Sunday, February 28, 2010
Saturday, February 27, 2010
Let's get our bearings
Today is Saturday and I had planned a lengthy post showing longer term perspectives. However I got sidetracked on another project and the clock is running out. Anyway, the exercise would be sort of like reinventing the wheel, there are some excellent analysts out there who would echo my viewpoints. Two that I pay particular attention to are:
Tony Caldaerow
http://caldaroew.spaces.live.com/
Daneric
http://danericselliottwaves.blogspot.com/
Caldaroew was long term bearish and has swung to bullish in the last month or so. Daneric has been bearish and remains in that camp. As usual, there are very convincing arguments on both sides of the coin.
My take is that we are in fact at an extremely critical juncture and this thing could easily swing one way or another over the next month or two, and whichever way we swing is going to win the longer term argument. I lean more towards the bullish camp based on economic and political fundamentals. I know the argument that you can't trust government economic reports, but it is apparent that the bottom of the crisis (for now) is past us. Also, it is an election year, and the Feds will be getting pushed HARD to dress things up.
For trading purposes however I'm very nervous about the long position established Friday AM. For one thing I did a lousy job on timing the trade (should have had a little more patience, could have entered at a much better level). For another, some of the technical work I do is indicating a very short term (1 or 2 day) top as of the close Friday. I'm going to chew on it some more, but I may go to cash tomorrow evening with a buy on stop order in place overnight.
Tony Caldaerow
http://caldaroew.spaces.live.com/
Daneric
http://danericselliottwaves.blogspot.com/
Caldaroew was long term bearish and has swung to bullish in the last month or so. Daneric has been bearish and remains in that camp. As usual, there are very convincing arguments on both sides of the coin.
My take is that we are in fact at an extremely critical juncture and this thing could easily swing one way or another over the next month or two, and whichever way we swing is going to win the longer term argument. I lean more towards the bullish camp based on economic and political fundamentals. I know the argument that you can't trust government economic reports, but it is apparent that the bottom of the crisis (for now) is past us. Also, it is an election year, and the Feds will be getting pushed HARD to dress things up.
For trading purposes however I'm very nervous about the long position established Friday AM. For one thing I did a lousy job on timing the trade (should have had a little more patience, could have entered at a much better level). For another, some of the technical work I do is indicating a very short term (1 or 2 day) top as of the close Friday. I'm going to chew on it some more, but I may go to cash tomorrow evening with a buy on stop order in place overnight.
Friday, February 26, 2010
Treading Water
Pretty much sideways today except for a little drop this morning from which the ES recovered to close marginally up. Pretty sloppy and choppy, so very much corrective. Monday should be an up day.
Thursday, February 25, 2010
Go Long or be Wrong
Things sure swung around today, covered short ES for loss after hours. What was shaping up to be a nice impulse down turned out to be the C wave in a zig-zag correction to all appearances, with the C wave being an ending diagonal.
The break over the trendline at end of day was accompanied by a buy signal in my momentum indicator, so I'm looking for a spot to go long ES.
From a longer term perspective, there are at least three very valid EW counts that could be applied here. If time permits I'll lay those out over the weekend. But bottom line is the move off today's lows is clearly impulsive and was accompanied by a buy signal in my system, so a long trade is dictated at the best opportunity. Plan is to go long on a pullback with a stop at or below today's low of ES 1085.75. The one thing that is of concern is the possibility that what we're seeing is a running flat, where "B" above is actually "a", "C" is actually "b", and we're in the final "c" leg right now. This would mean hard down in the immediate offing. So if a long trade is executed, the stop needs to be a stop & reverse.
From a longer term perspective, there are at least three very valid EW counts that could be applied here. If time permits I'll lay those out over the weekend. But bottom line is the move off today's lows is clearly impulsive and was accompanied by a buy signal in my system, so a long trade is dictated at the best opportunity. Plan is to go long on a pullback with a stop at or below today's low of ES 1085.75. The one thing that is of concern is the possibility that what we're seeing is a running flat, where "B" above is actually "a", "C" is actually "b", and we're in the final "c" leg right now. This would mean hard down in the immediate offing. So if a long trade is executed, the stop needs to be a stop & reverse.
Wednesday, February 24, 2010
Vertigo
Current position: short ES @ 1095.75, S&R @ 1113.75
Slam-o-rama today, especially this morning. I'm sure the boys in the pits pocketed some nice coin. The pattern since the low @ ES 1090.25 yesterday has multiple overlaps and looks quite corrective in nature. Also, volume continues to be tepid. Yes, we could push up to test recent highs tomorrow, but it's the less likely option IMO.
I did my best Elliott wave analyst impersonation on the chart below, I'm sure there are better ways to count it, but the take away message is the lack of a clearly impulsive pattern.
Slam-o-rama today, especially this morning. I'm sure the boys in the pits pocketed some nice coin. The pattern since the low @ ES 1090.25 yesterday has multiple overlaps and looks quite corrective in nature. Also, volume continues to be tepid. Yes, we could push up to test recent highs tomorrow, but it's the less likely option IMO.
I did my best Elliott wave analyst impersonation on the chart below, I'm sure there are better ways to count it, but the take away message is the lack of a clearly impulsive pattern.
Tuesday, February 23, 2010
Turn day?
Current position: short @ ES 1095.75, S&R @ 1113.75
ES is showing a very impulsive 5 waves down from the high overnight into today's low. You can see it very clearly on the 5 min chart:
This highlights one of the reasons I keep 24 hour ES charts (outside of the fact that I trade ES) - often the picture is much clearer than what can be seen on a chart of the SPX over daytime trading hours.
If there is going to be a P3 as a lot of folks think this would be a likely kickoff. As I mentioned yesterday, the rally from the low of Feb 5 has pushed the price & time envelope if it's just a correction to the selloff that started in January. So this dump today is almost right on cue. As usual though nothing is for certain. Also, given the nice impulse down today one would expect a retrace towards the high before any follow through selling, so tomorrow may not clear the picture up very much.
ES is showing a very impulsive 5 waves down from the high overnight into today's low. You can see it very clearly on the 5 min chart:
This highlights one of the reasons I keep 24 hour ES charts (outside of the fact that I trade ES) - often the picture is much clearer than what can be seen on a chart of the SPX over daytime trading hours.
If there is going to be a P3 as a lot of folks think this would be a likely kickoff. As I mentioned yesterday, the rally from the low of Feb 5 has pushed the price & time envelope if it's just a correction to the selloff that started in January. So this dump today is almost right on cue. As usual though nothing is for certain. Also, given the nice impulse down today one would expect a retrace towards the high before any follow through selling, so tomorrow may not clear the picture up very much.
Monday, February 22, 2010
Slow market
Current position: Long ES from 1073.25, stop & reverse @1085.00
http://screencast.com/t/YmM4OTNjZGM
Sideways grind today, almost no net change. I'm sure some talking head out there is saying "the market is digesting recent gains".
In EW terms we're either in (a) the C wave of a 2nd or B wave correction to the downstroke of Jan-Feb, or we are (b) embarking on a continuation of the bull market that started in Mar '09. If it's (a) then it's pushing the envelope in terms of price & time and should turn back down fairly soon, if it's (b) the volume has sure been stinky. We should know the answer by the end of the week.
http://screencast.com/t/YmM4OTNjZGM
Sideways grind today, almost no net change. I'm sure some talking head out there is saying "the market is digesting recent gains".
In EW terms we're either in (a) the C wave of a 2nd or B wave correction to the downstroke of Jan-Feb, or we are (b) embarking on a continuation of the bull market that started in Mar '09. If it's (a) then it's pushing the envelope in terms of price & time and should turn back down fairly soon, if it's (b) the volume has sure been stinky. We should know the answer by the end of the week.
Saturday, February 20, 2010
Current position: Long ES from 1073.25 on Feb 11. Stop loss currently set at ES 1080.00, and is a stop and reverse. Until I figure out how to paste a chart directly into this blog I'll have to go with a screencast link of current position and chart:
http://screencast.com/t/MjQ5MTYyOD
As can be seen, the pattern on the ES from the low on Feb 5 channels quite nicely. We bounced off the top of the channel both on Thursday and Friday, but the uptrend is still intact. The volume accompanying this rally is less than impressive (to say the least), but even so, it is beginning to look impulsive rather than corrective. Which may mean the drop from Jan 19 to Feb 5 may itself have only been a correction to a longer term bull trend, and the rally from Feb 5 is a resumption of that trend. That's hard for me to swallow for a myriad of reasons, but it is what it is.
http://screencast.com/t/MjQ5MTYyOD
As can be seen, the pattern on the ES from the low on Feb 5 channels quite nicely. We bounced off the top of the channel both on Thursday and Friday, but the uptrend is still intact. The volume accompanying this rally is less than impressive (to say the least), but even so, it is beginning to look impulsive rather than corrective. Which may mean the drop from Jan 19 to Feb 5 may itself have only been a correction to a longer term bull trend, and the rally from Feb 5 is a resumption of that trend. That's hard for me to swallow for a myriad of reasons, but it is what it is.
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