Trading the SPX

[Jerry Olson]

Andy's Market Watch - Outlook

Updated 08-Mar-2008

I continue to see mid-March as a low. We had a follow through in price this week making it look like the move to the low is on. There was a lot of confusing daily price action last week. But if you look at the SPX intermediate term chart below, you will see the weekly bar finished near the low and is obviously bearish.

A move to SPX 1230 would be bullish. Anything beyond that price could turn the following multi-month bull move into just an oversold rally. I see Bill McLaren has already given up on the strong move up based on his reading of price action and expects only an oversold bounce from this point. I don't see this on the SPX yet - as long we never close below 1230. I am not an E-Wave purist and would not mind an interday spike well below 1230. But reality and what I think are not synonymous and reality has beaten me every time, so far.

Assuming we stay above SPX 1230, my guess is this: The A-B-C correction between the first 5 wave cycle and the second 5 wave cycle (completed in October) lasted 218 calendar days. Whether the rally will be wave 1 of the final five wave set of the bull market or wave 4 of this correction will be determined by October. Other factors pointing to a mid-March move are:

* The 5 year cycle from the March 2003 bottom
* 50% time of October to January move
* 75% time of March to October 2007 move
* March 14th is 240 degrees from the July top on the VLE Gann emblem chart.
* March 6th is 144 degrees from the October top on the SPX Gann Emblem chart (people love that 144 number - I have not found it all that exciting...)

Looking at my public list of dynamic charts, I see the SPX attempting to complete an a-b-c off the January bottom. As long as this move stays below 1406 we can consider it wave 4 of the move down from October - with wave 5 to come into mid-March.

As always, I could be completely wrong...

Hello AJ

heck i'm from the Philly burbs so hello to a fellow Penna.

I use Point & Figure for my longer term charting set ups..

1280 SPX very solid support, any break below 1240 we go directly to 1180 the bottom of the 10 week trading band.

the bearishness out there is at historical and hysterical levels, so a bounce could happen just near the FOMC date around the 18th of March...

let's see what Monday brings us next week

good luck all

jerry

 

[ajaskey]

Hello AJ

heck i'm from the Philly burbs so hello to a fellow Penna.

I use Point & Figure for my longer term charting set ups..

1280 SPX very solid support, any break below 1240 we go directly to 1180 the bottom of the 10 week trading band.

the bearishness out there is at historical and hysterical levels, so a bounce could happen just near the FOMC date around the 18th of March...

let's see what Monday brings us next week

good luck all

jerry

Hey Jerry,

Hello from Paternoville. Interday I don't care how low we go. I want a close over 1220-1230 to remove longer term bullish. I'm buying any move below 1250.

 

[Jerry Olson]

Hey Jerry,

Hello from Paternoville. Interday I don't care how low we go. I want a close over 1220-1230 to remove longer term bullish. I'm buying any move below 1250.

Ok Andy

but i do not like any move below 1240, not me...it breaks an imprtant uptrend line on P&F that would trun this index into a potentially negative chart pattern...

but let's see what happens next week one week at a time..no rush and no predictions...

i'll leave those to the Gurus out there............:cheesy:

 

[Jerry Olson]

Ok Andy

but i do not like any move below 1240, not me...it breaks an imprtant uptrend line on P&F that would trun this index into a potentially negative chart pattern...

but let's see what happens next week one week at a time..no rush and no predictions...

i'll leave those to the Gurus out there............:cheesy:

not sure if this will work but here the P&F chart of the SPX using a20 point per box size...

http://www.buyitbuyitsellitsellit.com/OJ1.gif

 

[Pat494]

1 DAY PRICE CHANGE -8, strong down (-146.7 pts, -1.2%) from yesterday's close, may pause/stop.

SHORT TERM DIRECTION -8, strong pullback, pullback may start to slow.

OVERBOUGHT/SOLD -7, Oversold, odds favor long trades.

1 MONTH TREND -2, Mild Down trend.

INTERMEDIATE TREND 10, bullish,
** Past 4 months Downtrend turned sideways, possible bottom.

RESISTANCE/SUPPORT 11893.69, not at resistance or support

(StockConsultant)

 

[Jerry Olson]

1 DAY PRICE CHANGE -8, strong down (-146.7 pts, -1.2%) from yesterday's close, may pause/stop.

SHORT TERM DIRECTION -8, strong pullback, pullback may start to slow.

OVERBOUGHT/SOLD -7, Oversold, odds favor long trades.

1 MONTH TREND -2, Mild Down trend.

INTERMEDIATE TREND 10, bullish,
** Past 4 months Downtrend turned sideways, possible bottom.

RESISTANCE/SUPPORT 11893.69, not at resistance or support

(StockConsultant)

WELL hello Pat

i have no clue what that means, but if you get a chance let me know

i am writing my newsletter now using a BLOG instead of e-mail...

good to see you again

 

[Pat494]

WELL hello Pat

i have no clue what that means, but if you get a chance let me know

i am writing my newsletter now using a BLOG instead of e-mail...

good to see you again

Hi Jerry and Andy,
Good to see you back again. Been a while.
I "borrowed" the quote from stockconsultant.com. They explain if you care to visit that website and do get it right occasionally. I favour a down day too, which should send it skywards.
regards
Pat

 

[ammo]

Andy's Market Watch - Outlook

Updated 08-Mar-2008

I continue to see mid-March as a low. We had a follow through in price this week making it look like the move to the low is on. There was a lot of confusing daily price action last week. But if you look at the SPX intermediate term chart below, you will see the weekly bar finished near the low and is obviously bearish.

A move to SPX 1230 would be bullish. Anything beyond that price could turn the following multi-month bull move into just an oversold rally. I see Bill McLaren has already given up on the strong move up based on his reading of price action and expects only an oversold bounce from this point. I don't see this on the SPX yet - as long we never close below 1230. I am not an E-Wave purist and would not mind an interday spike well below 1230. But reality and what I think are not synonymous and reality has beaten me every time, so far.

Assuming we stay above SPX 1230, my guess is this: The A-B-C correction between the first 5 wave cycle and the second 5 wave cycle (completed in October) lasted 218 calendar days. Whether the rally will be wave 1 of the final five wave set of the bull market or wave 4 of this correction will be determined by October. Other factors pointing to a mid-March move are:

* The 5 year cycle from the March 2003 bottom
* 50% time of October to January move
* 75% time of March to October 2007 move
* March 14th is 240 degrees from the July top on the VLE Gann emblem chart.
* March 6th is 144 degrees from the October top on the SPX Gann Emblem chart (people love that 144 number - I have not found it all that exciting...)

Looking at my public list of dynamic charts, I see the SPX attempting to complete an a-b-c off the January bottom. As long as this move stays below 1406 we can consider it wave 4 of the move down from October - with wave 5 to come into mid-March.

As always, I could be completely wrong...

another mrkt call,who is this guy,pay no attention to the man behind the curtain, good job andy

 

[Joules MM1]

......and on page 18 of the "short-hook guide attempting a dead-cat bounce" you'll find this lil beauty :

Fed Takes New Steps to Ease Crisis- AP
Worry about the damage a growing credit crisis is inflicting on an ailing U.S. economy led the Federal Reserve to make a rare weekend move, lowering a key lending rate before Wall Street opened Monday. (yahoo finance)

 

[ajaskey]

Short Term Outlook

I've started a blog to capture my random thoughts.

PTV-Investing.com Blog

Here is the text of my latest post:

----

The DOW has had 4 down days which is the limit for a healthy trend move. The SPX and NDX have had 3. Monday looks to be critical to maintain this uptrend. The easy play in these setups is for the third or fourth down day to recover on volume in the afternoon. I was thinking it may happen today. The thing is that there were no sellers either.

One the plus side, volume was the lightest of the week. I heard/read rumors of forced hedge fund liquidation into the end of March. The rumored funds were not very big if it did happen. Maybe they are waiting for Monday the 31st. If so, the buyers will step away and get a lot of stuff cheap. I really doubt that the sellers would back themselves into that corner. Whatever the outcome we will know early Monday.

I would not buy weakness and wait for the market to show some real strength on volume. The world won’t end if Monday is down, but it is not a setup I want to be trading on the long side. Until the March 17 low is taken out I am considering the trend up. But it is current at a weak up posture.

One final possible positive is that the QQQQ held up much better than the NDX today. I like to watch the QQQQ as a tell as it often leads the indices in either direction.

Longer term.

Everything is right at the expected price/time slope. There is no reason to worry about the trend into May/June as long as price respects the short term diagonals. The SPX and VLE look good. Both charts are progressing towards the cross of the diagonals (which I call the 50/50 point).

 

[ajaskey]

Current Outlook

Monday and Tuesday provided a big impulse up and was followed by three days of working off the move near the high of the thrust. We are somewhat overbought in the short term but the 20dma of the Adv/Decl lines are still oversold. Mutual funds I own and watch have made nice gains during the three consolidation days of the indices. This may mean the money is rotating out of stocks the funds don't own into stocks the funds do own. My money is on moving up next week but that may be talking my position.

My Current Guess

We have finished wave "A" from the October top. The market will rally into June (wave "B") before a final move down into October (wave "C"). This should be followed by the final 5 waves up completing three major waves up from 2002. If the drop into October moves significantly beyond SPX 1220 I will need to rethink this guess. As an example of the move I expect, I am looking at March 2001, July 2002, or March 2003. I don't think the percent move up into June will be as great as any of these because the move down was only about 20%.


The roadmap below was started in 2004 and updated as time passed. So far, the market has moved as expected off the 2002 bottom.

 

[Pat494]

Andy's posts seem OK to me. imho
I agree about probably up next week !

 

[Pat494]

The Dow traded quietly sideways throughout the session Friday, as the index pushed back and forth within the boundaries of the clear consolidation that has formed from 12,500 to 12,700, as seen in the 15 and 60 Minute Charts. The index closed the day with a mild loss of just 17 points, but is likely to get a big breakout from the consolidation early next week.

( signalwatch )

translating that to the S&P I make it about 1360 to 1380 channel and an expected BIG breakout. They favour down ?

 

[poster]

I am bearish on SP 500 to begin with on Monday. Will watch the level of 1383 for upward move and 1373 for down trend. I am a day trader and was short on S&P 500 on friday and won all my Four short position, cashing in 8 ticks all the time and one long position. Was great day for me last Friday as I won all my trades after Thursday, where I lost 1 trade and covered up by 3 winning trades. Lucky enough to close all my position at 54 ticks, Thursday + Friday.

 

[Hook Shot]

Big Week ?
For now...Still having problems with 1380(~38% of the fall off ATH in oct..........)
180d from all time high's = today 8th April
Friday 11th = 6m from ATH.......

 

[Pat494]

On my swing-ometer I got a figure of +11 for today on a scale of -100 to +100. My system only has a 68% win ratio so don't get carried away folks

 

[ajaskey]

Updated 12-Apr-2008

I posted on my blog about price retracing to a 50% move off the March low. You can see that post here. Next Friday the 18th is options expiration and also 50% of the time for the 17Mar-07Apr move which took 21 calendar days. SPX 1321 is at 50% price retrace of the total 130 point move. This correction is not unexpected. I was looking for price to move 360 degrees from the bottom which is around 1403. Because we did not complete that move, I assume that there will be another leg up before this move is finished.

We have worked off the overbought condition from last week and are set to move up again. If price does not move strong on Monday or Tuesday then I expect that the big boyz will keep price near the current levels until options expiration. Again, the 50/50 point (retrace price and time) is on Friday at SPX 1321. This may be where price wants to go before another thrust up.

My Current Roadmap Guess

We have finished wave “A” from the October top. The market will rally into June (wave “B”) before a final move down into October (wave “C”). If this wave "B" has only 3 waves (two up) then I cannot see a rally into mid/late June. It seems logical to make a move of that duration, and considering we may be in the second wave already, we will need five waves to take us into June. I am very bearish from the end of this move into the September/October timeframe.

The first two charts on my public list provide a dynamic view of what I watch on a daily basis.

The roadmap below was started in 2004 and updated as time passes. So far, the market has moved as expected off the 2002 bottom.

As always, I could be completely wrong...

Ongoing blog is here.

 

[firewalker99]

Those trading the ES might be interested in the overnight action.

I posted an analysis over the weekend in the private forum of Grey1. It explains why 1405 might be more important than 1400 on the ES. For those who don't have access to it, I copied it over here:

One more thing about 1400 though... I don't see it as a particularly important level. In fact +/- 1380 was resistance in my book.

Price could halt around 1405. So yes, I think this has some more upside to it before we turn. But I won't take the bull side camp until we break clear of 1425.

 

[Pat494]

Hi FW,
Not saying that you are wrong BUT on your left chart I would be inclined to draw the blue arrow in as UP ?? Price has pushed through resistance and onwards and upwards imho.

 

[firewalker99]

Hi FW,
Not saying that you are wrong BUT on your left chart I would be inclined to draw the blue arrow in as UP ?? Price has pushed through resistance and onwards and upwards imho.

True, we are above resistance, but I believe there's more overhead resistance...
There's also the fact that the "longer" trend is still down, although the "intermediate" term trend has been more up than anything.

Anyway, no one has a crystal ball, so chances are you might want to mirror the blue arrow to the upside and you could be right It's not about right or wrong for me, I don't mind much anyway as I only trade intraday.