Monday will determine Trend for Rest of 2008

One of the trend indicators I use is a very simple candle count. (5 Red or Green in Succession to establish or confirm a trend) On Monday the SPX must close OVER 1330.63 to keep the long monthly uptrend still intact. Declining volume and price over the last 3 sessions lead me to believe there could be an all-out assault to keep this trend from turning down... I closed 1/2 of my short position on Friday in anticipation of such a development. I would expect the operators to drive prices even further down on the open on Monday to try and be sure that all the sellers are washed out before they make their move. 1331 is not that far away, so the bar is set pretty low for the bulls to salvage a hollow victory out of their current predicament...

Edited by SemiBizz, 29 March 2008 - 01:35 PM.

Does this mean I should sell my position in the soup line?

Does this mean I should sell my position in the soup line?

you might as well hand it in with the fed as collateral at the discount window.
soup line entitlements are investment grade, innit?!

Here's the Nasdaq... once again, bar is set pretty low 2271.48 is the number to beat, only 10 pts away from Friday's close... Some of the volume data is missing, but notice that the last time the trend had a chance to turn down was August 2006 and it failed to do it.... So therefore, Monday is not just another trading day, it's the entire ball game !

Edited by SemiBizz, 29 March 2008 - 01:38 PM.

One of the trend indicators I use is a very simple candle count. On Monday the SPX must close OVER 1330.63 to keep the long monthly uptrend still intact. Declining volume and price over the last 3 sessions lead me to believe there could be an all-out assault to keep this trend from turning down... I closed 1/2 of my short position on Friday in anticipation of such a development. I would expect the operators to drive prices even further down on the open on Monday to try and be sure that all the sellers are washed out before they make their move. 1331 is not that far away, so the bar is set pretty low for the bulls to salvage a hollow victory out of their current predicament...

Perhaps the opposite could happen, early morning spike to clean out the shorts. I think it will be fascinating to watch.

Yes Monday may be significant, any drop of 240 points plus I think may be worth buying. Rick

Now let's look at those two charts from a volume perspective to understand the relative strength. On Monday Nasdaq will need to do 2.5B or better to break the previous candle volume. That is not a done deal... on the other hand when you look at SPX, it has crushed the February volume... So SPX is going down on QUALITY of volume, while NAS, much closer to a green candle than SPX is not quite getting to par with the February candle volume....

Which says to me is to look for strength from a sold-out Nasdaq and further declines in the commodity, retail and banking sectors...

Edited by SemiBizz, 29 March 2008 - 02:02 PM.

Semi=Well, good news for me then, all I'm holding is commodity related puts. I figuire they present the least risk of going up on any market pop (in fact, they may HAVE to kill them to get the market to pop)-and if the market keeps dumping, I feel they will too. As I don't believe in huge drawdowns, I haven't played the long side in a while-was never much for swimming against the current. I think if they truly want to close that monthly above, they probably have to trash the market early to invite shorts in-so they can run one of those "redicusqueezes". And then, of course, they have another gap down doji to deal with there.

Now let's look at those two charts from a volume perspective to understand the relative strength. On Monday Nasdaq will need to do 2.5B or better to break the previous candle volume. That is not a done deal... on the other hand when you look at SPX, it has crushed the February volume... So SPX is going down on QUALITY of volume, while NAS, much closer to a green candle than SPX is not quite getting to par with the February candle volume....

Which says to me is to look for strength from a sold-out Nasdaq and further declines in the commodity, retail and banking sectors...

Think you have a point about the NAS, but it still has the burden of that 2000 high which will be an issue for a long time. I know stock picking is a pain in the neck, but it could provide some great returns.

Still, the 5th candle would be bearish unless there was a huge rally up. A lower low candle even with a higher close than the open would not be considered a reversal unless it closes higher than the previous high candle. So I would not get too excited about that. Window dressing is all that can be assumed so far. I think a green light for the bulls can be had as soon as we trade higher than last months candle high. And even that green light may be tentative.