Thu. 10_04

Gap up, consolidate, momentum, pull back, consolidate, close near highs.
Early morning ping-pong between the opening swing, which was also the midpoint of the overnight range.  Opening swing highs held support as did the overnight highs later in the afternoon.

A key for the above chart to define the horizontal lines and dots.  For further explanation, see this link:   

Advance/Decline started, and remained, high the entire day.  While Up/Down volume trended strongly higher all day.

15m and 5m with 3/10macd.  The fuchsia lines were left in to highlight how a symmetrical triangle morphs into an ascending triangle.  This looks ready to move higher in my opinion.

Butting up right against resistance

Today we achieved the 50% projection off of our most recent seed wave.

30min

A 30-minute chart of the SPY with a 20- 50- & 117- period Simple Moving Average.  I know, I know, you're thinking; "A 117-SMA is just stupid."  However, I use it on a 30-minute chart to closely approximate where the 10-day Moving Average is located.  Likewise, the 50-SMA closely approximates (technically 52) where the 5-DAY Simple Moving Average is located.

What is illustrated above is the following:
"BD" means Break Down point.  In other words, Price breaks down from previous support pivot.
"T2R" stands for Tries to Recover.  In other words, Price tries to recover the Break Down pivot.
Also highlighted is the "3d" criteria on the 3/10macd.
As a reminder, the slow line crossing below (or above) the zero-line often precedes a 20-50 Moving Average crossover (which in the above 30-minute chart approximates the 1.5- & 5- Day Simple Moving Averages, the Green and Blue moving averages).
Also, the "3d" criteria can define areas of important support (later on being resistance).

Just for illustrative purposes, below is a daily (left) and 30-minute chart for comparing the 5- & 10-SMA on the daily with the 52- & 117- SMA on the 30-minute chart.

weekly SPY

The week ending 11/05 the SPY printed a large momentum bar (teal candle).

Here is how the mipoint (blue horizontal line) acted as a pivot for the following 8-days where 100% of the momentum impulse has been retraced.
Also on the chart below (green horizontal) is the midpoint (as measured from the Close on 11/03 to the Open of 11/04) of the impulse gap up.  Support becomes Resistance:

2x bar

I put together a brief document covering the 2x-bar strategy (the doc is now private.  If you would like to view it please follow the link and request viewing.  Thank you):

Here's an example using RIMM today

On the faster timeframe, a great example of Resistance turning support.

base breakdown example

A good example of dying pace in GOOG today.
Bounced twice off of the initial low before continuing lower, while later Support was turned Resistance. Tough part would have been gauging a downside target, hmm.

just a chart

SPY still in an up trend (purple line). Most recently, support has turned resistance.

failed short

Shorted JOYG and got stopped out, but I still love this pattern where you can just see buying interest just die.
The Support-turned-Resistance zone was working early in the day, but the more it comes back to test it and the more the buying interest wanes, the higher probability it will break down from support.I entered on a little bear flag setup and got whipped out (stop too tight), had I stuck with it I can see the potential of where I would have gotten back in with much cleaner price behavior within the later bear flags at support

POT breakdown

A look at POT Support/Resistance levels going into the week.
It has spent a lot of energy getting back into an accepted price range and the faster it gets to $100-ish (if it goes that direction) the quicker it may be repelled lower.
The following chart shows great examples of support-turned-resistance and other classic technical patterns, so if nothing more, this chart is good to have on here just for posterity:A faster timeframe;
Following a test of $96 support the last few candles were a pennant breakout pattern.

So, scenarios ahead are:

- $96 support broken on Monday could be a sign of weakness, but in such a case $94.50 could easily be support for a re-test of $96 (support turned resistance).

- A gap up early into $98-99, which will either confirm the pennant breakout, or lead to a pennant breakout failure. If the former, $100-101 is resistance (and measured move), If the latter, refer to first scenario.

- A mild gap either way, met with dips being bought into $100-101.

FCX S/R

FCX sold off Monday's gap up and needs to recover previous support. Buyers stepped in at the lows and continuation to the upside could give us an inverted Head & Shoulders pattern.Look how far back this support/resistance zone extends:Watching to see how much supply is at $66, reclaiming support there will be telling imo.

Copper

A continuous contract chart of Copper showing a 50- & 200-MA crossing over.In comparison, FCX showing a closely correlated structure

Currently FCX is sitting just barely above it's 20-MA at the top of a channel and just below previous support:From here for the week ahead, on the upside I could see a test of $70-ish while to the downside a test of $62 area.
On a large time-line this issue is looking more and more bearish, which presents shorting opportunities on price rallies back to previous support levels.

USO wedge

First a look at USO back to 2009. The $31-$32 level just highlights the major pivot zone that band has represented. The angled lines are multi-pivot parallels (equi-distant from one another) based off of the price behavior throughout 2009 and projected forward. Recently price bounced within that long-running support pivot (between $31-32) and made a run up to previous support (support-turned-resistance?) on waning volume.
The current wedge also happens to be a bearish wolfe wave (looking for volume to activate the "sweet spot").

DJIA 10300

The Dow Jones Industrial Average tested 10,300 today and was quickly sold. A nice example of Support turned Resistance turned Support turned Resistance

Looking for Support

...or is it resistance?
Looking for support in a strong momentum move can be pretty straightforward (so long as support holds ;). What we had to go on in today's SPY sell-off were prior consolidation ranges, between $117.50-$119 (Resistance-becomes-Support). After having potential targets in mind, it becomes a matter of watching for selling exhaustion (TICK divergences and higher lows within your target boundary).Here's a look at the SPY daily price congestion rangesHere's a look at the volume profiles, showing the primary congestion range
What's really interesting is the following monthly chart of the SPY. The $119-$120 level (where we found support today) coincides with a mid-point of the S&P500 going back 12 years. Also interesting is how the above chart looks a lot like the one below...so, is the current phase finished, or only half-finished? :)


The QQQQ closed the week just under the $50 mark:One further observation;
The Dow closed just barely above the 11,000 mark. Take note of how long price has previously bounced between the 10,000 and 11,000 levels before:

continuation

I posted this chart yesterday, so keeping with the previous day's levels we move forward into today extending the gap range area and watching for Support/Resistance at previous strong volume points.
Previous Resistance turned Support held today (coming very close to previous day's VPOC).
Resistance throughout the day was the $116.90 area ( a previous area of strong volume support).Here's a look at the most recent Volume Distributions, today's lows came right into the zone of yesterday's VPOC. The indexes have some formidable resistance ahead of them (as they have since getting beyond their 38.2% retracements. The Q's being in the lead in terms of a recovery, it is a mere 12% off of it's '07 highs. Between it's close today and the $50 level, there's a 78.6% retracement zone and a prior swing high to contend with, if there's some selling on the horizon me thinks it should come with a test of these levels.IWM overhead gap fill scenario in play (same goes for DIA and SPY)

RbS

Resistance becomes Support (RbS) in the SPY as price gaped down (on scant momentum and returned back to a previous consolidation level.Looking at the Volume Profile of the past few days, watch areas of previous large volume levels, particularly those not yet tested (VPOC). Below we see some levels of potential Support/Resistance, I also marked the gap created on Wednesday last week. This perspective highlights the concept that price often tests areas where it previously sliced through.
Now look at how it translated onto a 5-min price chart with the same price levels highlighted:
Not labeled on the above charts is the overhead resistance level (in terms of the volume profile) between $116.90 - $117.15.

Candle Patterns

Ran across some text book candle patterns, take a look:
A Bullish Piercing Line pattern in TSL:
OK, this isn't exactly a Bearish Meeting Lines pattern in BA, but comes within a few cents:
Nice example of Support-turned-Resistance looking at the weekly chart:A Bearish Hanging Man in GS:Not very glamorous, but a Bearish Engulfing pattern on the XLI:Bearish Dark Cloud Cover IYT:

115.14

January's monthly high for the SPY was $115.14. Seemingly insignificant, but look at what this level has meant to the SPY for well over 12 years. Red arrows = resistance, Green arrows = supportDon't get caught up on the exact penny of $115.14, rather use that level as a suggestion of possible support/resistance.
So, starting with 1998, here's the intraday $115.14 level:
July 1998-Dec.1998:
March 2001 - May 2002: January 2004 - May 2005: September/October 2008:
And last but not least, 2010:
And if that doesn't get you excited, take a look at yesterday and today on the 5-minute time frame: