bullish spring?

semibiz, do you see what i see

Yep... Now what do you think is going on here? See, Nasdaq stopped short of 2506.. .50R. But, SPX and DJIA tested their .50Rs and pulled back... So, in my book that's not harmonic. Now going into April, it was obvious Nasdaq was the strongest, because it failed turn it's monthly candle trend down. Now interestingly enough, the daily still points down on the Nasdaq. On the SPX it's just the opposite, Monthly points DOWN, daily has turned UP. Below is the ES futures chart. Nothing got resolved on the run to 1385 on Friday, now besides the volume we saw there in the futures contract, the 1385 is where April closed. It looks to me like that test is complete, and the volume is back up there at 1397-1401 area. My experience is that these important fib retracement points can be tested over and over before a resolution. So I guess my take is that 1385 is the dividing line here, if we get sucked down inside the April candle, we could fall pretty far... On the other hand, I can see reasons to test higher here on a volume basis. I'd have to see some pretty strong volume now under 1385 to be convinced this has any real legs to the downside. I guess I'd have to give the edge to Nasdaq testing that .50R mark to bring things into harmony with the 1416 SPX .50R pivot retested. You know what bothers me though, is it feels like February again, when we had good momentum off the January lows, and we just stalled out. I"m thinking this... we will get a retracement on that oil price, if the market cannot rally off that and just keeps moving down, then it's not oil that's ailing it and another shoe will be dropping toward the turn of the month...

Now to be more specific as the the QQQQ, I have highlighted one of the breakdown candles(1/4/08)... low of 48.21... as you can see we had quite a bit more volume going down there than we do going up here. I'd say it's a borderline red flag here, as Friday we close on that low, and we violated and closed under it on Wednesday, in fact that was a pretty bearish picture painted on Wednesday, but on relatively light volume (WWW antics). I guess the first sign of trouble comes if we continue lower and test that Wed. low...47.87, if we break that on any kind of volume then we should test the next higher volume low in the January sequence at 47.43. So, overall, the volume is light enough, the options operators could move this thing at will by buying or selling a few horsemen at the strategic moment... If it continues to move higher on this relative vapor, your resistance is 50.31. Should have trouble there (July, weekly chart)

Yep... Now what do you think is going on here? See, Nasdaq stopped short of 2506.. .50R. But, SPX and DJIA tested their .50Rs and pulled back... So, in my book that's not harmonic. Now going into April, it was obvious Nasdaq was the strongest, because it failed turn it's monthly candle trend down. Now interestingly enough, the daily still points down on the Nasdaq. On the SPX it's just the opposite, Monthly points DOWN, daily has turned UP.

Below is the ES futures chart. Nothing got resolved on the run to 1385 on Friday, now besides the volume we saw there in the futures contract, the 1385 is where April closed. It looks to me like that test is complete, and the volume is back up there at 1397-1401 area. My experience is that these important fib retracement points can be tested over and over before a resolution. So I guess my take is that 1385 is the dividing line here, if we get sucked down inside the April candle, we could fall pretty far... On the other hand, I can see reasons to test higher here on a volume basis. I'd have to see some pretty strong volume now under 1385 to be convinced this has any real legs to the downside.

I guess I'd have to give the edge to Nasdaq testing that .50R mark to bring things into harmony with the 1416 SPX .50R pivot retested.

You know what bothers me though, is it feels like February again, when we had good momentum off the January lows, and we just stalled out. I"m thinking this... we will get a retracement on that oil price, if the market cannot rally off that and just keeps moving down, then it's not oil that's ailing it and another shoe will be dropping toward the turn of the month...

Semi, you need to think about the sector rotation. I'm telling you there is something funny going on with respect to energy stocks. They have been a huge drag on the SP500 in the last few days despite parabolic oil. Its telling us something, but I'm not sure what yet.

Well, I don't have to think about it, the chart tells me all I need to know. The XOI is stalled here in a sideways pattern building cause to test the volume high from 12/21 (1547). This is typical of a "jump the creek" pattern. So short term expect your oil stocks to catch up with the explosion in crude. I think I mentioned a few weeks ago when the shorting oil topic came up I expected we'd test this 12/21 high...

Edited by SemiBizz, 10 May 2008 - 04:26 PM.

Thanks Semi, I will tighten my stops on shorts... OEX PC dropped below 1 too

Thanks Semi,
I will tighten my stops on shorts... OEX PC dropped below 1 too

One has to be very careful in analyzing CBOE data based on ratios.. it could be very misleading like it was on Friday. They were actually closing calls and buying puts. They only added 1204 net contracts to the longs but they added 5131 to long puts

For the week, open interest in puts jumped by 20% whereas they only added 10% to OEX calls.

Edited by linrom1, 10 May 2008 - 07:57 PM.

Thanks Semi,
I will tighten my stops on shorts... OEX PC dropped below 1 too

One has to be very careful in analyzing CBOE data based on ratios.. it could be very misleading like it was on Friday. They were actually closing calls and buying puts. They only added 1204 net contracts to the longs but they added 5131 to long puts

For the week, open interest in puts jumped by 20% whereas they only added 10% to OEX calls.

Thats another good news for the bools... killer whales now have puts to kill...
I agree with Semi, we may do some testing at the higher levels.

do you know Orca has a specialty food? he likes great white shark liver !!!

those who think they are the sharks of the market place, are mistaken badly.... orca is at the top of the food chain, see yourself

http://www.youtube.c...feature=related

http://www.youtube.c...feature=related

Edited by A-ha, 10 May 2008 - 08:54 PM.

So, here's what I think. I'm coming in with core SDS,minimal position. I'm thinking that we closed close enough to that 1385 area to retest it, WITHOUT retesting Friday's vapor volume low on the SPX. Now that's pretty precise... 1384.11. Testing that on Monday's expected higher volume sets up a problematic retest situation... unless THAT is the marker they want to leave there. If they don't test on stronger volume, that's an easy continuation to that 1397-1401 area. But now let's look at the other side, let's say this gets like February again, and we just continue on down on relatively light volume... we already know that light volume sets up a market chemistry that can take price way out of whack. I think we have to look at some strong price destruction that sets up a more favorable condition to run it higher against no resistance. Along with really fattening up that 5 day risk/reward return premium on expiry. Alright so what am I leading up to? Strategy. So for me, I hold SDS, when I see 1385 tested, I am on alert for the test of 1384.11, we have the previous light volume low at 1379.XX. So, if it looks to me like the plan is to test lower on light volume, I'll add more SDS if can break some intraday candle lows with quality of volume, if not then I'll be on alert to be ready to pick up some SSO for a possible ride north to that 1397-1401, maybe to 1409, likely then to .50R pivot 1416. So idea is to add all the way up. And probably hold the SDS core against it, because the grounds were setup for a possible retest. If VERY STRONG volume comes into the market, we go with it whichever way it wants to go, and given the weak volume trends, we better darn well pay attention to it...

Edited by SemiBizz, 11 May 2008 - 12:43 PM.