Tuesday, September 01, 2009

Key support

A quick blog to show the last vestige of this bear market rally. It's the support line coming up from the March and July lows. It crosses this week in the mid 960's. If and when it gets breached, expect worst case scenarios, the proverbial "recognition wave" down.

SPX Daily

SPX Weekly

SPX Daily Renko



Capitalist Anarchist Reductionist said...

This is interesting because those that study historical moves (cycles repeating) and adhere to precision (gann theorists) are writing that the low in March was a final bear-market low for both Indices and the CRB Index.

From that low the Nasdaq Index and Crude have been the strongest leaders in both sectors, respectively.

Secondary low may be made (after this nearly parabolic rise of 50% up in S&P and 130% rise up in Crude from lows)--but Minimum time targets for that secondary low is now somewhere around the 2nd week of October.

So they are heavily still long and waiting for the advance into October.

This is interesting to me to because in strong runups H & S tops are violated and right after the neckline is broken to the downside; the market rejects downside action and goes up relentlessly (the last 6 weeks).

Now we have Neely and Prechter identifying time and price here as 'the' secondary top after the huge run down; predicting large moves down.

Someone is correct; Elliot vs Gann.

The trader just trades the moves--both up and down within the larger context.

Good blog Allan. Keep that Reward:Risk in proper ratio and keep trading tradeable moves.



thomas said...

Steve, interesting what you say.... would you see a possible ...'double bottom' holding at the july bottom, which would propel the market into the end of the year?
I could see that happening. But I'd rather see the double bottom happen at the august 17 dip instead.... the july bottom, to get there from here, seems a bit to 'ominous' to me in these next few weeks heading into october...
the august 17 double bottom would be much more comfortable, and less panicky for the public mind.

Allan said...

Steve and Thomas:

Anything is possible down the line, but the trend is here, in the now.

Capitalist Anarchist Reductionist said...

Yep; here and now.

If I was to spread out my tea leaves I would write that we are in a small wave 2 right now; with wave 3 4 and 5 to complete (higher prices) about 40% into October (in terms of time).

I like to see the big picture from many disciplines (TA/Gann/Cycles/Elliot/Astronumerology); but that don't pay the bills.

As a trader one brings that larger time frame (fractal) DOWN into bite-size tradeable nuggets of time that serve up tasty reward to risk entry points that are manageable from a psychological perspective.

Jeez--that last paragraph I wrote was riddled with 'isms.'

Thomas, within a sector I look at leaders vs laggers (inter-commodity relationships).

So we have Nasdaq 100 as a leader and S&P as lagger in an upmove since March '09.

Big moves ahead--bigger picture says (obviously) increasing volatility UP and INTO early-mid October; how we get there is up to buyers and sellers each day.

Does the market test August or July lows; don't know--I have no preference and like to make my moves several things come together (confluence).

I am just glad the real traders are back at their desks and adding volume.


Anonymous said...

Well Allan, we finally got our daily Renko closing sell...in spades! There now is even a weekly sell if the close on Friday remains below 1000 as shown here:


- cramar

thomas said...

thanks for your thoughts,steve...I like what you re thinking. also like the perspective allan has going here too.
I agree about trading smaller steps in the here and now. but thats hard to do with stocks. I dont trade options or anything sophisticated yet,still being new. but I do trade the forex.
yes,indeed these are delicate times straddling the cliff's edge.

Anonymous said...

Allan, isn't FBS of the SPX daily indicating that there is more volatility to come??