9 replies to this topic

[IndexTrader]

As I mentioned in a post 2 days ago, we broke support in the low 1360s basis ES. Then, we took out the hourly trendline around 1359. I also mentioned we had gotten somewhat oversold hourly, and that resistance was around that 1360-1365.

http://www.traders-t...showtopic=87037

Take a look at the attached chart. What you see is that yesterday's rally simply came back to test the underside of that broken trendline, into the resistance. The chart worked about as well as it could work.

Today, we are flopping around the 50 day average, and the 20 day average. If there was ever a spot to hold, this would be it. Like I said in my post a couple of days ago, I think the rally is over. Ultimately, I don't think this area will hold. We are currently trading just above the gap from early April. A gap fill would not be a surprise here. Sometimes though, what they do is to edge down into the gap, then reverse. We'll see how it unfolds.

A while back I mentioned earnings season. Today was an example. I'm not expecting anything good, nor any particularly good commentary in the conference calls. The exception may be the oil and oil related...but that won't suprise anyone. So what this market will have to do is to take some of that negativity and rally on it. Perhaps we can do that. But right now all I see is a chart heading lower, and a market NOT ignoring negative news.

As I said a couple of days ago, I think the rally is over. But I'm willing to change my mind if we firm up, start ignoring some of this news. The first chance is right about here, or just below 1340.

IT

[saltlake]

Nice Call Index I really thought 1350 ES would hold(it bounced there two days in a row). I still think if they can close them above that level the rally is intact.

[IndexTrader]

Nice Call Index I really thought 1350 ES would hold(it bounced there two days in a row). I still think if they can close them above that level the rally is intact.

If nothing else, that would be a very nice start. Especially if it held right here...those moving averages would start to get some credence. I'd like to see that type of rally close above 1355.

IT

[NAV]

Is the rally over ? Personally, i don't think it is over, for the reasons i posted in my thread below. Until we break the pattern of higher lows on the daily charts, it's an uptrend. We could have made the same case on 3/26 (trendline break and failed backkiss) and called the rally over. But it held above the prior swing lows.

[IndexTrader]

Is the rally over ? Personally, i don't think it is over, for the reasons i posted in my thread below. Until we break the pattern of higher lows on the daily charts, it's an uptrend. We could have made the same case on 3/26 (trendline break and failed backkiss) and called the rally over. But it held above the prior swing lows.

I think you make a valid point. However, what I don't like about waiting for that 1315 low (on the ES), is that it would be very risky to sell there. In fact, you probably would be waiting for a rally then to sell on would be my guess. Entering yesterday allowed a close stop in case the backkiss failed. If this market now turned and ran on the upside, you're in a position to close out with a profit. Same thing was true back on 3/26. As it turned out, we had another rally ahead of us...but the entry allowed you to get out without loss even after the gap-up, if you were still short. What I'm saying is that I like the strategy better than waiting for that low to be violated. Certainly nothing wrong with waiting though.

IT

[arbman]

I agree NAV, I see the same, the volatility is hard to understood here, but ultimately it is a higher low as long as 3/31 holds. It will obviously consolidate here for at least a day, but probably for 2 days and go higher. The highs will be made during the opex, I expect a low on May 7-10, maybe a lower low than 1260s for the year. I don't think the game is over for ST, it could be nearly over for IT, it will be a sideways trend anyway, not a new bull market to new highs, imho. But sideways to neutral is the best you will get from a guy with 'arb' in his nickname!

[swingtrader]

Is the rally over ? Personally, i don't think it is over, for the reasons i posted in my thread below. Until we break the pattern of higher lows on the daily charts, it's an uptrend. We could have made the same case on 3/26 (trendline break and failed backkiss) and called the rally over. But it held above the prior swing lows.

I think you make a valid point. However, what I don't like about waiting for that 1315 low (on the ES), is that it would be very risky to sell there. In fact, you probably would be waiting for a rally then to sell on would be my guess. Entering yesterday allowed a close stop in case the backkiss failed. If this market now turned and ran on the upside, you're in a position to close out with a profit. Same thing was true back on 3/26. As it turned out, we had another rally ahead of us...but the entry allowed you to get out without loss even after the gap-up, if you were still short. What I'm saying is that I like the strategy better than waiting for that low to be violated. Certainly nothing wrong with waiting though.

IT

very nicely explained. Thanks IndexTrader!

[IndexTrader]

It will obviously consolidate here for at least a day, but probably for 2 days and go higher.

So far I'm not seeing the "consolidation". NDX down 35 from the opening. YM down over 100 from the opening. Looks like a market just grinding lower...so far.

IT

[arbman]

So far I'm not seeing the "consolidation"

Today is not a consolidation, the next 2 days after today will probably be though. I didn't say a consolidation for today, let me correct it.

Plan the trade, trade the plan.

If the market makes 80 point swing but doesn't take the lows, it is distribution into the rally, but still a consolidation as long as it manages to put in a higher low and rallies to a higher high. The odds though favor a lower high next, if the market sells off further.

(edit: sorry for multiple typo)

Edited by arbman, 11 April 2008 - 01:31 PM.

[Insider]

Is the rally over ? Yes 1163 is a BIG magnet.... Insider

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Edited by Insider, 11 April 2008 - 02:32 PM.