The McClellan Oscillator is deeply oversold, however, we know that when the market is trending, the concepts of “overbought” and “oversold” are hazardous to your trading health.
So, is the market done trending? I don’t know, but Friday’s action struck me as weakish. While all of the major ETF’s were able to bounce up and fill their down-gaps after the disappointing jobs report, the ES was not able to do so. The 4:15pm close on Thursday was 1027.25, and Friday’s high was 1026.25, so there is a 1-point un-filled gap there. That will be an important level to watch in the futures tonight. If the futures can’t tag 1026.25, the bulls will have cause to fret about Monday’s prospects.
For three hours on Friday afternoon, the SPX struggled to recapture the 1029 level, which is one of my Fibonacci levels in the Box of Bulls. The fact that it failed and rolled over into the close suggests that a test of the next level down at 1014 may be in the cards. There was also a note of panic in the drop into the close, though perhaps that was the last whiff of it in this correction since the market was able to close above the intra-day low.
I noticed some other signs of weakness too, though I don’t have time to go into them. Basically, I saw some things that smelled of distribution.
In any case, bulls can take solace in the fact that earnings season is coming soon and high unemployment equals high corporate profits. That, after all, is THE PLAN, and has been official economic policy as far back as NAFTA: outsource as many US jobs as possible, replace expensive American workers with cheap foreign workers, foreign lands boom while Corporate Amerika’s CEO’s buy private jets. So bulls, just collect your dividends and be happy, but make sure to use some of the proceeds to purchase weaponry to protect your self from the masses of unemployed as they turn to street crime. THE PLAN does have a few flaws…
Note: make sure to see George’s chart links that he posted at the end of the previous post:
http://www.trivisonno.com/fridays-trading-10209#comment-47409
“S&P 500 daily Renko has not given a sell signal as CCI still over 100 and SAR under pattern $$”
http://chart.ly/assets/xvp4gr.png
I realize Renko charts might be new to some of you.
here is a brief intro http://stockcharts.com/help/doku.php?id=chart_school:chart_analysis:renko
here give it a go with other stocks and stuff
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=1&mn=0&dy=0&id=p69114327155
i mean check out AAPL if you want
with futures now open I will start my usual blabber.
61.8% fib at 1020.56… current price 1020.75
EMA’s as resitance at 1021.81, 1023.71(also another 61.8% fib at 1023.46)
supports are probably the 1020.56 i mentioned above and then 1014.98-1016.11 where 2 fibs collide.
if we go even further down last chance to bounce iw the 1009.39 where 2 other fibs this time fall on top of one another. have i blabbed enough? oh yea this is using hourly charts.
i had never thought much about the fib arcs till now. fridays ES lows hit RIGHT ON 61.8% arc that i just drew on top of the old fib lines. here goes K using a rounded black magic.
I really hope im wrong monday and we do go down further
I’ve been lurking on this site for a few weeks now (stumbled across it one day) and enjoyed reading the posts. I’m a bit of a novice technician myself, so this appeals to how I think about the stock market. I’ve read Constance Brown’s Bloomberg Press book on Fibonacci analysis and have seen them work very well. I also use candlestick charting. On page 35 she talks about markets using GAPS as strong markers. The gap between 10/3 and 10/10/08 on SPY’s weekly chart George posted, is right at the 1080 high we just printed a few weeks ago.
Also, the 7/17/09 weekly low is the first strong bar on this recent move up. Drawing the Fib lines from the 7/17 to the 1080 high creates another support line just underneath the current SPY price. Ms. Brown is really big on DOUBLE or TRIPLE Fib support and resistance lines. I have added some Fib lines and included a chart for your review here:
http://www.freestockcharts.com/?emailChartID=be4c1ee3-3491-475b-b01e-5ae5c3ec9500
Thanks for letting me post and hopefully I can learn a ton from reading and interacting more with you all. But since this topic is a favorite of mine, thought I would throw my hat in the ring and see how you all reacted.
Goldman To Make $1 Billion If CIT Goes Bust…While US Taxpayer Gets Hosed
Goldman Sachs stands to receive a payment of $1bn – while US taxpayers would lose $2.3bn – if embattled commercial lender CIT files for Chapter 11 bankruptcy protection, people familiar with the matter said
http://www.businessinsider.com/henry-blodget-goldman-to-make-1-billion-if-cit-goes-bustwhile-us-taxpayer-gets-hosed-2009-10
Who can tell? Been expecting this to roll over and it keeps finding new legs to runup. If the markets keep drinking the koolaid….you’d think the new realities would sink in any day now but…
Here’s an interesting little George-like study though built around SPX and five passes: 2Yr weekly finding the resistance level we’re now “paused” at, 1Yr weekly looking at the rising wedge which is running out of room – and if you believe those arguments – three Fib studies with different scales and times (ala Matt’s boxes, sorta) to see where it might go if it busts the wedge downside. If it busts to the upside then we’re back to Matt’s box of…what is it now Bull?
http://llinlithgow.com/bizzX/MktCharts/MktH209/SPX3Oct09.jpg
2thfixr,
WELCOME! Hey, toss all the hats you want – the more the merrier.
Thanks for the chart. I’ve actually spent most of the weekend working on a routine to trade the Fibs, using them as support and resistance. Naturally, that was using the intraday time frames, but I had good success. Not all winners, but every day a winning day.
Thanks
dblwyo,
That’s the problem I’ve been grappling with, trying to figure out “on the fly” when and how to draw the fibs. I may be going about that the wrong way, but intraday charts move rather quickly and it’s hard to tell when highs and lows are made.
Still, your charts show that Fibs are respected across the spectrum. Nice.
Socialist party wins in Greece
Greenshoots!!!!
George-thanks. Aside from whatever arcane mathemagic arm-waving one wants to do if you’re trading you’re betting on patterns and I don’t see any reason that natural “harmonies” or resonances aren’t as reasonable as any other. Plus, de minimus, it’s not a bad discipline.
So there’s some eyeball, practice,etc. here but I’ve been impressed with how well different ones hold up repeatedly. Particularly if you apply a little KT windage. Notice that the 2- and 3-Matt box Fib studies both come up with roughly the same resistance lines; and neither are inconsistent with the single box version, just more granular.
dblwyo, well said.
“mathemagic”… What a hoot!
Stringm,
The flounder came out great. That recipe is a keeper. My wife isn’t a fish luver and she liked it too.
Yum… thanks
I did my weekly powerpoint on the economy (I basically cut through the crap and summarize it into 5 slides mostly graphs)
UGLY going forward!