6 replies to this topic

[thoughtpwr]

We didn't get to 250k on jobs and therefore not high enough to make a direct assault on 240 this AM, I think we needed +12-14 SPX points and only got 10 (which is by itself key to putting in a bottom).  This first move up was 2.28 SPY points, which projects to a 3.5 multiplier of the delta getting us to 243.7 on this move probably lasting until 4/7. That's putting the possibilities or cart before the horse.

 

We got support at 237.4 early, but since have lost that and have gone down to nearly fill the gap.  Market has struggled to stay above that level (breakeven for day). If we go below that, we will probably make some weak attempts at testing yesterday's low, and may stall the move until Tues of next week.  However, if we stay above it, we should finish at least to the opening level of 238, which will be a victory.  Anything more today is gravy. 

 

WDC is interesting in that the formation is one which I believe projects to 89 or higher and in short order. I think we get above 77 in the next several days and will at least achieve the old high at 81 by 4/7.

 

T also looks like it can breakout to new highs after a 3 mo consolidation.  Breakout P&F Tgts are to 50.

[thoughtpwr]

At this point we are trying to get the 8 MOV to cross above the 20 MOV on the hourly and 2 hr charts. It's a day or so off on the 2 hr and could happen today, if we stay above 237 (~ 8  MOV is) and finish above 237.4 (20 MOV; awfully familiar numbers). Key is stay above 237, its that simple. We should see buying coming in on the last 1/2 hr from buy on close trade.

[thoughtpwr]

With regard to the market and the MOVs, a good analogy as to what to expect over the next six days is to look at the SPY between 2/1 & 2/8, with 2/1 being what is happening in the market today, Fri 3/10.  It does appear to be following that pattern to a tee.  Key difference may be if we finish stronger at the close today.  We should get to 240 next week some time, like Tues, Wed, Thurs AM,  before we sell off in a minor manor and go strong into the following 3 weeks.

[thoughtpwr]

1 hr 8 & 20 MOVs have crossed, the 2 hr will probably not cross until we are at 240, so I don't think you wait on that.  Last entry point before 240 was at SPY 236.75 at 1 PM EST and is probably on the open on Mon if we are down. It will depend upon how high we close today.  We could go as low as the today's lows.  Entries late next week may be nearly as good (especially for put spreads), when we sell off from the Fed mtg and expiration, whether it's Thurs or Fri of next week.  From there we should be strong into 4/7.  After that, we probably have another sell off like we had this last week (perhaps during second week of April; prior to expiration), for which you clearly do not want to be holding long.  You also want to be more patient to let that sell off get to the bottom of the channel before entry.  We had no channel on this one, where the channel slope was slated to change. I got in too early in several circumstances and had to bear the burden the last several days including today. All should be cured by action next week at the 240 highs, which I think are only nominally exceeded. 

 

As for channel, I think one connecting the lows of 2/17 through yesterday's low along the bottom and a parallel line touching the first 240 high is where we are headed over the next 1-2 months. It is a slower slope than previously, but will make progress to 243.7 in the near term (probably 2500 little longer term).  This next couple months may be best used with put and limited call spreads initiated at the lows (or highs for calls).  Some stocks will go fast, but the over all market will go slower than the last two months.

 

Once we have executed three waves up (first of a-b-c up then hard down to bottom of channel, the third being 5 waves) , we should then prepare for our first serious sell off with the a-b producing a simple double top and c down.

Edited by thoughtpwr, 10 March 2017 - 03:26 PM.

[thoughtpwr]

If we open lower on Mon, be on lookout for the trendline from today's high in AM to today's late day high, to become the cap for Mon's action suppressing gains until Tues AM gap up that takes us to 240.  The Buy on Close for Expiration trade doesn't exit until the first profitable opening.

 

I wonder if the large number of gaps up necessary to make progress is a result of the number of bears fighting these moves and the only way you get higher is to force the bear's to get trapped and cover?  We certainly have trouble grinding higher in all circumstances.

Edited by thoughtpwr, 10 March 2017 - 03:55 PM.

[thoughtpwr]

I am sorry, I got the potential suppressing trendline on Mon wrong.  It would be the high point on Fri AM connected to the high point on a Mon rally from a down open on Monday. That jives with the analog I referenced above.  Obviously if we rally above 238.02, it doesn't matter, there cannot be any suppression.

[thoughtpwr]

$NYMO got out of the BB today, but is still sitting at -62.  Monday if suppressed with a lower open will probably have $NYMO finish negative lower before we rally next week.

 

The $CPCI & $CPCE are back to the middle neutral readings. Implying a suppression will be a buying opportunity where as a really will be into a high.