price slings

Price held the long-term trendline and isn't giving up the gaps, or the bearish moving average orientation. Not to mention the last 10-minutes of the day are beginning to become awfully predictable (currently at 1 p.m. PST the SPY volume spike is off the charts).
I'm going to let my charts speak for me today, as I marked them up pretty good. Here's the 5-min chart of SPY. Some nr7 doji reversals for ya. The red/green vertical lines represent (as always) the "First Cross" entries.and here's the TICK divergences lining up with price highs/lows.And here I wanted to highlight the "Slingshot" setup once again, from today's tape off of the SPY 15-min chart.Rally caps on tomorrow?

holding on

SPY gapped down this morning within 10-cents of yesterday's opening gap down price. After finding support at S1 we got a dragonfly doji followed by an nr7 up candle on top of vwap (don't you love having a confluence of reasons to take a trade?). We did manage to fill the gap (which coincided with pivot resistance), but that was about all we managed. From there it was all downhill. Later in the afternoon was an utter mess with a broadening wedge that will drive you nuts. At 4-p.m. the SPY closed just under the gap-up low from Thursday last week. As of 4:15-p.m. price is back about that level (shake out?).
We did put in some lower highs and lows today, and the 20- & 50- EMA's have crossed over bearish. However, price hasn't liked that orientation lately, so we'll see if it tries to shake off that bearishness tomorrow.These empty spaces we're being left with (a-la opening gaps) are being guarded closely.
This afternoon's attempt to fill the gap left from Thursday resulted in sideways consolidation with a meagerly bearish TICK. While at the end of the day the TICK gave it's lowest reading of the day and price put in a higher low (on extreme volume) and turned back up towards the opening range low. Price is not giving up without a fight.
Compare that to early last week, where TICK sentiment was certainly bearish, but price refused to go any lower. You have to wait for price to tip it's hand with certainty. Maybe Intel earning's will put a strain on things?

RBS

Some Resistance Becomes Support instances today. The SPY gap down this morning consolidated at R1 for a good half-hour. A break of the opening range came in the form of an NR7 (purple candle, on the 5-min chart below), followed by a WR7 (white candle). Price stopped at the previous session's resistance level (followed by a harami candle setup AND a "First Cross" short entry). The falling wedge corresponded with a consolidation around vwap (complete with momentum divergence). Price tested resistance again, broke out and consolidated at new support. The previous session's highs was the next range to go. Price closed the day right around Firday's highs on pathetically low volume.Our 15-min and 60-min chart highlight the RBS (resistance becomes support) concept even more clearly.

smoke em if ya got em!?

It's about time we start living in the 21st-century. Now let those cigars into our country already!!

record profit rally

Of course I'm referring to Wells Fargo reporting "record profits" (yeah right!) giving the markets reason to remain bullish. Anyway, I keep to rules of not placing a trade within the first and last 30-minutes of the day. This morning I put in a limit order to by the base break (in SPY) on the 4th bar (5-min chart). As soon as I put the order in price launched away, leaving my order twisting in the wind. Anyway, I ignored my rules, but I'm thinking of amending that rule to allow myself to respond when price speaks to me, regardless of what time it is, so long as I keep it on a tight leash.
Anyway, price gapped all the way above R2 this morning, based for 20-minutes before making a run to R3, where it stopped dead in it's tracks.So, if you missed the small play early in the morning, and you weren't positioned to take advantage of the gap, you're left to wait for the pullback. Before noon price came back to test the lows of the morning (giving up the 20-EMA briefly). This is where I switch to the 15-min time frame to wait for a strong reversal (or continuation) setup. Today we were given a combination of a Tweezer bottom with a bullish engulfing candlestick pattern.
Also, looking at the 15-min chart we can see a good example of a "Slingshot" setup that ocurred yesterday late in the afternoon (price reaching like, or slightly higher swing lows, while momentum made lower lows; leading to a "Slingshot" in price. On the daily time frame we have higher volume for today's move, a tick up in ADX (beginning of a trend?), momentum looking to get positive, and a 20- & 50-EMA crossover taking place. It would be nice to see a pullback to the moving average crossover, but ya gotta play what you get.

demand in that range

In these past two days we have tested the gap left from last Thursday on the SPY ($81.50-$82 range) with, what looks like, increasing demand. When price was in that range we have also seen the NYSE TICK react in a way that gives me the impression that offers are being lifted with increasing interest.
Yesterday, as we gapped down into this range we saw a bullish divergence in the NYSE TICK, leading price higher. Later in the afternoon yesterday, price was very range-bound at these lows while TICK couldn't drag price any lower. This morning we found ourselves back in this range while the TICK again acted in a bullish manner, while this afternoon price V-bottomed when the TICK tagged those negative boundaries.This morning gave us a cup w. handle setup and two "First Cross" entries (green and red vertical lines). The long "First Cross" entry coincided with a retest of the break from the cup and handle breakout (price broke out from the cup's rim, came back to re-test the rim's price and continued the measured move).The 15-min chart shows the refusal of price to close the gap left from last Thursday. The 20- & 50-EMA aren't giving up their bullish orientation.It looks as though the bulls have successfully turned back any further bearish retrace. It would seem testing the upside is desired from here.

low volume nr7

A volatile beginning and end for the day. After gapping down below the previous day's low, the SPY ended the day as a narrow range bar on lower volume that barely filled the gap left from last Thursday.The 15-min range tried mighty hard to stay above our intact regression channel that's been in place for this whole counter-trend move. We got 4 tags of the 20-EMA throughout the day, while towards the end of the day price rallied to tag the 50-EMA twice before failing. Very choppy and confusing for me.The shorter time frame; In the early morning we had a Double "W" bottom pattern (strategy is to buy the breach of the W's apex). Price stopped at a confluence of S2 and the 50-EMA (on this 5-min chart). The range between 11am and 1pm was sloppy. Price held support twice in an area that corresponded with the "W" apex. The third test broke and led back down below S2. We got another "W"-bottom that failed to breach the apex, though price held the lows of the day. I'm left trying to figure out how I would explain the end of the day volatility.

Nails...broke?

"The firm gave Dykstra a $850,000 bridge loan in November to help his struggling The Players Club magazine meet expenses. That loan was secured with his mansion...But Dykstra allegedly missed making payments, which were supposed to begin in January...Washington Mutual then filed its own notice of default on his $12 million mortgage on March 18...Meanwhile, Dykstra's Gulfstream II was impounded in Cleveland on Feb. 12 after a creditor said the ex-slugger failed to pay $228,000 for interior renovations to it. The work mainly involved the installation of a state-of-the-art entertainment system...The former center fielder also is targeted in a dozen lawsuits by ex-employees and creditors who say they've been stiffed by him."

cnbc

fixcnbc.com

low volume swings

Not much to blog about today; a low volume day in SPY today. The 5-min chart gave us two "First Cross" entries; one short in the morning (red vertical line) and one long later in the afternoon (green vertical line, that would have tested your patience unless you put the order and stop in and walked away, which is what I should have done). There was also a "Slingshot" setup where price made a higher low, momentum made a lower low in momentum and price accelerated after that. In the chart below this setup occurs after the swing low that follows the green vertical line.On a longer time frame (15-min), the most recent 20- & 50-EMA crossovers have been quickly reversed.Looking at the daily chart; where's the momentum? Volume has dropped off, the 3/10 oscillator is drooping, ADX is showing low volatility (a precursor to expansion).

back to the previous day's highs

The opening (5-min chart) gave us a "First Cross" trigger though it's preferable on the open to wait things out to gauge any surprises. The pullback from this trigger ended up being a WR7 (red vertical line) where price wasn't able to recover the opening low or vwap. Things were very choppy down below S1. The bottoming Head and Shoulders pattern formed on a bullish momentum divergence and a buy of the neckline break went pretty smoothly.The second "First Cross" entry long (green vertical line) was at a pretty exhausted level where you could have just targeted pivot resistance. The other markings on the above chart indicate a higher low in price, corresponding with a lower low in momentum, these two guidelines tell me to be on the lookout for a "Slingshot" setup, sure enough! I wasn't expecting that big of a reaction after being lulled to sleep towards the end of the day.
If, based on the 5-min chart you didn't trust the Slingshot setup, looking at the 15-min chart you were getting a "First Cross" setup taking place right around the same time (last green vertical line).
Speaking of "First Cross" setups, here's the 60-min chart where we got a First Cross setup after three hours of trading today (latest green vertical line).If we move higher from here, we certainly have some upside to $87.50 resistance.That is IF we can get beyond the resistance that the S&P500 is sitting at from the end of this week.

end, or beginning, of a trend?

We've certainly been in rally mode for nearly a month now. What should transpire from here is figuring out whether or not this is the beginning of future strength or merely a counter-trend move that will soon exhaust itself. Looking at the Daily SPY chart I wanted to highlight what has happened over the course of the last year.
Looking at the ADX for this market we can clearly see what has followed periods of low volatility (indicated by an ADX less than 20). Currently the SPY ADX is below 20, and that's not to say there can't be more upside, but it's curious because a low ADX reading is something that should give us warning of an impending volatile move or trend (in either direction), as volatility contraction precedes expansion.Taking it even further, here we are from Jan. '07 through March '08:
Looking at an hourly chart of the SPY, we gapped up and found resistance at a previous congestion area around the $84.50 area.As this rally threatened a breach of our regression channel, price has recovered, though found resistance at the midline todaySure we have one more day left in this week, but here's where we stand as of today on the S&P500 weekly chart, very much a critical point.

Reclaiming the 50-EMA

Quite a vicious day today; a strong rally after the gap-down, a sell-off after a test of the highs, and a rally back to close on the highs.
Something I recognized in hindsight today was a "Slingshot" setup taking place on the 15-min SPY chart. Based on the gap down this morning and a swing low from Monday's session we got a higher low in price but a lower low in momentum. Or, if you go by the opening momentum today compared to the opening momentum on Monday you got a bullish momentum divergence (higher low in the macd). So, what that tells us is a stronger momentum push is unable to bring price below the previous swing. Or, the steeper price drop was on weaker momentum which was unable to sustain those lows. All of which equates to a "Slingshot" in price.Here's a look at the same structure but including 24-hours of price activity (pre- and post-market). As an aside, the first chart of the 15-min SPY there were two "First Cross" triggers today. The first was a short (red vertical line) that didn't work out, but the fact that it was a bullish flag sitting on top of 20- & 50-EMA support, wasn't much of a consideration.
The second, (green vertical line long) was triggered after a WR7 that was followed by an nr7 (that was followed by a "Holy Grail trade!) The top of this move displayed a bearish momentum divergence, giving you reason to get out of the trade if you were still long.
At the end of the day our 15-min chart shows us that price closed above a WR7 bar within 2 bars, something which will lead me to look for follow-through on the long side tomorrow.
Checking out the 5-min chart we got one "First Cross" long entry following this morning's bull flag (if you weren't already in it). The Daily SPY chart on the close today gave us a "First Cross" long entry. We'll see if it performs as good on the daily chart as it has been for the 5-min timeframe.

the cost of living in Ca.

Is it worth living here? I'm beginning to weigh the pros and cons.
Does raising taxes really generate the projected state/local revenues, or do people just spend less?
Anyway, my local sales tax is being increased to 8.75%!
"The sales tax is expected to bring in an estimated $5.8-billion..."
Are these expectations based on current spending trends, or do they also take into consideration a likely decrease in overall consumer spending?
In all, Governor and lawmakers agreed to $12.5-billion in tax increases in an attempt to decrease the $42-billion deficit.
On top of a higher sales tax, California will impose a 0.25% increase in personal income tax rates in '09 & '10, AND a 0.5% increase in fees to license vehicles .
Also, there will be a tax increase which will reduce the "dependent care credit parents and caregivers can claim to $99 from $309."
"Governor Schwarzenegger abhors taxes. Always has, always will," said his finance spokesman.

Can't Reclaim the 50EMA

The trend to the upside today seemed indecisive until later in the day (around 1:30EST) after breaking a resistance base. Three "First Cross" signals today; the first green vertical line for a long position was actually triggered based on the open, but it was preferable to wait for a pullback before going long on the close of the 7th bar in this 5-min chart.
The second long (2nd green vertical line) came after an NR7 (pink doji candle before the green line). While the last trigger was given right before the end of the day, so you could possibly have attempted a scalp, but those last 15-minutes of the day can be tricky and untrustworthy.
Meanwhile, on the 15-min chart we got one "First Cross" entry long (most recent green vertical line) that was followed by a buy signal based on the close above the WR7 (blue bar) within the first two bars (I mentioned this strategy in yesterday's post) that was actually an NR7! If you could follow that! I mentioned yesterday the potential for a "Slingshot" setup in today's tape based on the 60-min chart. We did get a snap back move back up to previous resistance and worked really well. Could be approaching the neckline of a Head and Shoulders pattern.The Daily shows a close below the 50-EMA, hard as it may have tried. Leaving us a partial gap fill and doji star type candle that makes me suspect a retest of the trend line directly below.

back below the 50EMA

A gap-down across the board and trend day down. The SPY (5min) gapped down to S3 and early on we got a Descending Triangle breakdown just after 10:30EST. Most of the afternoon was spent in a pretty narrow channel, but for the most part the trend down was pretty symmetrical. We got two "First Cross" triggers today, the first one (green vertical line for a long) was ignored as the slope of the macd average was negative and practically below zero. The other signal (red vertical line short) worked out, but required either quick profit taking skills (a short trailing stop leash) or patience to get the most out of the move (personally I'm in the former camp).
On our 15-min chart we see a total breakdown of our previous trending regression channel (so I started a new channel today), while the 20- & 50-EMAs crossed bearish on Friday. I added a component to my 15-min charts this weekend where the blue candles represent WR7 (widest range of the last 7 bars). The concept behind that is to sell a close lower than (or reverse for longs) the WR7 within the first few candles (preferably within two candles). As you can see, this morning's first 15-min candle was in fact a WR7 and selling the weakness was just like selling a bear-flag set-up.
As an aside, the purple candles on this chart indicate an NR7 - narrowest range of the last 7 candles.
As for a longer perspective, here's the 60-min chart. What I'm going to be on the lookout for is a potential "Slingshot" setup; where we have just put in a higher low, while our momentum indicator put in a lower low; this has the potential to send price higher (even if by higher I mean only a retrace back to our 50-EMA before continuing lower).As far as the Daily is concerned; we closed back below the 50-EMA and look to test the trendline sometime soon, to see if it will hold support.

CHOP

A ridiculously choppy day today in the SPY. For as many "First Cross" triggers that were given today there were just as many reasons not to take them. Here on the 5-min chart, we had an early short trigger (first red vertical line of today's session), however we had a bullish momentum divergence on the low of the morning which turned price around.
The second trigger was valid (first green vertical line of the day's session, and you could have scalped a little out of it, broken even or scratched for a small loss. The next two triggers were the same scenario as the previous long (scalp, break-even, or scratch for a small loss). Nothing seemed to work today, unless you were quick and in scalp mode. There was a "Slingshot" setup short (where the momentum makes a higher high, but price is unable to follow-through and puts in a lower high). This set-up occurred at the right shoulder of the inverted H&S pattern (yet another set-up that didn't fully follow through. My brain hurts from this session today.The 15-min chart showed us a short "First Cross" trigger and a bearish crossover of the 20- & 50-EMA's.

chop fest

A very choppy and confusing day (for me). The initial gap-fill attempt (on SPY) showed some dull volume while the TICK didn't get overly bearish. We got a little inverted head-and-shoulders pattern, but buying the neckline break of the pattern would have tested your patience all through the day.While most of the day was spent in a narrow range channel, there were clear examples of support becoming resistance and resistance becoming support.
In keeping a watch for the "First Cross" strategy, there was a long entry that was given at the first opening candle (so perhaps you could have just waited for a pullback from that level, which would have gotten you in at the early morning double-bottom). While the short entry towards the end of the day (red vertical line) didn't work out. However, notice that there was a "Slingshot" setup where price makes a higher low (in this case it was very marginally higher, almost a precisely equal low) and our momentum oscillator makes a lower low (lower momentum unable to drag price lower), which results in a "slingshot in price.The 15-min chart rode the mid-line as resistance all day long.The S&P500 is at an interesting area, where it looks like it just wants to tag 850 just for the heck of it.Do we get resistance from the trendline, or do we break it and get support?