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30 Oct Mixed Signals, but the benefit of doubt goes to the bulls

Posted by tradingpoints.net, Oct 30 2008, 08:28 AM

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Yesterday’s last half hour sell off, triggered Low Range Close and Low Continuation Signals for the Dow and the $BKX banking index and the S&P 500 cash index $SPX today. But throughout the Globex session, there has been nothing but buyers. The S&P, Dow and Nasdaq futures all registered NR4 trading days, meaning yesterday’s price action was the narrowest trading day in the last four sessions. Actually the Nasdaq futures registered an NR7 day, which was the narrowest trading day in the last seven sessions. Normally trading above yesterday’s high or low would indicate that the trend should follow for the balance of the day in the direction of the breakout.

Today’s daily pivot is 937.50 on the S&P futures. Continued price action above the pivot is bullish. The ability to generate an hourly close above 973 argues for a continued advance to 985 and 1003. Critical support is at 907. An hourly close beneath 892 will argue for new lows. Can’t get much more mixed signals than that.



Comments

  beta, Oct 30 2008, 11:28 AM

Good analysis -- thanks. FWIW, I think we drop to at least SPX 880. Would this (880) bring into play lower targets, in your framework ?

  tradingpoints.net, Oct 30 2008, 11:34 AM

Hi,
In my work if we lose 892 futures, it would be a very bearish event and we should be on track for new lows. If we continue to trade under 929 on the futures the 1.272 price extension is 905 and losing that level if things get rocking and rolling to the downside is 887, just on the 15 minute charts. However continued price action above 941, could really spark an advance, as we would have had a pattern failure to the downside and typically fast moves in the opposing direction come from failed patterns. Did I mention I was conflicted today?




QUOTE (beta @ Oct 30 2008, 11:28 AM)
Good analysis -- thanks. FWIW, I think we drop to at least SPX 880. Would this (880) bring into play lower targets, in your framework ?

  beta, Oct 30 2008, 03:31 PM

QUOTE (tradingpoints.net @ Oct 30 2008, 09:34 AM)
Hi,
In my work if we lose 892 futures, it would be a very bearish event and we should be on track for new lows. If we continue to trade under 929 on the futures the 1.272 price extension is 905 and losing that level if things get rocking and rolling to the downside is 887, just on the 15 minute charts. However continued price action above 941, could really spark an advance, as we would have had a pattern failure to the downside and typically fast moves in the opposing direction come from failed patterns. Did I mention I was conflicted today?




QUOTE (beta @ Oct 30 2008, 11:28 AM)
Good analysis -- thanks. FWIW, I think we drop to at least SPX 880. Would this (880) bring into play lower targets, in your framework ?



I know what you mean -- very choppy, low-volume affair today. Based on today's action, Im now thinking that SPX 900 may seal the downside (esp. coming on a Friday, which tend to be countertrend). If 900 holds, then it's more likely imo that we go up to test the SPX 1000-1050 range, before continuing on the downside. The move up from SPX 845 has a five-wave structure so far, which may be "C" of 4. Teaparty posted a great chart today on TT forum showing this count.


 
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