where we going to turn.

I took another small long into the close, but only a fraction of the position I was stopped out earlier in the day (break even so I am happy). Will be watching the overnight session tonight to get some guidance from the other markets.

Added Long

Turning long into a full position here at 1073.50 with stop at ES @ 1070.

EDIT: partial profits @ 1081ES to turn this into a free trade, same stop at 1070

Some thoughts

Ok its been a while since I have made a bigger post in regards to my outlook. There are quite a few possibilities, both bullish and bearish that can develop here. First of course the bearish formation, as you can clearly see we have setup a nice set of channels on the downside that could provide guidance for us going forward towards our 880 levels.

1) Bearish (tame) - the tame bearish could would reside inside the current channel we have formed with the upper range defined by our 1220 peak and the lower range by our flash crash and 1040. In this scenario we are ready to make a lower low in the 1008 range that would then setup nicely for a bullish divergence on the MACD (lower low SPX, higher low on MACD). Time target for this would be July 8th-13th. This could return is all the way back to 1075-1080 before another leg down could start or continuation towards the upside.

2) bearish (strong) - this scenario would overlap into the third channel that we have not yet breached on a close basis with a target of 880. Time target would be a break of 1100 by August 4th-6th and then a strong 2 week move into the 900 range.

3) bullish - now this believe it or not is still a possibility. During this scenario we will not have a MACD cross and holding above 1072 within the next 3 days (to be able to remain in the last sector we are currently in. Many times uptrending markets are not able to hold their trendlines and are required to reset longer term indicators in order to continue and balance supply/demand. This has happened during our 18 months of our lows many times, however, the key difference is that at the moment we have stepped down 2 additional levels giving this the lowest chance out of the 3 scenarios. The great thing here is that we have a clear signal and our lows of today MUST HOLD - we can breach them intraday but a close below 1075SPX in the next 3 days will invalidate this scenario.

Scenario number 1 is the most likely as I am not anticipating another crash here (scenario 2). I am currently not positioned for either of those moves. I did take a long today close enough to the low of the day but this position has a tight stop and is not all that big. I am playing of course for the low probability scenario 3 but a lot of damage has been done on the charts in the past 3 days that will not easily be repaired.

Long ES @ 1072

Trying a long here at 61% FIB levels.

Tuesday, June 8, 2010

Knife catching time again.

Trying another long here. Stop below LOD. Its barely 5 pts of risk. Using futures, some calls, and some ETFs.