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Some technical thoughts...


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#1 NAV

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Posted 04 January 2007 - 03:23 PM

1) Hourly trend bearish. Daily and Weekly trends bullish. Next dynamic support on daily at SPX cash is at 1390. If 1390 gets taken out, which is also an important weekly pivot, then the IT trend turns down. Until then the bulls control this market and all dips continue to remain as buying opportunities. 2) 1438-1454 continues to be a key horizontal resistance on the monthly charts, where an intermediate term reaction could unfold. If we break above the 1454 level, new all time highs on SPX should be the next logical expectation. 3) E-wave picture confirms wave 1 of wave C from June 2006 lows. 4) Post price action from Dec 06 highs looks like a high level consolidation. So there exists the possibility of new highs in SPX , even if it turns out to be fake spike. 5) None of the Euphoria that precedes a LT top has been seen. That does not however preclude a IT correction. 6) Price momentum is waning. Internals like the summation index are rolling over on the NYSE and is below zero on the Nasdaq. All this has resulted in minimal price damage, which smacks of a higher level consolidation. 7) VIX is displaying a reverse H&S pattern and getting ready to bust thru it. Expect increase in volatility in the coming days. 8) Bottomline, the trend remains bullish with deteriorating internals. With volatility expected to increase, i will be looking to play both the sides, without getting married to all the secular nonsense (bullish or bearish). One fundamental observation - Silicon valley local economy is getting very hot. There are very few skilled workers available in the valley and tons of jobs to choose from. Good news for those who were complaining that their jobs were taken away from outsourcing - Now there's plenty to choose from, that is if you are skilled ! For the first time since 2001, the wages for tech workers have started to move up. So it's not all that gloomy - cheer up ! Wishing you all good trading and a prosperous 2007.

Edited by NAV, 04 January 2007 - 03:26 PM.

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#2 greenie

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Posted 04 January 2007 - 03:56 PM

One fundamental observation - Silicon valley local economy is getting very hot. There are very few skilled workers available in the valley and tons of jobs to choose from. Good news for those who were complaining that their jobs were taken away from outsourcing - Now there's plenty to choose from, that is if you are skilled ! For the first time since 2001, the wages for tech workers have started to move up. So it's not all that gloomy - cheer up !


Reminds me of Sept. 2000 - tons of jobs, lack of competent employees. What does that tell u about corporate profits?

(maybe it is all in Ewaves. I can't read them. The picture changes with season anyway. :D )

Edited by greenie, 04 January 2007 - 03:58 PM.

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It's the illiquidity, stupid !

#3 NAV

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Posted 04 January 2007 - 04:06 PM

Reminds me of Sept. 2000 - tons of jobs, lack of competent employees.

What does that at tell u about corporate profits?



Actually, tons of jobs scenario was in Jan-March 2000. Market broke in March 2000. By Sep 2000 the Monthly trend on SPX was down and the Job market had cooled down. Not the case right now. Anyway, i am a firm disbeliever of fundamental analysis as it relates to markets. So i will stay away from it !- It's very dangerous for my account.



The picture changes with season anyway.


It always does and you cannot ignore it, unless you don't care about your money. There's no certainity in markets. It's just a odds game.

Edited by NAV, 04 January 2007 - 04:07 PM.

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#4 NAV

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Posted 04 January 2007 - 04:25 PM

Greenie, As far as the e-waves are concerned the IT/LT picture has not changed at all !. I was expecting a IT correction from the SPX 1388 level. Now it appears that the market wants to head higher somemore, before that correction begins. So one has to adjust the downside expectations as well. That does not change the wave pattern, but the downside expectations. Wave pattern says SPX will make all time highs before 2009, irrespective of whatever path the market chooses to take. Again i am saying what i am seeing - Nothing is 100% gauranteed !. My stlye of analysis is dynamic in nature. I adjust my upside and downside objectives as the pattern unfold instead of sticking with some preconceived notions as to what the market should do and where it should head and static price objectives. Feel free to disagree.

Edited by NAV, 04 January 2007 - 04:27 PM.

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#5 arbman

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Posted 04 January 2007 - 05:54 PM

The market is trying to spend enough time over 1400 so that the correction does not go below 1300. It was the same for 1200 vs 1100, 1300 vs 1200. The liquidity is drying, the volatility will increase. I think 1300-1320 is possible by summer, possibly a 10%+ correction. I have now a top projection around 1450-1460 (SPX) until the market tops off... I doubt that it woes as high as 1470s... I also expect the new highs on SPX to be achieved by spring '08... - kisa

#6 NAV

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Posted 04 January 2007 - 06:21 PM

The market is trying to spend enough time over 1400 so that the correction does not go below 1300. It was the same for 1200 vs 1100, 1300 vs 1200. The liquidity is drying, the volatility will increase. I think 1300-1320 is possible by summer, possibly a 10%+ correction. I have now a top projection around 1450-1460 (SPX) until the market tops off... I doubt that it woes as high as 1470s... I also expect the new highs on SPX to be achieved by spring '08...

- kisa


Kisa,

1320-1300 has been my longstanding IT target. But i get a feeling that it might come from higher levels, from where we are. It appears, i may have to adjust that higher based on where we top out and how the pattern unfolds.

Edited by NAV, 04 January 2007 - 06:28 PM.

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#7 pdx5

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Posted 04 January 2007 - 11:31 PM

Kisa --- I am counting on your assesment of SPX levels in the coming months :D because it basically is what I am seeing. Therefore it makes no sense to go IT long at this time. But ST (2-4 weeks) I am taking a small long position.
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#8 arbman

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Posted 05 January 2007 - 02:13 AM

Kisa ---

I am counting on your assesment of SPX levels in the coming months :D
because it basically is what I am seeing.

Therefore it makes no sense to go IT long at this time.
But ST (2-4 weeks) I am taking a small long position.



Best to you guys and definitely good luck, this market is again turning into a casino until the trend resolves itself... :lol:

Edited by kisacik, 05 January 2007 - 02:14 AM.