Thursday, September 3, 2009

Morning - Let's set Up the Fall Shall We?

Let's set up wave 3 today and tomorrow with a nice corrective 4 up and 5 down and then the 2 corrective. The bulls are gonna fight back I believe. Yet another muted news reaction to the IMO bad employment numbers. When you come in "somewhat better than expected" as reported by CNBS but are still cranking out 500k + numbers, things suck. No way around it. Remember this is a lagging indicator and jobs means nothing in the overall scale of things.

Chart one - Daily /ESU9. Notice the channel? That is the GSEC channel (as discussed previously) Well, it is purportedly petering out. When this breaks down, I'll concede the top is in. That is P2. I would like to point out that that tiny little light blue blip on the chart is the channel we are in now (chart 2 below). Not much in the overall scheme of things. I'm looking for something much more noticeable to start P3.

Chart two - /ESU9 15m. Notice the channel? Wave 1 down as they are calling it (I'm not there yet). First note the top of the channel is right at 1015 now (the 200ma monthly SPX is at 1018). What I also want you to notice are the two strange red lines running thru the chart. The top one is the 50% line of the GSEC and the lower is the 75% line. While not always accurate, the do have relevance when trading inside of larger formations like the GSEC. Notice the interactions with these trendlines here.

I'm gonna call flat to up today as the corrective move off of the last top continues and we set up the 5th wave of this move down. I'm not all that comfortable with the call, but the 30m and 60m indicators are bottoming which might provide some support. /ES fibs are at 50% 1009 and 61% 1014. I do not see the market going back over 1015 for some time but not under 974 either as we churn thru 4 and 5 of 1 of 3 and then have the 2 of 3 corrective. Matter of fact, you can take a week off if you like.

Remember - If you missed the supposed "top" - no biggie. We are in a 1 down. 2 down will retrace a good portion of 1 and provide a good entry point (I use these as places to enter a second half of a longer swing trade or to exit a bad miss). Just so you are in for the 3 down you will get the meat of the move. So, don't freak out. Be calm and patient and set a strategy (and please always use stops).

I'll be posting on VIX, gold, dollar, oil and UNG (again) later today. No news last night as it was a crappy day, so I took a break.

I almost forgot - college football kicks off tonight. Sveeeet!

GL trading.

No comments:

Post a Comment

Keep it civil and respectful to others.