Friday, September 18, 2009

Morning Post - Broad Overview Of The Market

EOM is coming. Opex Friday, so some of the games will end today. Maybe the 58% run up in the market will decide to take a breather as well. Valuation - shmaluation. For those of you that don't know, the charts below show why most believe this P2 market correction is coming to an end. For those that do know, sorry, but I have had several emails requesting this overview.

/ES Daily 2 years - Let's step back and look at the big picture. What we see is the larger channel down (gray) and the current wedge (blue) approaching the top line of the channel (bear market top line). You also see the gap in the /es at 1104 to 1109 (pink line). The 50% to 61.8% fib retracements for the fall are the sky blue box from 1127 to 1235. So where the blue rising wedge meets upper channel resistance (bear market top line) and there is a unfilled gap in the neighborhood you get a very likely point for a reversal. Adding to the formation of the price you can plainly see the daily indicators are overbought with the MACD about to crack the uptrend line (yellow). Volume is also beginning to show signs of life.

/ES - The wedge - The blue rising wedge marks the move up off of the bottom. You can clearly see the process of narrowing price movement as it consolidates in the end. Here you can see the gap/top trendline juncture around September 24th thru the 29th. This coincides nicely with my call for the EOM statement prints then a possible fall.

/ES 60m - The wedges in the wedge - There are now three wedges. The larger blue, the intermediate light blue and the one now being formed by the lower yellow line that is possibly breaking down. I did not think the upper blue wedge line would be breached. I believe this is a throw over of the top lune of that wedge. Price now faces support form this trendline and might need a push to get back thru.

SPX Daily chart - Still in a battle with the upper trendline and bollinger band. The daily S Sto gave a sell signal late yesterday. RSI may have peaked (and will set a nice long divergence if it does). MACD histogram has lost some steam. Retracement levels for the fall are 1043, 1033 and 1023. Strong support area in the 990 range. I am not mentioning the fibs for the larger fall cause there is no reason to discuss anything below the support area at this time.

Have a great weekend. I'll be throwing a birthday parts for my soon to be 9 year old son and getting whipped by a bunch of kids in a nerf gun war tonight. Enjoy some football (nice to watch Ga. Tech get whipped last night by the thugs from Miami - note to Techies, the new offensive system will never win you an ACC championship - NEVER!). I'll update as many charts as possible this weekend and possibly get to the posts on Gold, Oil, Dollar and Nat gas that I have been meaning to get to.

GL trading.


  1. Ya might bounce your view against the NDX chart as it appears spent, and if it is done then SPX is likely done.

    Enjoy the boy wars, but I'd dump the nerf ammo and jump to paintball - these kids need to man-up for the upcoming social unrest.

    Have a good one.

  2. Thanks S135 - Not sure if NDX will lead this time. It will back up, but I have my doubts about down. Who knows. You'll like my vid post this weekend. Had some scum come around and had to start approving comments. Sure sign a top is near. Thanks for the visit.


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