I chose the starting price as the bottom of the large green (momentum) bar, as it marked the beginning of the move up.
Wednesday, February 10, 2010
Dollar extension
I'm a little late on posting this chart, but it's a nice textbook example of a 100% Fibonacci extension out of a bull flag.
I chose the starting price as the bottom of the large green (momentum) bar, as it marked the beginning of the move up.
I chose the starting price as the bottom of the large green (momentum) bar, as it marked the beginning of the move up.
Saturday, February 6, 2010
Measured Moves Down
Here's a look at the indexes (in ETF form) over the past 14-days on a 60-minute time frame. All displaying great examples of Fibonacci Retracement levels and Extensions.
The SPY, a very nice example of a corrective A-B-C wave pattern (though A-B-C on the chart weren't meant as Elliot Wave labels). Direct overhead resistance with the 38.2% retracement (measured off of the 2/3 swing high to 2/5 swing low) which is also the previous support from 1/29 (Support-turned-Resistance?).
Q's showing the 1-2-3 momentum push. Very upward to sideways-sloping consolidation cycles, compared to the others, I wonder what that says about the participants trading it? (btw, the labels 1-2-3-4-5 are not meant to be Elliot Wave counts). Confluence of Resistance at the $43.30 area where 61.8% and -27.2% meet up.
DIA, yet to really "bounce"!? First move would bring it at least to a 38.2% retracement measured off of the 2/3 swing high to 2/5 swing low.
and IWM, looks like just a dumping of shares (ditto DIA) these past 3 days. Watching to see how well it handles overhead resistance at 38.2%, and previous support (turned resistance?) at the 50% retracement
The SPY, a very nice example of a corrective A-B-C wave pattern (though A-B-C on the chart weren't meant as Elliot Wave labels). Direct overhead resistance with the 38.2% retracement (measured off of the 2/3 swing high to 2/5 swing low) which is also the previous support from 1/29 (Support-turned-Resistance?).
Q's showing the 1-2-3 momentum push. Very upward to sideways-sloping consolidation cycles, compared to the others, I wonder what that says about the participants trading it? (btw, the labels 1-2-3-4-5 are not meant to be Elliot Wave counts). Confluence of Resistance at the $43.30 area where 61.8% and -27.2% meet up.
DIA, yet to really "bounce"!? First move would bring it at least to a 38.2% retracement measured off of the 2/3 swing high to 2/5 swing low.
and IWM, looks like just a dumping of shares (ditto DIA) these past 3 days. Watching to see how well it handles overhead resistance at 38.2%, and previous support (turned resistance?) at the 50% retracement
Friday, February 5, 2010
How Nice Was That!?
A stellar late-day rally to close the day (and perhaps this recent downtrend) in a Hammer candlestick (except for the $INDU, which saw a Long-legged, Higher close than open, doji's).
Take a look at the Russell2000 Index, especially what has happened in the past preceding this type of candle pattern.
The close of this day had the feel of more than just a short-covering-into-the-weekend type of day. It had more of a jostling to get on board for what may be a decent bounce into Moday feel.
The SPY hasn't seen this much volume in quite some time:
There's no certainty that we will get a bounce higher on Monday, but the odds do lean that way.
Here's a look back in 2008, when volatility was high, and selling was non-stop (and nervous short-squeezes were common after fresh lows), I outlined what has followed a day where price opened slightly higher, sold off to make new low in the downtrend, then rallied to close higher on the day. On the Q's:
I used the Q's as an example, because the SPY didn't have as many occurrences (Higher open, lower low, higher close in a down trend), but the herd mentality/psychology is the same. Here are some examples from the SPY in '08.
Should we get a sizable bounce from here, and healthy consolidation, we'll have to start watching retracement levels for the possibility of something like this;
Higher Highs, Higher lows! :0 Not saying it's probable, just the possibility.
Take a look at the Russell2000 Index, especially what has happened in the past preceding this type of candle pattern.
The close of this day had the feel of more than just a short-covering-into-the-weekend type of day. It had more of a jostling to get on board for what may be a decent bounce into Moday feel.The SPY hasn't seen this much volume in quite some time:
There's no certainty that we will get a bounce higher on Monday, but the odds do lean that way.Here's a look back in 2008, when volatility was high, and selling was non-stop (and nervous short-squeezes were common after fresh lows), I outlined what has followed a day where price opened slightly higher, sold off to make new low in the downtrend, then rallied to close higher on the day. On the Q's:
I used the Q's as an example, because the SPY didn't have as many occurrences (Higher open, lower low, higher close in a down trend), but the herd mentality/psychology is the same. Here are some examples from the SPY in '08.
Should we get a sizable bounce from here, and healthy consolidation, we'll have to start watching retracement levels for the possibility of something like this;
Higher Highs, Higher lows! :0 Not saying it's probable, just the possibility.
Thursday, February 4, 2010
LOL
Predictable, no?
If it wasn't for that mentally significant level of support below, this market looks rearin' for continuation. A First Cross sell signal being triggered across the board, on higher volume today:
Gold was down big today. With all the news of Dollar strength bringing down commodities, Gold just naturally seemed due for a pullback, and this chart (using GLD as a proxy) still looks fairly healthy.
and should it pull back further, $100 ($1000/ounce spot market), or even $96, could bring in renewed buying on a Resistance becomes Support bounce test.
If it wasn't for that mentally significant level of support below, this market looks rearin' for continuation. A First Cross sell signal being triggered across the board, on higher volume today:
Gold was down big today. With all the news of Dollar strength bringing down commodities, Gold just naturally seemed due for a pullback, and this chart (using GLD as a proxy) still looks fairly healthy.
and should it pull back further, $100 ($1000/ounce spot market), or even $96, could bring in renewed buying on a Resistance becomes Support bounce test.
Wednesday, February 3, 2010
Harami Cross
The SPY ended the day in a Harami Cross reversal pattern (likewise the DIA) on the lightest volume we've seen in 10 sessions. Being that a doji represents indecision, the more indecision and uncertainty in the market the more likelihood a change in price direction and tempo. A lot of charts have this similar look, where price is coming up into a down-sloping 20- & 50 -EMA that are about to cross under or already have. Things still look weak.
The 5-min SPY showed some nice examples of Inverted and Regular Cycles (referring to this post on Stevenson Price and Time Targets). You can think of a Regular Cycle as a phase which sees Accumulation followed by Distribution, and an Inverted Cycles as a phase of Distribution followed by Accumulation, which is all the "tape" really is.
The large cycle in the middle of the chart (33-bars in length) actually contained a number of smaller cycles, lending to the extension of this particular cycle (mid-day noise = lower time-frame cycles are dominant?). Here's a close-up of that 3-hour period:
The 5-min SPY showed some nice examples of Inverted and Regular Cycles (referring to this post on Stevenson Price and Time Targets). You can think of a Regular Cycle as a phase which sees Accumulation followed by Distribution, and an Inverted Cycles as a phase of Distribution followed by Accumulation, which is all the "tape" really is.
The large cycle in the middle of the chart (33-bars in length) actually contained a number of smaller cycles, lending to the extension of this particular cycle (mid-day noise = lower time-frame cycles are dominant?). Here's a close-up of that 3-hour period:
Tuesday, February 2, 2010
Here's where it get's interesting
So, provided Friday was the "bottom" of the most recent correction, here's where the S&P500 Index stands on a weekly basis since March of '09:
Price has put in a higher low and sold off around 6.3%. Fairly average in the context of the '09-'10 rally.
Off of Friday's low, price has recovered nearly 40% in two days. Directly overhead is a key level of potential resistance wedged right between the 50% - 61.8% retracement zone, the convergence of the 20- & 50EMA's (Yellow and Red line) and for argument's sake of which is better, the Exponential Moving Average, or the Simple Moving Average, I've included both (20- & 50-SMA are in Green and Blue).
However, we have seen this before....there was July '09, when price blew right through this confluence.
Everyone seems to be anticipating January 19th as being the "top," but there's a fine line between retracement off of a momentum move and a (yet another) run-the-stops short squeeze up to fresh highs. It shouldn't be long before we find out which it will be.
Price has put in a higher low and sold off around 6.3%. Fairly average in the context of the '09-'10 rally.Off of Friday's low, price has recovered nearly 40% in two days. Directly overhead is a key level of potential resistance wedged right between the 50% - 61.8% retracement zone, the convergence of the 20- & 50EMA's (Yellow and Red line) and for argument's sake of which is better, the Exponential Moving Average, or the Simple Moving Average, I've included both (20- & 50-SMA are in Green and Blue).
However, we have seen this before....there was July '09, when price blew right through this confluence.
Everyone seems to be anticipating January 19th as being the "top," but there's a fine line between retracement off of a momentum move and a (yet another) run-the-stops short squeeze up to fresh highs. It shouldn't be long before we find out which it will be.
XOM
Exxon Mobil (XOM) was upgraded today after earnings yesterday that announced a 23% haircut in profits from the previous year (a mere $6-billion dollar profit). So, is it coincidence that they are today upgraded (currently the stock price isn't behaving like it has had good news), or could the timing get any better in order to help institutions lighten up their holdings in this issue now while they still can?
Here's a chart going back to 1968 that speaks volumes in terms of being close to an inflection point:
and zoom in a little closer
Perhaps it could bounce from here after hitting lows last week not seen since March '08. However, this stock has been under the thumb of the 200-MA for nearly two years now, and while bounces out of the $64-range have been common, they're not drawing as much buying as they once did. It will be interesting to watch what develops.
Here's a chart going back to 1968 that speaks volumes in terms of being close to an inflection point:
and zoom in a little closer
Perhaps it could bounce from here after hitting lows last week not seen since March '08. However, this stock has been under the thumb of the 200-MA for nearly two years now, and while bounces out of the $64-range have been common, they're not drawing as much buying as they once did. It will be interesting to watch what develops.
Monday, February 1, 2010
What is it?
FSLR:
A Bear flag that's forming right underneath previous support?
A Bullish Wolfe Wave? Though price is in the "sweet spot," volume isn't too spectacular yet. Perfect cycle symmetry in points 1-3-5, a target would put price back to it's most recent swing high (depends on how strong the broad markets are I suppose). It could even turn out the 5-point breaks down further into the sweet spot and leaves the bullish wolfe wave still valid.
or, is it a stalled Descending Triangle breakdown that can go either way from here?
Beats me....Price has backed away quickly from $120 these past two sessions. 
However, price being sold heavily at $120 could just reflect positions being covered off of the previous drop and recent lows. We could just drift back up to $125, after all it has shed a lot of "value" in a quick period of time.
A Bear flag that's forming right underneath previous support?
A Bullish Wolfe Wave? Though price is in the "sweet spot," volume isn't too spectacular yet. Perfect cycle symmetry in points 1-3-5, a target would put price back to it's most recent swing high (depends on how strong the broad markets are I suppose). It could even turn out the 5-point breaks down further into the sweet spot and leaves the bullish wolfe wave still valid.
or, is it a stalled Descending Triangle breakdown that can go either way from here?
Beats me....Price has backed away quickly from $120 these past two sessions. 
However, price being sold heavily at $120 could just reflect positions being covered off of the previous drop and recent lows. We could just drift back up to $125, after all it has shed a lot of "value" in a quick period of time.
Friday, January 29, 2010
log form
As we end the trading month of January, here's a look at some monthly charts, in log format:
Dow Jones Industrial Average:
S&P500
Nasdaq Composite:
Russell2000:
and finally, the U.S. Dollar Index:
Dow Jones Industrial Average:
S&P500
Nasdaq Composite:
Russell2000:
and finally, the U.S. Dollar Index:
Thursday, January 28, 2010
solar flags
In a previous post I mentioned FSLR as it was approaching a level of long-running support. Here's a look at the weekly:
This week in FSLR has essentially been range-bound and looks to be setting up a bear flag (though the past two candles have been hammer's with very similar open and closing prices):
The $111 range has been bought swiftly 3 times this week, so if it's tested again we should look to gauge strength or weakness in the momentum/pace behind any ensuing bounce. Price above $116 (above the "W-bottom" apex) and we could look for a test of $118-$120.
Similarly, there's TSL. This stock has seen an amazing rally of around 1100% from the Dec.'08 lows (is that math right!?). Anyway, from it's highs back in July '07 TSL retraced 78.6% of it's losses in 1-year's time.
Immediately below current price levels is the 38.2% retracement off of the '08 lows to '10 highs.
The daily chart looks to be forming a bear flag, in which case if price breaks down from here there's a confluence of Fibonacci support (Fibonacci retracement from low to high and Fibonacci extension from high-low-high of the flag pattern) at the 50% ($17) and 61.8% ($13.50) levels.
Price seemed to have based upward all week along the lower edge of this bear flag, watch for a break down out of $22.
Similar patterns are also occurring in STP, and if you're into the penny stocks, ESLR.
This week in FSLR has essentially been range-bound and looks to be setting up a bear flag (though the past two candles have been hammer's with very similar open and closing prices):
The $111 range has been bought swiftly 3 times this week, so if it's tested again we should look to gauge strength or weakness in the momentum/pace behind any ensuing bounce. Price above $116 (above the "W-bottom" apex) and we could look for a test of $118-$120.
Similarly, there's TSL. This stock has seen an amazing rally of around 1100% from the Dec.'08 lows (is that math right!?). Anyway, from it's highs back in July '07 TSL retraced 78.6% of it's losses in 1-year's time.
Immediately below current price levels is the 38.2% retracement off of the '08 lows to '10 highs.
The daily chart looks to be forming a bear flag, in which case if price breaks down from here there's a confluence of Fibonacci support (Fibonacci retracement from low to high and Fibonacci extension from high-low-high of the flag pattern) at the 50% ($17) and 61.8% ($13.50) levels.
Price seemed to have based upward all week along the lower edge of this bear flag, watch for a break down out of $22.
Similar patterns are also occurring in STP, and if you're into the penny stocks, ESLR.
so much for a bounce
Lower lows, lower close.
The SPY put in another decent volume selling day. In these past two weeks the SPY has had 3-days of 300-million+ volume. Only two other days going back to May of '08 have had volume over this mark.
Also, our momentum indicator has gone negative (the slow line, a.k.a. the "Stability of Trend" -line crossing below zero). This has happened on three other occasions since March. When this happens we would look for the fast line to correct back into this slow line, where we would look to enter short once a lower high has been established ("First Cross" sell signal). On the chart below we have only really had one official First Cross sell signal, that one being back in June/July (first ellipse). The second and third time the slow line went negative, price quickly recovered with strong momentum to the upside.
The S&P closed right above support (1084).
Perhaps we'll get a Dow 10k test tomorrow?
The Russell2000 could have some support underneath it:
The Nasdaq had a bad day today
The SPY put in another decent volume selling day. In these past two weeks the SPY has had 3-days of 300-million+ volume. Only two other days going back to May of '08 have had volume over this mark.
Also, our momentum indicator has gone negative (the slow line, a.k.a. the "Stability of Trend" -line crossing below zero). This has happened on three other occasions since March. When this happens we would look for the fast line to correct back into this slow line, where we would look to enter short once a lower high has been established ("First Cross" sell signal). On the chart below we have only really had one official First Cross sell signal, that one being back in June/July (first ellipse). The second and third time the slow line went negative, price quickly recovered with strong momentum to the upside.
The S&P closed right above support (1084).
Perhaps we'll get a Dow 10k test tomorrow?
The Russell2000 could have some support underneath it:
The Nasdaq had a bad day today
Wednesday, January 27, 2010
AIG $25
Can AIG recover and hold $25?!
Here's a look at AIG going back to the 70's.
Here's where we stand for now
We came close to closing in a Hammer candle today, and though the volume wasn't as strong as this issue has seen in the past, it was reasonably high today, with a big order coming in to rescue it from the abyss. Watch the follow-through develop from here to see what kind of a bounce this order manifests. Direct overhead resistance at $25, support now at $23.
It could make an attempt for $28 if it can get the momentum behind it (not a necessarily favorable risk:reward ratio), but it will obviously be affected by any news that may come up.
Here's a look at AIG going back to the 70's.
Here's where we stand for now
We came close to closing in a Hammer candle today, and though the volume wasn't as strong as this issue has seen in the past, it was reasonably high today, with a big order coming in to rescue it from the abyss. Watch the follow-through develop from here to see what kind of a bounce this order manifests. Direct overhead resistance at $25, support now at $23.
It could make an attempt for $28 if it can get the momentum behind it (not a necessarily favorable risk:reward ratio), but it will obviously be affected by any news that may come up.
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