Thursday, August 25, 2011

ES Market Selling On Strength 08/25/11

Sellers haven't gone away after all. Bears are selling on strength. The down trending $TICK after the market open is an indication to look for shorting positions.


Warren Buffett Invests $5 Billion In BAC

Berkshire Hathaway is investing $5 Billion in Bank of America, which has lifted stock futures to new recent highs.


Thursday, August 18, 2011

ES Futures Fade 50% Correction Level 08/18/11

So far, the ES Futures and the S&P 500 Index has found little reason to trade past the 50% correction level. Barring good economic news, the market may test the recent lows.


Tuesday, August 16, 2011

S&P 500 Death Cross 08/16/11

The "Death Cross" is a technical indication of a bear market. Most agree that it occurs when the 50-day moving average crosses below the 200-day moving average, as it did for the S&P 500 last Friday. The reverse bullish signal is called the "Golden Cross."


Monday, August 15, 2011

Morning ES Review 08/15/11

The market is back to its 10-day moving average, which many traders use as a dividing line between short-term bullishness and bearishness. We may start to see a decrease in bullish momentum, barring any fantastic economic news.

The market has been able to correct to the 38% level. It we are still in a strong bear market, this may be as far up as the market goes. Normal corrections usually top out in the 38 to 62% range.


Saturday, August 13, 2011

My Favorite Scalping Trade Patterns 08/13/11

My favorite scalping trade pattern is the A-B-C Wave pattern. I find that you will find these most often in the high volume, high volatility period of the morning session. The perfect setup is when you get a 50% correction of the short term trend, and then a continuation of the short term trend with the B-C Wave traveling as far as the first A Wave. You also want to see the TICK indicator correct to the 200 - 800 area in down trends and to the -200 - -800 area in up trends for a good place to enter the trade. It takes practice in a fast market. There will always be times when you enter too soon or wait too long to enter and miss the trade. However, these trades are usually high probability. Just make sure that you know if you are in a short term up or down trend.


Wednesday, August 10, 2011

Technical Correction 08/10/11

So far, today's downtrend is a normal technical correction of yesterday's up wave. If the market goes below the 1113.75 low, it may test the 1077 low of yesterday. However, if the market consolidates in this 62 to 38% corrective range, we may see a third wave to the upside. Initial resistance is at today's pivot, which is near 1131.50.


Tuesday, August 9, 2011

S&P 500 Index Fiib Levels 08/09/11

Based on the last up wave, as long as the market stays above the 935 level, this can be considered a normal correction in an up market. However, if the market closes below the 935 level, it probably will test the 667 low. This down wave may take a while to complete. The last down wave took 17 months to form from top to bottom.

I have to chuckle a little at Obama yesterday stating that the US is a triple A credit risk, no matter what anyone else thinks. If he were the captain of the Titanic, I'm sure that he would tell everyone not to panic since the ship isn't sinking. After all, how can an unsinkable ship sink?

Please note Mr. President, that you don't decide what the US credit rating is. Your creditors decide what that rating is.


Jim Rogers: U.S. downgrade deserved; Geithner should go

S&P's Beers: Fate of U.S. rating hinges on Congress action

Monday, August 8, 2011

Scary Thought 08/08/11

Above is the S&P 500 weekly chart. Wouldn't it be a scary thought if this turned into an A-B-C Wave correction with the market going to 461. That's 200 points below 2009's low.


ES Market Stays Above Friday's Lows - Morning 08/08/11

So far, the overnight market has stayed above Friday's lows. The European Central Bank is implementing a "bond buying program" to help calm European markets. The American administration, in comparison, has spent most of the weekend blaming everyone, except themselves, for its problems. We have a FOMC Announcement tomorrow at 1415 ET.


Saturday, August 6, 2011

S&P Downgrades US Credit Rating From AAA

The Washington DC politicians will be complaining about this downgrade. After all, it is the dream of every politician to be fiscally irresponsible and have a triple A rating.


Friday, August 5, 2011

Down Trending Markets 08/05/11

Quite simply, in strong down trending markets, support fails and resistance holds. Look for entries on tests of resistance.


Wednesday, August 3, 2011

S&P 500 Index Head And Shoulder Pattern 08/03/11

You may have heard Art Cashin talk about the S&P Head and Shoulder pattern, and the break past its neckline. The chart above shows you what he was referring to. Technically, the market may find support neat 1139. Of course, the market could also rally to new highs.


Tuesday, August 2, 2011

Bear Territory 08/02/11

We are in definite bear territory with the S&P 500 Index below its 200-day moving average. Most of today was a nice step wise move down. If the market made this type of formation everyday, trading would be easy.


ISM Data Lowers Prospects For Market 08/22/11

The market is now concerned over the market's prospects as the ISM data is showing a steep decline. This can be seen in the above ISM chart, which was obtained from the St. Louis Fed website. The market is currently testing yesterday's lows.