ChristopherStockGuy: August 2009

Monday, August 31, 2009

Simplified ES view.. rectangle range?

UPDATE ON Tues 8:30 AM: The post below is retracted. It's not a rectangle, its broadening megaphone, becauseTues pre-market ES made another new low. Technical analysis DOES ALLOW for drawing trendlines through prices in certain circumstances, but this is now too much. For me, it's now a broadening megaphone, which can resolve in either direction.

I'm leaving the post but I consider the post below INVALID.

Original post:
One idea is to consider the daily and 60min charts as a rectangle range as
opposed to broadening or any other creative alternative, because sometimes the
simplest explanation just works best methinks.

In the charts below, I've taken the TA liberty of drawing the pricelines THROUGH prices instead of at exact highs and lows, in order to accomadate marginal new highs or lows.

In this view, ES is still in the rectangle range.

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

ebay swing long 32.19 stop 31.87

SSO long 32.18 pre-market

I'll try SSO long 32.18 pre-market

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

ES SPX decision time? soon?

Daily Chart below shows trend still up but in danger of pivoting to the downside. However, an upside move to 1044 is still possible.

Notice that the ES is ABOVE the downtrend line in RSI. If ES re-tests that line and breaks lower (around 40/35ish rsi) then the ES will likely plunge. The Money Flow is still going in an uptrend but it too is close to testing its uptrend support line. The MACD is hovering around 0.

In summary, if the RSI holds over 35ish trendline and MoneyFlow stays up and 1015ish ES holds then ES is likely to make another move up. If RSI, MoneyFlow, MACD and 1015 plunge, then lower prices and possible end of this move up.

ES futures 6:30 AM

Futures have
dribbled down all night long. The test
now is whether the bears can keep it
under 1027, or if the bulls can pull
the 60min out of oversold
and push above
60stoch and above 1031.
at this moment the
charts suggest that the bulls will try to
push it back up, so lets see what
happens. If they push it above 1023
then 1025 1031 is
likely. last is ES 1020.50

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

Sunday, August 30, 2009

Swing possibilities: EBAY, PRU

On Monday, if market direction continues up, I'm considering the following SWING positions. I will give details on WHY I like them if I enter them:

This is what I have for now as far as prices, they might need to be adjusted on Monday depending on any gap ups/down.

1. EBAY.... target 24.27 and 25.19... last EBAY on Fri 22.46. Stops at 22.21 and 21.83. Possible re-entry if stopped and 21.60 holds.

2. PRU ... also considering long.

Will add others I'm looking at also... PRU
Will also add short ideas.

Saturday, August 29, 2009

ES -- short term direction for Sunday eve

It's very hard to tell where the ES is going on Sunday night. I'm not spending a lot of time on different scenarios for Sunday eve, since the ES will unfold and tell the story for the market open on Monday. The 15minute chart has many different potential patterns, both bullish and bearish. For now, let's just wait to see how the chart matures on Sunday eve/ Monday early morn pre-market.

Right now, I see the bias as slightly UP (bullish scenario below) as long as 1025 holds, based on the 15min and 60min charts. The 15min chart is posted here, the 60 min charts are posted in the post below this one.

Expect ES to trade between 1025 and 1030 until either breaks.

Bullish: 1030 breaks higher, then expect 1035, 1038, 1044, 1060.

Bearish: 1035 breaks lower, then expect 1022,1015, 1008, 997

What's going on thus far in the ES? The chart below suggests a range with support at 1020 and 1015, with resistance at 1032 and 1038. Most of the action is between 1020 and 1032, with what appear to be false breakouts above 1032 and below 1020. Thus, the use of stops is even more important, especially for any momentum breakout trades.

What we seem to have is a channel (rectangle) in an uptrend, which can resolve either to the upside or downside. Since the trend is up, I consider it up until broken.

ES analysis...next 3-5 days- where are we going?

THIS POST IS STILL BEING REVISED... UNDER CONSTRUCTION

The monthly trend is up and approaching monthly 20MA resistance at 1083, with support at 1029 and 945.

Weekly MA: support at 904, 935, 952, and 1011. Trendline support 950. Trendline Resistance 1066 and 1142.

Hourly ES 9 days

Green fan represents high of 8/24 (low of 8/18). The fib fans are holding for green. If green breaks then we use the next level down red fans. It is rather amazing that the lows consistently have bounced off of the RISING green fib line #3. But if that line is broken, a change is usually indicated.

This chart shows the fib fans from the beginning of the trend that started in March

Weekly SPX
Weekly trend is up. The SPX has a doji / spiinning top candle this week, which is not itself a reversal but a warning. The dojis need to be confirmed by a close beneath the low. Also, looking back at the weekly candles since September, notice that most of the spinning tops were pauses and the current trend continued. Only a few acted as a reversal.

Monthly SPX
The monthly trend is up and approaching monthly 20MA resistance at 1083, with support at 1029 and 945.

Friday, August 28, 2009

ES [re-mkt

4 hours later... ES 1032 continues
to hold showing very bullish bias.
However, watch out for a poss
bearish HeadShldr 15min ES to dev

Bias is still up

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

Friday pre-market ES futures

Overnite the futures low/high was 1027 / 1034.5.

Scenarios:

Bullish IF 1032 holds then test 1037, 1041, 1044, 1050, 1061
Bearish If 1030 breaks lower then test 1027, 1025, 1021, 1015, 1008, 1001, 997

Right now the bias for next 2 hours is UP, especially if 1032 holds and doesn't break. Under 1032 there are multiple layers of support. The support layers are 1027, 1025, 1021, 1015, each of those needs to be broken before there is any chance of seeing 1008, 1001, or 997. Of course yesterday we saw how quickly support can be demolished to the downside, it can happen in hours, but the support levels must be respected nonetheless until broken.

Most important support levels are 1030 and 1026 for the next 8 hours.

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

Thursday, August 27, 2009

Time to short DOW or SPX for mid-term hold?

Not just yet...

Mid-term trade (months not days) I will short:

9703 DOW and
1061 SPX,

using SDS DXD
if we get that high

Of course, protective stops will be in place, as always.

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

Updated ES chart

Updated chart. I did not change any of the lines, the only difference is the new candles and stochs to reflect acticity since 1130 PM.

See the post below called "Possible ES timeline" for details.

ES updates Thurs morn pre-market....

For details, see the post below called "Possible ES timeline"

4:29 AM update: Ok so the inverse Head And Shoulders did develop as expected and noted earlier before it formed. And it formed as expected because 1020.50 low to 1027 neckline is 7 points....projecting a target of ES 1034 (1027+7). All as expected, classic action (so far at least).

This is exactly why I exited that SDS position afterhours yesterday (post below somewhere).

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

(1) New ES targets, and (2) where should the SPX be now?

(1) I have revised my ES targets:

UPside breakout: 1044, adding 1053 second target
Downside Breakout: 1016, 1010, adding 1006 third target

(2) Regarding the SPX, IF we assume that we remain in an uptrend, and that uptrend is valid, the daily charts suggest that a "normal acceleration uptrend" should have the SPX at 998 on Aug. 26, not at 1028. The "normal" uptrend would have SPX at 1005 on Friday 8/28 and 1027 on 9/4. The rapid acceleration suggests that a pullback should occur, even WITHOUT a change to downtrend. The fact that the SPX accelerated this rapidly suggests a correction, however because the trend went up fast, the "correction" could result in a rapid decline, changing the "correction" to a "reversal".

Longer term, the scenario calls for a continued up and down until Q2 in 2010, followed by a dowtrend reversal that slowly declines for the rest of 2010.

Just some thoughts....

Possible ES timeline

Timeline if ES continues at its present velocity and doesnt accelerate or decelerate. (However, the fact that markets open at 9:30 AM might slow its pace so that the breakouts below happen at 930--11AM). But for now, at 2AM, we assume the constant speed velocity.

It's now 2:49 AM, but around 7AM: Test 1028. If ES breaks over 1028 then on the way to test 1037 in next 3 hours. OR if 1028 R holds the ES turns down to test 1020 in next 3 hours.

Right now the break higher is indicated, despite the fact that this is a DESCENDING triangle, which usually break DOWNWARD.

Again, If ES decides to stop shenanigans then it might decelerate its velocity and decide to to the 7AM test between 930--11AM during normal market hours. The 7AM timeframe is based on constant present velocity.

Below is a zoomed out view

ES futures Thurs 1:40 AM - more shenanigans

ES tests 1020 YET AGAIN and holds. Notice how the ES is up to shenanigans again.... testing levels during the evening hours and then refusing to re-test them during 930am---4pm.

IN any event,

Bullish: If 1025 holds, expect 1032, 1036, 1037, 1041, 1044, 1049
Bearish: If 1025 breaks lower, expect 1020, 1018, 1016, 1010, 1002

At this moment, ES looks ready to shoot to 1032 within the next 5 hours. Even if ES drops to 1023 an inv HS can form, propeling it up provided the 1023 holds.

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

Wednesday, August 26, 2009

Wedn eve ES futures update S&P 500

ES declined to
1022...and bounced off...1022
continues to hold. For equities traders,
it's preferable that we don't get any
big action overnite in the ES, which will make
it much easier to trade during the day
via equities or etfs

i did exit my sds
swing AH due to the conflicting
signals. I also expect 1016 / 1010 test
similar to dgp

but i know we can
also hit 1044

so i exited sds with
small profit, preferring to re-enter sds
tomorrow either around 1030/35
area, 1044, or even UNDER 1022

a close under the
1022 would confirm the 3 doji candles
the last 3 days

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

Updated ES chart

ES again

Well look at that.... a few minutes after i posted chart below shows what happened. ES briefly pierced marginally the white DT line and reversed exactly at the green DT line

The saga continues........

ES mini update--mini R test now

very interesting....ES is hitting the new R trendline
rite now at 1028

will it break 1028 to retest 1030 or will the 1028 R
trendline hold it down?

the 1028 R trend is new so still weak unproven

1030 would rep mini HORIZ resist not trendline R

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

ES test of 1016 likely

Quick conclusion: A test of 1016 is probable. There is now R at around 1032 and 1035 on the way to the 1044 target that everyone is talking about. Now its only 5:10 AM as I start writing this so things can change, but this is where we are right now.

In the SPX vs ES chart (see last chart for SPX) note that spx 20/50 MA is 1028/1010 vs ES 1026/1027... need to watch that.

Details for chart below:
MACD not telling us anything much different so I removed it from chart to avoid clutter.

Grey ovals show heavy resistance at 1035/37 (Triple test). So ES might not hurdle the 1037 on this trip, if at all. Notice also that the prior 2 tests of 1035 the ES was above the yellow support line (which is now resistance). Now, however, to get to 1037 ES must penetrate the yellow R trendline also (probably around 1032), making the task tougher.

Also note the downtrend R line in the RSI. The stoch is throwing a semi-bullish signal that conflicts with RSI but unknown if stoch will turn down at yellow oval. Charts suggest it stoch probably will go down but something to watch. If it does turn down then we have a bearish stoch cross confirming the RSI. The RSI downtrend R line must be respected until broken. Its possible for stoch to go up but still not break the RSI R line.

The dotted yellow lines so potential paths of price movements.

At this time, I'm not calling necessarily for a trend change, but a test of the important 1016 area seems likely and is very possible. Hopefully that test will happen during regular market hours, not after hours.

The salmon colored trendline is newly drawn to support a more bullish case (many chartists would delete the yellow line and replace with the salmon one, I'm not doing that because the yellow trendline is more significant with 7 touch points vs. 2 for the pink). The salmon trendline can be considered a speedline, but there are other speedlines (higher) not shown, that I posted in an ealier posting.

Below is a zoomed out view of the same chart that shows SEVEN points (not two) touching the yellow trendline, making it rather valid.

Below is an SPX chart not ES

Tuesday, August 25, 2009

SPX long term bearish M

Monthly chart

What's up with the BOSE music posts?

Music is a great motivator and balancer.... builds and sustains confidence... puts us back in place when we r wrong... so during day i often listen.

However, when doing analysis I need to turn it off... I'm not one that can concentrate on new analysis when music is playing because I play the music notes in my head which interfers with concentration needed for the equitites.

But while watchin charts or price action its often playing

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

Music --- eye of the tiger

BOSE tune crankin now is Eye of the tiger :)

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

ES update Tues morn 7:19 AM

ES basically followed the plan in the post below. Went up to 1026 and failed, down to
1020, then pivoted up off 1018 (not 1016 as posted below but close).

It's now at 1027, above the 1025.

New pivots: Almost the same as below, but note that in the 15min chart the breakout higher point is 1024. It appears to be trying to pivot UP again off the 1026, so 1024 hold would indicate consolidation while over 1026 indicates test back up to 1033

Bullish: If ES stays above 1026 and sustains, then possible 1033 retest. 1044 would be next.

Bearish: If ES stays breaks under 1024, then test 1021, 1018, 1016, 1008.

Right now, the bullish scenario is in play. The fact that ES pivoted off 1018 not 1016 is bullish indeed, at least for now.

Also 1028 up needs to be broken to get to 1033....1028 could be significant pivot if it turns down there

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

Monday, August 24, 2009

Quick ES analysis for overnite futures Monday

Here's a quick, brief, high level view of what I see for ES for rest of night. I sometimes give more detailed analysis, but this is what I have for now...maybe update later... been spending time looking at some other charts instead of the ES analysis.

Analysis:

1025 pivot.

Bullish: If ES moves above 1025 and sustains, then possible 1033 retest. 1044 would be next.
Bearish: If ES stays under 1025, then test 1020, 1016, 1008.

After ES churns all night, it would not be surprised to see it end up right back at 1025 after all the ups n downs.

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

Fib fans below

The fib fan charts below are provided to offer counterpoints and "keep us honest".

As long as ES holds around 1016 / 1008 it can be considered in an uptrend... but the triple trendlines in charts below are interesting.

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

More bullish fib fans (counterpoint)

And here is a re-draw of ES with more bullish fib fans, not indicating a trend change.

The key will be if 1016 and 1007 support hold in the ES.

One problem with the bear fib fan break (in the posting below this one) is that the slope of the fans is so steep, that one could easily argue that the trend is just slowing. A 45 degree slope would be normal, those fib fans are steeper. A low slope will indicate exhaustion however and generally the end of the trend.

Fib fans and trendline break signal possible end of this move up

The yellow line in the chart below is a hand-drawn trendline that I put in.

The RED lines are the triple fib fans.

I did not "make this fit"...!!!! In fact, I intentionally moved the yellow line a little higher because it nearly overlapped the red fib fan, making it hard to see.

I simply chose the initial uptrend before the first consolodation as the basis for the fib fans (signified by dotted red line).

THIS CAN PROVE VERY SIGNIFICANT.

No guarantees but the penetration of the third fib trendline (or any third tredline) generally results in a reversal and marks the end of the previous trend (in this case up)

I was tinkering with this yesterday and saw no correlations... but a day can change anything. We do have multiple conflicting signals, technically we are still in daily uptrend, BUT THIS FIB FAN BREAK COULD BE SIGNIFICANT.

ES and RSI re-test

Last Thurs I was short via SDS and exited, partly because the RSI down trendline was pierced and violated upward. Now a possible retest of the trendline seems possible... will the RSI hold and bounce UP off the trendline, or will it pierce lower? A pierce lower on a DAILY RSI would be bearish indeed, although as I write this it seems it will hold and bounce up.

Daily results

Profitable day. Profits exceeded loss by far.

1. SSO long around 32.68, sold 32.95 and higher (PROFIT)
2. SDS long 42.60, sold 43.21 and higher (PROFIT)
3. SSO long around 32.53 sold 32.41 (LOSS)

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

YHOO long 14.97 target 15.38, 15.71, 16.09

Possible YHOO advance.

YHOO long at 14.97.

Initial target is just the 15.38 and 15.71 for now. Unless things change, YHOO looks weak mid-term / long term.
Targets for YHOO are: 15.38, 1571, 1609, 1621, 1652, 1692, 1708

sso bought pre-market 32.68

i bought sso pre-market 32.68

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

ES Futures continue to act as expected

Mon 7:19 AM

ES futures actually continue to act as expected. ES hit 1032.5 and slowly declined all night to hit a low of 1024.5.
As long as ES 1023 holds on a CLOSING basis in the 15//60min charts, then the Bull Flag remains in tact and we would expect the ES to re-test that 1033 and then go to 1049 if 1033 holds.

A hold at ES 1026 instead of 1023 is also possible and would show even more strength in the ES.

We still have 2 hours until the 930AM open, so lets see what develops. Again, if ES near the support then possibly I might take long entries in SPX SSO and then reverse to the short side. We will see.

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

Possible stocks for Monday

Possible new long swing positions in the following:
SSO
LLY
BIIB
VRSN

Possible new SHORT swing positions in the following:
SPX SPY (via long position in SDS)

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

ES Sunday 12:19 AM

ES continues on the roadmap, without disrupting the integrity of the SPX, at least so far.

If ES continues to range trade around this area, then I might be able to initiate long positions on Monday morning (if SPX opens near support) and then switch to short for intraday trade. If SPX gaps UP near resistance, then MAYBE consider short, but that decision will wait until 9:30AM.

During the day I'll consider some swing trades if merited.

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

Sunday, August 23, 2009

Swing techniques / ideas

I'll elaborate more on this later, add some charts and more details, but for now.... here are some things i like to do for SWING positions:

for swings of 1-5 days hold, i use weekly daily hourly
15min.... the safest most profitable
trade is for weekly and daily trend to
all be up ...

....and use the
15min charts to time the entry

i also use MA stoch
fibs support resist rsi macd on all the
charts...as well as trendlines i
draw...and also the horizontal Resist
and Supp

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

ES hit first target 1033 (1032.50)

wow ES hit 1032.5 then backed off exactly as expected...its still early in the eve but the script is playing out... will
check again later

If ES futures goes up to high too fast it could crash before 930AM... will need to re-eval at 900AM to see appropriate direction for the open at 930.

IF 1023 holds then ES should see the second target 1049.

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

Bull Flag breakout in ES or SPX first?

One thing that will be interesting to see is if the Bull Flag mentioned in post below breaks out higher in the ES overnite, AND THEN ALSO overnite the ES reverses lower. If THAT happens then it would cause a gap DOWN open in SPX on Monday 9:30 AM. However, respect multiple support levels below where buyers might wait or shorts will cover, holding prices up.

So we will need to wait and see how this plays out.

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".

SPX to 1033 / 1049 (Bull Flag)

This analysis is presented on Saturday eve, well before the ES futures start trading on Sunday eve. We all know that the futures action on Sunday can totally change everything.

The weekly trend is up, the daily trend is up, the hourly trend is up/consolodating, so for now I believe the following bullish scenario will play out. Charts to support the scenario are below.

Bullish scenario: There is a bullish flag formation in the hourly charts. If the bullish pattern holds, then it projects to 1033 and then 1048 if 1020 holds and then even 1060/73. Interestingly, all timeframes (weekly, daily, hourly) suggests an SPX increase to 1033 or 1049. Could go higher to 1073 and beyond, but the 1033/49 seem logical at this point.

Here is the detailed information: Notice how these are all close to 1033 and 1049.
Weekly chart: fib exten for 667 to 935 is 1033 (38%) and 1073 (50%)
Daily chart: fib exten from 869 to 935 is 1003 (100%) and 1043 (160%)
Hourly chart: Bull Flag calculation pattern points to 1037 and 1049.

Of course, prices won't go up forever, we will get a reversal down, but for now looks like we are headed to higher levels first if the Bull Flag holds.

Bearish scenario: if the Bull Flag pattern breaks down: Retest 1013. If 1013 holds then up we go again. If 1013 breaks then 1006, 1000, 996, 992. If 992 breaks then we likely convert to a downtrend and the upmove is finished for now.

Saturday, August 22, 2009

Shenanigans in ES require more vigorous analysis -BOTH ES futures and SPX charts

Due to the shenanigans lately in the ES futures activity during the 4PM to 9:30AM overnight session, I will now start evaluating BOTH the SPX and ES charts. I have been evaluating both all along, but a more vigorous discipline needs to be put in place.

Why? Because the SPX reflects what ACTUALLY happens with stocks during trading hours, which is directly related to the ETFs as well. The ES activity is causing several surprises in the SPX with gaps. Now we know this is nothing new. However, making trading decisions based solely on the ES is tricky, because often the analysis will be correct but unactionable due to the overnight sessions of the ES futures.

As a simple example, yesterday the ES was showing a perfect setup for a retest of the 996, which I suggested would happen, and it DID happen during the overnight session. You can review the timestamps and see that my analysis was posted before the actual decline.

However, the ES pivoted off the 996 during the early morning and the day opened at 9:30 with a powerful upside advance. Now on Thursday I entered a swing short positions around 1005/07 in expectation of a test and possible break lower of 996, with the expectation of locking in profits at 996 or lower if it broke. But because the test of 996 occurred during the early morning ES trading (pre-market before 9:30), a double low formed overnight, the SPX gapped up, and I was stopped out of what should have been a good swing trade.

Now this is not an excuse, just an observation and explanation of what happened. Even with the more rigorous approach of using both ES and SPX, losses will occur as well as profits. The key is accepting the loss, getting stopped out, and moving on. Also key is choosing the right size position so that any losses do not wipe out the portfolio. Many times traders enter positions that are too large, and they incur large losses as a result. That's not good risk management. The approach that I advocate is to choose a position size (i.e number of shares of stock and dollar amount invested) such that if I incur a LOSS, that loss is not more than 2% of my portfolio. So, if the portfolio account is worth $100,000, the loss should not be more than $2,000 (or $200 loss for $10k portfolio, or max loss $20,000 on $1,000,000 portfolio size). Note that this does NOT mean that we need to set our stop at a 2% loss. We can enter positions with a stop set at 4% lower, AS LONG AS the dollar amount doesn't cause more than a 2% PORTFOLIO loss.

Friday, August 21, 2009

Grrr.... perfect overnite analysis yet swing loss

So frustrating....everything was lined up... my overnite analysis roadmap followed exactly as I thought...then BAM.... the RSI trendline down was violated and I was forced to exit my swing SDS at a loss (about 4%). Well, that's Mr. Market. All we can do is trade intelligently, use our stops, stick to discipline, and be willing to take our losses and admit a bad trade, no matter how well founded it was.

For the week, profits exceeded the losses, but a frustrating way to end the week with the crazy turn in the ES.

We will be back at em on Monday.

ES Futures update Fri 5:53 AM

The ES bounced off the 996, pierced 1004 and is currently at 1007. This pattern is very similar to the pattern we saw Thurs, where there was a decline followed by a rocket higher, as mentioned in previous post below. Will the ES continue to mimic Thurs and go up to the 1012/1015 area? Or will it stall at 1008 and turn down again.

Looks like the bull stoch cross mentioned in prev post below did take hold and propel prices up. Very interesting because the daily RSI is still below its down R trendline...touching it...testing it... while it remains below we are still bearish and have another bearish divergence of higher prices but a less high RSI. It's a battle right now.

Right now, the charts suggest that 1007 will be broken higher for a test of 1010. If 1010 breaks then 1016.

After that, we will see if it turns down or not.

ES nitely action...12:52 AM after midnite

OK so the futures hit my 996 (well 996.5) and are bouncing up to 998. As long as the bounce up is < 1000 then ES should easily re-test 996 and then if 996 breaks then 992. Remember though that on thurs the ES went from 1002 to 994 and then moved UP to 1002 by 9:45AM at market open.... so we need to stay nimble here. Anything can happen, though the roadmap is playing out perfectly now.

Thursday, August 20, 2009

ES Chart update, and why I went short today

Most of you know that I went short today via SDS. I layered in SDS 3 times between 1004 and 1007. This was based on charts I drew yesterday that continued valid throughout the day.

In my post from Wednes 5:07 pm titled "ES up to 1007 or 1016 then down to 965?" below, I suggested that ES would go to 1007 or 1016. Today Thurs it hit almost exactly at 1007 and began the current decline. The RSI trendline remains in tact, even WITH the advance higher today to 1007. The move up did not violate the RSI, rather the RSI made a lower high, with a higher price (this is divergence and bearish).

I've re-attached the updated chart here. Not much has changed, the original chart remains valid.

ES nitely action...11:29 pm

ES broke under 1001 and charts say still lower prices. What is unknown is whether it will bounce back up during the nite.

ES nitely action...early eve

It's still only 9:58 PM in the futures, but the 15min and 30min charts developed a Head And Shoulders pattern. Current outlook is ES decline to 1001 and if 1001 breaks then 996 then 992. If 1001 holds then 1008 re-test and then 1010, 1016, 1025/50.

Let's see what happens during the next 11 hours, still a long way to go. Right now, the bearish case to 996 is what I see.

ES futures update

[07:47:02] doesnt look like 998 is holding... i still think ES will bounce up so will not fade an
open gap if ES is this low... might even take long scalp not sure....or might not play the open and just wait on sidelines

At 6:40 I suggested a decline to 998 and a bounce up...we did get the bounce up at 7:00 AM but it hit a wall at 1002 and declined... the ideal scenario called for a higher high, instead it turned down and is now at 996 headed maybe to 992.

Thurs 6:40 AM:
ES made a high so far of 1003.75, is currently at 1000.50. It looks like the 1000 support will be broken at least temporarily for a test of 998. 998 must hold for possible re-test of 1004 and then perhaps go to 1007.

An ideal setup would be for it to get to 1004 or 1007 for a possible SHORT when the market opens to fade the gap up. Right now, charts are showing signs of upward momentum fatigue which suggests a fade, but of course that could change in the next 3 hours. Will re-eval then to see.

-----------------------------------------------------------------------------------------------

Wednesday, August 19, 2009

ES up to 1007 or 1016 then down to 965?

Daily results Wedn, and why tna not tza?

TNA daytrades did well. Bought in at 35.08, 35.27, 35.36...and sold at 36.70, 35.64, 36.20.

Why TNA and not TZA today?
Well, On the TZA LONG chart in the post below, I suggested if TZA did not hold 15.93 support that it would go to 15.43. On Wedn, support broke at 15.93 and TZA made a low of 15.59 (close to the 15.43). Since TZA broke down, I immediately switched to its inverse, TNA.

ES futures update

For this morn intraday, I see 978 as pivot.

> 978 implies restest of 982, 984, 990, 992
< 978 implies 977 retest, 975, 972, 968, 961

TZA long at 16.05

Monday, August 17, 2009

ES bounce or decline?

TODAY IS A KEY DAY I BELIEVE: whoever rules today, bull or bear, should have
continuation followthrough for rest of week. Why? Because previous ES overnite double low
bottoms have held ...

Let's note that thus far, some bulls did step in on the ES at 7:30 AM

ES futures update

Well the ES plunged to 982.75 thus far in ES overnight trading, decisively breaking important support at 998. The 982.75 is very close to the Aug. 3 breakout higher point of 981.

The bears remain in control now as long as ES < 997. However, as nasty as this looks, we need to beware of the bulls stepping in around the 985 level, which could propel prices over 1016.

Bearish: Any advance today makes it no higher than 997. Ability to hold ES under 992 sets up the bears for a powerful nasty plunge lower to 972, 963, 950/46

Bullish: Bulls would need a powerful advance up, breaking above 992 and 998, then need to test and hurdle 1007 if there is any chance of them getting to 1016 or 1025/50.

Sunday, August 16, 2009

XLF / UYG bullish chart

XLF (and therefore UYG) also look bullish. In fact, XLF looks stronger than SPY / SPX

SPY bullish W or 2nd right shoulder

The chart below suggests a possible bullish W formation in the SPY, or the building of a second right shoulder within a larger bearish Head/Shoulders pattern. If the W stalls, then the H/S is still valid, if the W surges, then it will invalidate the HS.

Either way, the chart suggests SPY increase, either to 101.50 or 102.50/105.00

Chris

Saturday, August 15, 2009

Hourly chart to support post below

Double click the chart to enlarge it.

Daily ES futures chart to support post below

Double click the chart to enlarge it.

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Monday, August 31, 2009

Sunday, August 30, 2009

Saturday, August 29, 2009

Friday, August 28, 2009

Thursday, August 27, 2009

Wednesday, August 26, 2009

Tuesday, August 25, 2009

Monday, August 24, 2009

Sunday, August 23, 2009

Saturday, August 22, 2009

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