Market Update, 2010.02.05

5. February 2010
Comments (0)

ES Weekly: Looking at the largest pullback we had since the March 2009 lows (the June/July 2009 pullback, left blue arrow) and take an extension of that from our recent highs, we have a 1:1 pullback at 1054.50.  We hit this area last night.  Next level of support at 1029 lines up well with the pullback in November of 2009 (green line).

 Below that, we could see a return to the 875 area.

 

 
 

Market Update

Market Update, 2009.10.28

28. October 2009
Comments (0)

ES Daily:  The S&P has come, yet again, into a sweet spot for buying.  Will this one fail?  GDP and Employment numbers tomorrow morning should give it the motivation to pop or break. 

We are at a level of symmetry (blue arrows), a 50% retracement (975.50 to highs), and the bottom of the trend channel (which is caused by things like symmetry).  This level lines up well with the highs of August (giving support).  However, many of the indicators are looking bearish.  Once again, news tomorrow morning will be a deciding factor as for direction.

UPDATE: Big rally the next day, 20+ ES points, wiping out the Wednesday red candle. Low tick of 1037.25, perfect with the 50% retracement.

 
 
GLD Weekly: This Gold ETF is retracing and about to revisit a previous high.  Bounce for a long?  UPDATE: GLD up ~2% the next day.
 
 
 
EWZ Weekly: The Brazil ETF is at a great point of symmetry.  Both blue arrows and both red arrows are of the same length.  Bounce from here?  However, if the US markets fall tomorrow, it wouldn't bode well for EWZ.  UPDATE: US markets rally the next day, EWZ up over 8%!
 
 
 
DX Weekly:  What a week so far for the dollar!  It seems the USD is getting a nice pop off the 0.786 retracement of the full move.  Plus, some nice symmetry of the initial fall off highs (both blue arrows are the same length). 
 
A couple interesting articles about the USD (and Euro):
 

Market Update

Market Update, 2009.10.19

19. October 2009
Comments (0)

ES Daily: After rallying off the 1.272 fib extension on 10/2, we went right to the 1.272 fib extension to the long side (blue arrows).  Friday gave us a great reversal off that area.  Monday should tell us if we are to break higher and out of this channel or back down to the bottom of the channel (red arrow).

 

$INDU Daily:  The Dow hit a similar target as the ES, as well as hitting the underside of the rising wedge (red lines). Careful of a correction from here.

 
 
$NDX Daily: The NASDAQ didn't pop to new highs, but instead hit a double top.  Also, ripe for a correction.
 
 
 
$TRAN Daily: The Transports also hit a double top.  If the NASDAQ and the Transports are considered leaders, then it makes sense they are hitting similar targets at the same time.  Also notice the 1/22/08 low is still serving as resistance.
 
 
 
$BANK Daily:  The banking index is also considered a leader.  However, $BANK seems to be trapped in a wedge (bullish flag?) after bouncing off the 50% retracement. 
 
 
 
6E Daily: The Euro keeps bumping up to its target and has yet to break through to the upside nor down. I am still expecting a reversal, but time is an enemy.
 
 
 
CL Daily: Crude made a perfect ABC pullback (where A=C) and rallied to new highs.  Currently, CL is hitting the 1.272 fib ext target at 78.72 area, so a correction wouldn't be unexpected.

 
 
DBC Daily: The Commodities ETF made a very similar pullback as CL, but hasn't quite reached its 1.272 target at 24.31. 
 
 
 
DBA Daily: The Agriculture ETF has hit its upper trend line, which wouldn't be surprising to break to the upside.
 
 
 
ZB Daily: The Bonds hit its 1.272 target (blue arrows), as well as hitting a double top (horizontal red line), the 200 sma, and the top of the trend channel.  So, it's not surprising to see a pullback after that.  Bonds are now hitting the bottom of the trend channel and looking to retest highs (green arrow).  Bonds rising fits well with the US markets ready for a correction.
 
 
 
 

Market Update

Market Update, 2009.10.05

5. October 2009
Comments (0)

ES Daily: After a nice pullback last week, we found support at an ascending trend line (blue line), the 8/7/2009 high (1016), and the 1.272 fib extension of the initial move down (all around the 1016 area).  Today (Monday) we rallied to the 8/28 high (1038.75).  This level is a level to watch tomorrow to see if the bull break it higher or if we will continue back down and below the blue trend line.

 

 

$INDU Daily (Dow):  The Dow broke through the ascending wedge (thick red lines) and found support on the trend line from the recent swing lows (thin red line).  This level also lines up with 8/7/2009 high.  Like the ES, resistance was found today at the 8/28 high.  Tomorrow will be telling of the market's direction.

 

6E Daily (Euro):  The euro came close the 50% long at 1.4443, then rallied to the 50% short at 1.4665.  This is an important area to watch for tomorrow to see if the bulls can carry this higher or if the bears will see this as an add spot.
 
 

 
CL Daily (Crude Oil): Support was found on the 1:1 fib extension (65 area) and rallied up to the bottom of the recent support (now resistance).  As you can see, CL is moving very precisely and technically between the Fibonacci levels.

 
 
DBA Daily (Agriculture):  DBA made a quick 50% retracement from previous highs and quickly returned into the downward channel.  Today gave a retest of the top of the channel.  Watch for a continued move down into the channel. 
 
 
 
ZB Daily (30 yr Bonds):  After a bounce off the 50% retracement, bonds are finding resistance at the top of the ascending channel and the 5/15/2009 high.  Bonds are also hitting AGET's MOB (big green area). This will hopefully give another entry to the long side after a pullback.  

 
 
ZG Daily (Gold): After a nice 50% retracement from the beginning of the big pop, gold has broke above the downward trend line (descending blue line).  This was also a nice AGET "False Bar" setup on the stochastic.
 
 
 
 

Market Update

Market Update, 2009.09.28

28. September 2009
Comments (0)

ES Daily: Today gave a big rally off the crossing of the two red trend lines shown below.  After continued divergence on many indicators, the market continues to rebound.  Rally due to covering or actual new buyers?

 
$INDU Daily: (Dow) Similar rising wedge as above.
 
 
 
$TRAN Daily: (Dow Jones Transportation Avg) Similar rising wedge with a pullback right to the 50% retracement and trendline.
 
 
 
 
$NDX Daily: (NASDAQ) The Nasdaq found resistance at the level mentioned in a previous post (the blue line). 
 
 
 
6E Daily: (Euro) So far, the euro found heavy resistance at the 9/22/2008 high and the cross of a trend line. Careful of support at 1.4449 (50% retracement and previous swing high).
 
 
 
CL Daily: (Crude Oil (Light)) Crude has broken out the bottom of the containing channel with some possible room to fall.  Crude and the Euro seem to trend together recently, so this fits well with the Euro falling.
 
 
 
DBA Daily: (Agriculture) Continues its grind lower, with targets at lows.
 
 
 
ZB Daily: (Bonds) Even as the markets rallied today, the bonds continue their climb, breaking previous highs. 
 
 
 
ZG Weekly: (Gold) So far, has found resistance at the double top set in 3/2008.  Could a continued flow into bonds mean investors moving away from gold? 
 

Market Update

Market Update, 2009.09.21, Addition

20. September 2009
Comments (0)

$NDX Monthly: Since the NQ does not give enough past data, I am taking a look at the $NDX (Nasdaq 100 Index) monthly.  Last week, we reached an important 1734 area.  Be careful of a reaction this upcoming week (a strong pop through or resistance).

Market Update

Market Update, 2009.09.18

18. September 2009
Comments (0)

ES Daily: Have we finally reached the top of the top?  Below is a possible Elliot Wave pattern that shows some great respect of fib levels.  These projections are taken of the small "wave 1" shown below.  Divergence continues on the oscillator as we go up.

 
 
 
ES Daily: As shown in the last post, the last rally stopped right at the 1.618 fib projection (see blue arrow).  Now see next chart...
 
 
 
ES Daily: Using the same technique, the latest rally went right to the 1.618 projection level once again; right at that 4.25 fib projection shown in the first chart above. 

 
 
ES Daily:  If you are a fan of trend lines, they seem to have worked well. 
 
 
 
YM Weekly: Below is a possible Elliot Wave move down.  We are currently right on top of the 50% retracement of "Wave 3" with a potential target.
 
 
 
YM Daily:  Looking closer at the recent daily moves, we are at the 2.0 fib projection of the last pullback (see long, blue arrows).  Intermediate fib projection levels (1.272 and 1.618) line up will with the smaller pullbacks.  Like the ES, there is continued divergence on the oscillator (not shown) with this recent rally.
 
 

$TRAN Weekly:  The Transports have broken the 50% level (measured from the all time high), however, they have not broken the 0.618 level quite yet.  There seems to be a nice trend line which could show some resistance (red line) as well as resistance from the previous low back from Jan 2008 (blue arrow).
 
 
 
$BANK Weekly: The same resistance level mentioned in the last market update continues to be respected. 
 
 
 
ZB Daily: The 30 yr bonds still seems to be struggling with the larger 50% fib retracement.  However, we keep seeing higher lows, the respect of a 50% support level, and a target above.  That 121 area is an important area to watch.  A rise in bonds should follow a sell off in ES/YM.
 
 
 
CL Weekly: Similar to bonds, Light Crude is struggling with a 50% resistance level.  Due to the long, steep fall of crude, the fib retracement is taken from lows to lows.  In this case, the first significant low (low of 8/15/2008) to the major low in Jan 2009.  You can also see a nice trendline giving support and thus causing a wedge to form with that 50% level.  A pop higher next week may be in store.  This would not be good for the ES/YM.
 
 
 
6E Weekly:  The triangle shown in the last market update broke out to the upside.  Some potential near term resistance levels are shown below.  These are the 9/22/2008 high (blue arrow), the 1.5 fib projection of the initial wave up off the first pullback (see red, horizontal line), and simple trend lines.  This makes the 1.4800-1.4850 an area to watch. 
 
 
 
IYM Weekly: (Basic Materials) Coming up on a 50% retracement from the all time high.  The 200 sma is also floating right on this 50% line (not shown).  Resistance?
 
 

ZG Weekly: Gold is double topping with the March high.  Also, there seems to be a nice Inverted Head and Shoulders pattern.  However, this isn't always a bullish sign.  Also, notice we seem to have a bit of divergence in the 3/10 oscillator. 
 
 
 
 
 
Good Hunting Traders!
 
 
 
 
 
 
 

Market Update

Market Update, 2009.09.07

7. September 2009
Comments (0)

Labor day is over and time for volume to return to the market.  Many markets are very close to notable levels.  Will they continue to hold?  Should make for an interesting week! 

ES Daily: As mentioned in a previous post, the current movement is very similar to one that we saw back in June.  Could this be a window into this week?  A pop to 1027 area wouldn't be out of the question, however. 

 
 
NQ Daily:  The NQ has broken down out of the rising wedge and is now testing the bottom of it.  
 
 
 
YM Weekly: The 11/3/2008 high is still holding on the YM.  

 
 

$TRAN Weekly: The transports are still holding the 50% retracement level.
 
 
 
$BANK Weekly: The level mentioned in the last market update is holding. 
 
 
 
ZB Daily: So far the double top in bonds is holding as well as finding support on the 34 volume weighted MA (red MA).  The close below the 21 ema (green MA) is a bearish sign, but the fact that the 21 ema remains above the 34 vwMA, I remain bullish.  Also note, we are also nearing a 50% retracement.
 
 

 
CL Daily: So far, crude found resistance at the 1.272 fib projection of the last move (see blue arrows) and fell below the wedge (red lines).  However, it is also nearing/hitting a 50% retracement, which could be a good spot to rally.  Based on the last pullback, a pullback to 67.44 is to be expected (the area we are in).
 

 
6E Daily: The Euro continues its dance within the channel.  However, the wedge seems to be becoming a symmetrical triangle, so expect a break.
 
 
 
DBB Weekly: (Metals ETF) The 50% level continues to hold.
 
 
 
IYM Weekly: The 50% retracement shown below continues to hold.
 
 
Good hunting traders!
 
 

Market Update

Market Update, 2009.08.30

30. August 2009
Comments (0)

ES Daily - After a solid week of "doji" type behavior, we are left with indecision.  During the beginning of June, we had similar action then a very nice pullback (see arrows on chart below).  We are also in a rising wedge, which also typically signals a breakout.  Logically, since the recent rally over the past couple months was very quick, I would be surprised if we have an even more steep breakout to the upside.  (If we do, I would image it very short lived, with an immediate spike down.) As mentioned in the past, we continue to have nice divergence on the 3/10 oscillator.

 

NQ Daily: Similar action as the ES with the rising wedge, but the "pop" above recent highs wasn't so clean.  There is also nice divergence in the 3/10 as well. 

 
 
YM Weekly: The dow recently hit the highs seen in November of 2008 and has backed off a bit. If we are to head higher, this is a level to watch for.
 

 
 
$TRAN Weekly: The Transports hit the 50% retracement from their all-time high almost exactly.  Resistance?
 
 
$BANK Weekly: Hitting a level to watch...
 
 
 
ZB Daily: The bonds are starting to show some strength.  After a pullback, they seem to be heading higher.  The 21ema (green line) acted as resistance on the way down (left, two arrows) and recently bounced off it as support (right arrow).  Sign of a trend change?  However, we can't ignore the double top it is currently facing.  So we will need to watch this very closely.  Bonds typically rise as people turn to them for safety, so a break to the upside from here could be a sign to watch for a turn in the market.
 
 
 
CL Daily: Oil has continued its march higher.  After bouncing off a 50% retracement in mid-July, it has continued to make measured moves higher.  This past week it broke the recent highs, but quickly found some buyer's remorse.  Will this 73 area continue to act as resistance or will we break higher?  Oil is something to watch, since higher old prices can't be good for the US economy.  Current targets are 80, then 90.  However, if the USD rises, this could put some downward pressure on oil.
 
 

6E Daily - The euro is starting to look heavy and the RSI is showing signs of divergence.  This is bullish for the USD.  Currently, the Dollar Sentiment Index shows only 3% bulls.  That's the kind of extreme that can't be sustained.
 
 
 
DBB Weekly: (Metals ETF) If the USD is to rise, it means that metals and commodities are to fall.  Currently, the metals are reaching a 50% retracement from a notable swing high.  If the metals were to fall, this would be an appropriate place.
 
 
IYM Weekly: (Basic Materials) Similarly to above, IYM is at a level to watch. This sector is sensitive to changes in the business cycle, thus depends on a strong economy.  If our economy turns weak, look for IYM to follow.
 
 
 
 

Market Update

Weekend Update, 2009.08.22

22. August 2009
Comments (0)

Another week of rallying on Wall Street.  Definite move higher?  Maybe not.  Let's take a look at some major indexes and see how bullish things really look.

ES Daily:  While it is true the ES moved higher, we went right to the 1.272 fib projection (to the tick) on Friday.  Also, the 3/10 Oscillator is showing divergence with this new high as well as a move below the zero line and a possible retest of the zero from the bottom.  (The YM made a very similar movement)

 
NQ Daily and $TRAN Daily: Some consider the NASDAQ as the leader of the market.  Others consider the Transports ($TRAN) the leader.  In both cases, they failed to make a new high and instead made a double/triple top (depending how you look at it).  Both with similar 3/10 Oscillator divergence.
 
 
 
 
$BANK Daily:  Another possible leader of the market is the NASDAQ Banking index ($BANK).  In its case, it didn't make a new high at all and instead made a lower high.
 
 
 
More to come...
 
 
 
 

Market Update

Market Update, 2009.08.18 (UUP)

18. August 2009
Comments (0)

UUP Daily: (Bullish Dollar Index) Prompted by reading some articles about how Robert Prechter (Elliot Wave guru) is becoming bullish on the dollar (when everyone else seems to be bearish), below are a few charts.

Wave 3 came in exactly at the 1.272 fib projection of Wave 1.  Wave 4 was exactly 0.786 of Wave 1 (which is also a 0.382 retracement of Wave 2).  Sometimes when Wave 2 is "complicated and larger" it implies that Wave 4 will be "simple and smaller".  This is exactly what we are seeing here.  As we hit new lows for Wave 5, we saw divergence on the 3/10 Oscillator (red lines). This implies the down move may be ending.

 
 
Wave 5 was very close to the 1.272 fib projection of Wave 3.  The AGET Osc (5,35) also showed divergence. as Wave 5 came in.  Is is also very obvious that the Wave 5 movement has lost a lot of the momentum it had when putting in Wave 3 due to the angle and speed of the downward movement.  This implies the bears are losing steam.
 
 
 
Based on the charts above, this would imply a rally from here. So far, we had a pop off lows and a 50% retracement, which is now nearing the near-term target.  However, a further rise to 24.80+ may not be out of the question.
 
 
 
 

Market Update

Market Update, 2009.08.17 (ES Daily)

17. August 2009
Comments (0)

ES Daily: Beautiful chart!  Huge sell off so far today.  Looking back at a post from a little over a week ago, the 1.618 level held nicely.  We also see the 0.618 matches up well with the past swing low. Is this a start of a new trend or merely a pullback to go higher.  I'm going to look at the speed in which this sell off happens to give some signs.

 
 
ES 120 min: Also, Looking at the intra day movement (as of this writing), today's low worked out perfectly to the 1.272 fib projection, as shown below. 
 
 
 
 
 

Market Update

Market Update, 2009.08.16 (ES Daily)

16. August 2009
Comments (0)

ES Daily - Not counting fibonacci retracements, extensions, and projections mentioned in past posts, we have a "Adam & Eve Double Top" on the ES daily.  The red arrow indicates a past HIGH that is causing resistance ("Adam").  The blue arrow indicates a past CLOSE that is causing resistance.  Closes are important since some traders only focus on the daily close when making their longer-term trades.  These levels seem to be causing a rounded top in our current price action (black arrow, "Eve").  Could this be another sign of a change in trend?  Or, is this a bull flag before a pop higher?

 
 
 
 
 

Market Update

Market Update, 2009.08.13 (YM Weekly)

13. August 2009
Comments (0)

YM Weekly: Using similar techniques mentioned in the last post on the NQ, below is a chart with many of the lines thrown on there at once.  It's okay that the numbers can't be read.  This is just exercise is meant to show where these lines seem to cluster and offer confluence.  As the arrow indicates, we are at one of those areas (approximately 5 overlapping lines between 9408 and 9527).  

If this area doesn't hold, the next possible stop could be 10200's to 10400's (the next cluster higher).

 
 
 
 
 
 
 

Market Update

Market Update, 2009.08.13 (NQ Weekly)

13. August 2009
Comments (0)

NQ Weekly: I wanted to share a few charts of the NQ and how we are currently hitting (or very close to hitting) at least 4 overlapping levels in this area.

Below shows the Elliot Wave pattern and some current fibonacci projections.  You can see that the right, blue arrow is 127.2% of the left blue arrow. 

 
 
Comparing the previous wave in the same direction (Wave 2), we see that the current wave 4 is hitting the 161.8% fib projection.  We also see that the other fib levels seemed to act well as support and resistance. 
 
 
 
Taking a measurement of the entire move, we are currently hitting the 50% retracement level.  The other fib levels also line up well with past pivots. 
 
 
 
Taking a measurement of just Wave 2, we see similar levels.  All of this amounts of confluence of resistance in this area.
 
 
 
 

Market Update

Market Update, 2009.08.07

7. August 2009
Comments (0)

ES 60 min:  I've been tracking a rising wedge this past week and I kept seeing it retest the bottom of the wedge.  Today it seemed to all come together at the peak, right at a fib extension line (2.786).  The fib extensions are taken from a measurement of the little blue arrow. It seems we have also closed right at support (1006).  

  

ES Daily:  Looking at the daily, if we take an extension of the recent pullback, we see we hit the 1.618 fib extension right at this 1015 area as well.

 
 
ES Weekly: Taking a look at a weekly ES chart (Oct 2007 highs to today) and how all the fib levels seem to line up so nicely with price action.  There are some levels on there that may seem unfamiliar. Here is how I came up with a few obscure ones.
  • 0.214 = 1.0 - 0.786
  • 0.107 = 0.214 / 2
  • 0.893 = 1.0 - 0.107 
As you can see, we are right at that 50% level!
 
 
 
ES Weekly: Same chart, but taking the fib measurement of the entire move (instead of the pivot at 1374.50 (8/13/2007)).  This shows the current price right at the 0.382 level (1017.50).  Either way you look at it, we are at a resistance level.
 
 
 
 

Market Update

Market Update, 2009.07.28 - SPY Monthly

28. July 2009
Comments (0)

SPY Monthly: The SPY is reaching a 50% retracement from the levels indicated below.  When I do a retracement such as this, I like to see the fib levels line up with previous pivots/movement (see blue arrows).  This helps validate the importance of this set of fib levels.  The reason is some traders may not be looking at fib levels at all, but instead only look at pivot levels, so that helps add additional traders looking at the same level, making it more important, thus more of a reaction. 

Unfortunately, the SPY isn't looking quite as nice as the QQQQ.  However, I think of the NASDAQ as leading the S&P so, perhaps this is okay. 

Market Update

Market Update, 2009.07.28 - QQQQ Weekly

28. July 2009
Comments (0)

QQQQ Weekly: Lots of lines, but they point to a possible ceiling very near in the Q's.

Market Update

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