While gold and currencies remain great scalping instruments, there haven’t really been many developments longer term picture wise.
break above higlighted resistance level would like take DX to the top of the big channel on daily, break below higlighted support would make new yearly low for a likely trip to the bottom of the same channel:
red line - 50ema daily is expected to act as resistance on its 3rd test, with big test of two recent highs at major s/r level and the top of the channel. On break above 50ema, highs and the channel I will be expecting a trip to 200ema daily and at least 38% retracement of the dollar down move.
Chart is pretty self explanatory.
this market refuses to pullback for more than few hours with bullish sentiment and various market internals continue to set record highs, all that is rather irrelevand since only price pays and we (traders) have to make the most of intraday opportunities since only price pays.
Firstly, lets take a look at weekly charts:
ES weekly has put in a doji near the top of the wedge, suggesting some market indecision last week. This coming up pre-holiday week might be very similar considering it will be last week of summer and pre Labor day weekend week.
Another week of chop would make sense, considering above mentioned factors and similarity of June topping formation so far:
Above the wedge and 1044 swing high (blue arrow) there is a really thin zone going all the way up to 50% retracement of the whole bear market and possibly the top of the channel (weekly chart).
~1015 - previous breakout area, last week’s low and over the next few also supported by a trendline.
~ 1007s - 50% retracement from monthly low
If bears muster up more than 20 pts of downside I will bother posting more levels, for the past little while it has been a waste of time :)
Will be posting key intarday levels via twitter @esecfutures and here.
Good luck and good trading to all
no technical developments today, choppy boring day, support levels remain the same as yesterday, see previous post.
As far as intraday levels and interntanls will be posting them in the chat as well as twitter @esecfutures
this market clearly has no resistance for past several monhts, so won’t guess near the highs. Here are key support levels I see on the way down:
Will post intraday technical and itnernals via twitter @esecfutures as well as key charts right here on the blog
1016 - previous 2 wek highs and break out area, 3 day retracement
1006 - 50% retracement from 3 week low, also trendline from old wedge
Will update on key levels in the morning shall new technical developments take place
Left is monthly, right is daily.
Now here is a zoom out view of the two, firstly 40yr old channel from previous weekly updates:
and sp500 daily:
Will keep watching key levels closely to start building bearish case, first ES support level at 1016.
Will post key short term levels in daily updates sometime tonight
After once-in-a-decade July lift off and continued momentum push through August, capped off by last week’s opex shakeout with a push to new highs, markets are now in the ignore zone, where good/bad news, earnings, currency events simply do not matter in the face of momentum and performance chasing funds.
For a month now market sentiment is at multi year highs and internals point to levels not seen in a veyr long time, namely stocks above 200 day moving average:
Lets zoom out several dozen years and see where we are in the big picture:
The backtest of the channel lines up right with October 2008 high (not that this high is a critical level, but bears are grasping for straws as far as resistance levels here) with the wedge resistance right below:
If bears to decide to put together a pullback of more than 2% off of yearly highs, here are the support levels to watch:
The chart is pretty self explanatory.
The top of the range is laminated with 50ema and channel right above, on break of both could see a bigger move up as dollar related sentiment is also EXTREMELY bearish and trade seems to be overcrowded.
Will post smaller time frame s/r levels for ES in the morning and as always will keep posting intraday market technicals & internals updates via my Twitter account @esecfutures
Good luck and good trading to all
next week is the last week of summer, which means we are likely in for some low volume choppy action.
By Bob Prechter
The following is an excerpt from Robert Prechter’s Elliott Wave Theorist. Elliott Wave International is currently offering Bob’s recent Elliott Wave Theorist, free.
On February 23, EWT called for the S&P to bottom in the 600s and then begin a sharp rally, the biggest since the 2007 high. The S&P bottomed at 667 on March 6. Then the stock market and commodities went almost straight up for three months as the dollar fell.
On March 18, Treasury bonds had their biggest up day ever, thanks to the Fed’s initiating its T-bond buying program. The next day, EWT reiterated our bearish stance on Treasury bonds. T-bond futures declined relentlessly from the previous day’s high at 130-15 to a low of 111-21 on June 11.
That’s when there were indications of impending trend changes. The June 11 issue called for interim tops in stocks, metals and oil and a temporary bottom in the dollar. The Dow topped that day and fell nearly 800 points; silver reversed and fell from $16 to $12.45; gold slid about $90; and oil, which had just doubled, reversed and fell from $73.38 to $58.32. The dollar simultaneously rallied and traced out a triangle for wave 4. Bonds bounced as well. As far as I can tell, our scenarios at all degrees are all on track.
Corrective patterns can be complex, so we should hesitate to be too specific about the shape this bear market rally will take. But from lows on July 8 (intraday) and 10 (close), the stock market may have begun the second phase of advance that will fulfill our ideal scenario for a three-wave (up-down-up) rally. In concert with rising stocks, bonds have started another declining wave, and the dollar appears to have turned down in wave 5 (see chart in the June issue), heading toward its final low. Although commodities should bounce, their wave patterns suggest that many key commodities will fail to make new highs this year in this second and final phase of partial recovery in the overall financial markets.
Meanwhile, our forecast for a change in people’s attitudes to a less pessimistic outlook is proceeding apace. Here are some of the reports evidencing this change:
More than 90 percent of economists predict the recession will end this year. [The] vast majority pick 3rd quarter as the time. (AP, 5/27)
Manufacturing and housing reports this week may offer signs that the recession-stricken U.S. economy is within months of hitting bottom, economists said. (USA, 6/15)
Fewer people say they’ve prospered over the past year than in decades, a USA TODAY/Gallup Poll finds. Over the past two months, however, expectations for the future have brightened significantly amid rising optimism about a stock market rebound and economic turnaround. “I think the administration is going in the right direction,” says… Now 36% of those surveyed in the Gallup-Healthways well-being poll say the economy is getting better. That’s not exactly head-over-heels exuberance, but it is double the number who felt that way at the beginning of the year and a notable spike in the nation’s frame of mind. Thirty-three percent say they’re satisfied with the way things are going in the United States; in January, just 13% did. (USA, 6/23/09)
If only to confirm the socionomic causality at work, an economist quoted in the article above muses, “The one anomaly in the puzzle is that people shouldn’t be feeling better because the jobs market is so terrible and unemployment is likely to keep rising.” Of course it would be an anomaly, and people should not feel better, if mood were exogenously caused. But it is endogenously regulated, and it precedes social actions, which produce events such as job creation and elimination. That people feel better is evident in our rising sociometer, the stock market. If the rally continues, economists will soon agree that the Fed’s “quantitative easing” and Congress’ massive spending are “working.” Those predicting more inflation and hyperinflation will have the last seeming confirmation of their opinions. Then, a few months from now, some economists will probably express similar puzzlement when the stock market starts plummeting again despite the fact that the economy has improved.
But all of these considerations are temporary. Conditions are relative, and behind the scenes, the depression has been, and still is, grinding away.
For more information, download the FREE 10-page issue of Bob Prechter’s recent Elliott Wave Theorist. It challenges current recovery hype with hard facts, independent analysis, and insightful charts. You’ll find out why the worst is NOT over and what you can do to safeguard your financial future.
http://twitpic.com/epmps $SPX zoom out time ~1050 - backtest of 40 yr old channel, 1120 - 50% retracement of whole bear market $$
(while sentiment and BS remain at record levels, technically, after new highs there aren’t many reasons as to why SP500 wouldnt reach those levels)