5 replies to this topic

[thoughtpwr]

Well, we got an upside gap and we managed to get over 237.5, which hints at a bottom based upon the potential bottom formation of yesterday. If you blank out the last hour of yesterday, the formation looks quite good as I would have expected it.

 

Overnight SPY looks like an inverted H&S formation developed; which is also encouraging. The support this morning occurred at the down trendline that was identified from yesterdays formation. 

 

I will be satisfied the bottom is in when we use 237.43-.50 as support as well as getting the 15 min &  30 min charts' 8 & 20 MOVs to positively cross over.  Although that didn't stop me from adding a CSCO April 7th 34/33 put spread this AM.  If this is the bottom, the next top is slated for 4/7 per Harley.

 

So far this morning we appear to be trying to move through the down trending MOVs, while struggling to get through 237.43-.50.

 

URA looks like it has bottomed as it is over 16 at this point. I expect it to struggle with the over head downward MOVs as well, until it can get back over 17.25.  I will try to get a 16/15 put spread in place as it consolidates for March and then adding an April later.

Edited by thoughtpwr, 08 March 2017 - 11:06 AM.

[Iblayz]

No bottom yet although it can appear that way for hours.

[thoughtpwr]

I agree, I think the best the bulls can hope for today is to stay flat on the day and finish at 237.4 by the close. Then, gap higher to the 2 hr 20 MOV and sell off where 237.43 is support. This kind of action would get the MOVs in a position to get back to the highs. I could see a test of 270 in the cards yet today.

 

I still like the fact that $NYMO finished outside the BB and that, at worst, keeps things flat into a rise by Friday.  I know that doesn't play to the thought that we will be weak into the Fed mtg a week from now.

[thoughtpwr]

We got the test of 270 again for the 5th time and held. The market has rallied back to 237.5, which is an excellent sign, but its still not quite over. My take on the wave structure is that this morning early we got wave 1 and the sell off was wave 2.  I think we are in the process of 1-2, 1-2 of wave 3.  The first move this morning projects getting back to the 240 high, so that fits as well. We are going to see a sell off from these levels, and IF we can hold to the 38% retracement or even the 50% retracement from the wave 2 bottom; then I think we can rally above 237.5 this PM and settle in above 237.43 at the close.  Let's see if that can come to pass.  If so, I think the count is correct and we are on our way to 240 again.  I think this happens before the Fed mtg and we sell off into the fed mtg from the high and rally after the Fed mtg. 

Edited by thoughtpwr, 08 March 2017 - 01:32 PM.

[thoughtpwr]

Well we obviously went lower as we couldn't hold the 38% or 50% retracements that would have locked in a bottom. Then it just got worse.  I am surprised a bit as other stocks didn't really get hit like the SPY.  Clearly, we are making lower lows and we have met resistance at 237.43-.50 for the sixth time in the last two days.  The third and sixth time were met with the heaviest selling sequences.

 

3/8 clearly has the opportunity to be the low that was promised as its the 5th day down in a row and finished on the lows.  With all the short term MOVs pointing down, this scenario is not going to be solved for the bullish case with grinding higher.  Instead, we probably require a 1.0 SPY point gap up day, which will not happen tomorrow. We may gap up a small amount, but it will likely be an small inside day up that is required to turn this thing around on Thurs. Then a gap higher on Fri to turn the MOVs around. Clearly, the bearish case is easier, let what's been happening the last three days continue until the pent up energy of the last four days is unleased with a major move down. That is the logical choice, but markets are not logical and that is why we have problems with them.

 

On the $NYMO, we had the third straight move outside the BB to -80.  This is clearly a big downside number and the lowest reading we have had in over a year. The rubber band is being stretched to the limit. The last time it was this low was 12/15/15 two weeks before the $NYMO went to the other BB and topped at the 12/29/15 high; where up we went down 10%.  The difference was the vix was high not down at 11.82 with today's small rise.

 

I want to see if $CPCI & $CPCE made significant moves to the upside today or not, but those numbers aren't out yet.

[thoughtpwr]

$CPCI is close to being a buy opportunity at 1.18.  Perhaps tomorrow it can get to 1.30-1.4 and set for the bounce.  If we have a small inside day tomorrow, the bears probably add to their total and get the fuel in place.

 

$CPCE is middle of the range, so it isn't offering any help.