Thursday, September 17, 2009

Morning Post

OPEX week continues to baffle. I hate 'em. Bull mode persists. What I thought was a rollover channel has morphed into a rising wedge. Wave C of the corrective is killing the bears that are getting more impatient every day. This has happened from every top since 750 on the SPX. Disbelief and agony are reflected all over the place as the bulls enjoy their moment in the sun.

We are either in 1 of C or 3 of C as I have been saying. I did not think the market could break the trendlines above yesterday, but was proven wrong. The bush hogs have come thru and cleared the path, with the only question being is this 1 or 3 of C. My targets for my 60m chart continue to be 1078 for 61.8 of A and 1126 for 100% of A. That should be the range (barring the count is right).

Missing the run and investors wanting to pile in has been a talked about a lot these past two weeks. That is normal for a topping scenario. I was disappointed when the upper wedge-lines for all but the DOW were cracked yesterday. Sorry, did not think that would happen. I shorted with SDS at 1060 SPX when it hit the trendline and SDS also touched it's (now former) all time low at 40.38.

Daily SPX chart - You can see the large blue rising wedge. The fibs for a fall are 1038, 1029 and 1020. A massive support area persists around 990. WHAT IS KEY HERE is that price has blown thru the upper BB. While this does not predict an imminent fall, it certainly hints at either severe bullishness (if we are in a 3 - soon to be 4 of 3 of C) or a topping (possibly ending 1 of C). The Daily indicators suggest we have room to run, but not much.

60m SPX chart - You see the targets mentioned above on the left that have been there for over a month now. The only thing that is new is as of yesterday morning, before the open, I am now questioning where B actually is. The indicators (which on the 60m don't really mean crap anymore) all show the uptrend as nearing a top and overbought conditions.

WEEKLY SPX chart - Now let me bring the Weekly into play. Look at one thing - the RSI. When the RSI crosses the red line (barring some sort of embedment) the top will be in. The weekly indicators are embedded for goodness sakes. I guess the P/E ratio reflects this, hugh?

/ESU9 10m - Open interest is DOA. The yellow channel that we followed for a week finally broke down and then the rally hit. That has me leaning to this being a 3 of a 3 with a 4 and 5 to come. I was amazed when the upper trendline was breached (esp after I finally entered a short trade). Throw over top anyone? Any one? Bueller? Bueller? That is what I am hoping for. The gray line is the upper wedge line. The red line is the 50% line of the larger channel off of 667.

/ESU9 30m - Here you can see the two channels that have dominated trade for the past two weeks.

I am going to work out a new format for the morning post that gives a bit more data so be looking for that. I would appreciate suggestions from you as how to improve the Morning Post, so please email or leave in the comment box.

GL Trading!

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