Tuesday, May 18, 2010

Morning Post, SPX, S&P 500, E-mini

Struggling with the post this am as I hate calling against conventional wisdom which screams that the sky is actually falling.

Earnings Calendar - HPQ, HD and WMT

Economic Calendar - Housing Starts. PPI.

Pivot Points - Know 'em

EUR over 24 now after the stick save. Looking for 1.2519 retrace. Problems are not over, but band-aid containing the wound at this time. Pumping massive amounts of cash into any situation will cause near term euphoric sensations. Problem is what happens when the party ends?

Oil threw in a fat gap overnight and shot above 75.  Gold trending down on lower volume. Natgas going up for some strange reason.

Minis up 8 at this time after a replay of last night, down then up. What causes the nights to go down? They are sneaking out the back door on you. Pump and dump. Was there a inverse H&S formed over the past 36 hours on the minis with the head at 14 and the neckline near 38? (64 target). The way I see it the minis wedge broke down, they fell to the wedge target line, also to the 50% retracement and are now recovering. This should be a measurable move. The backtest of the P2 support line happens at 47 which should cause resistance. 43 to 50 is the 50% to 61% retracement zone from the last high. I'd say 47 will be a tough nut to crack, but it is not impossible. (Update - reversed at 1147.5)

SPX - Red and pink dashed July S/R lines keep coming in play (look at all the hits). SPX has completed a 38% retracement of the last fall. Does it want more? The red line resistance at 42 up to the bronze line near 55 should be it. Kinda wide range, but these days you don't want to get to specific. Gotta leave some room for error. Speaking of room for error, I'm not leaving out a run into the low 70's as a possibility. Here is a link to the chart with the wedges I am seeing.

GL out there. It can turn on a dime, so always have your stops set. Don't be be afraid to chase daily trends. Yesterday was a great example. Be nimble. We want volatility. We want it to make big moves. Don't get joined at the hip trading one side or the other. Yes, I am a permabear, but I like to make $$$$$. I'll post something if necessary. Sorry I did not post the turn yesterday. Keep an eye on UDN.