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Keene Little : 9/4/2006 10:44:16 PM

I had posted earlier today (Monday) that I still liked ES 1316 for a short (the one I wanted Friday afternoon) and decided to take a small position short today and keep my stop a little wider than normal at 1320. We'll see if it survives an overnight or early morning push higher.

The move up on Friday had the makings of a nice 5-wave move which would signal either the end of the run up from Aug 23rd (in a more complicated EW double zig-zag pattern) or at least that a pullback was coming. I liked the Fib projection of 1316.25 for the end of the move which would also be a slight over-throw of the ascending wedge created last week. Link

It's probably a smart play to wait for an early morning push higher and try shorting an early spike up. The risk of course is that an early rally will just keep going. But a small position with a wider stop at least improves my chances.

Keene Little : 9/4/2006 10:42:05 PM

Tuesday's pivot tables: Link and Link

OI Technical Staff : 9/4/2006 9:59:59 PM

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Marc Eckelberry : 9/4/2006 9:04:58 PM

The crowd will jump in with both feet tomorrow, but they might get a surprise. VXN is about to reverse to the upside and flashing warning signs: any bad news and this market will not be happy. Right now there is none, but that can change. Keep an eye on TD 6 which could become cat 3 or 4 hurricane Florence by the weekend. QM has R at 68.60, but a push above puts it back in business, although I am not comfortable chasing that one quite yet. One last hurrah for oil before it sinks to the low 60's in October is not out of the question.
Watch NQ 1601.75 gap close July 3rd, although trendline R from April is at 1596 and still holding NQ back. Short from 1595.25 is still open, although stops should be tightened or exit if you are not comfortable overnight (they will go for the stops). There is upside risk to NQ 1620/1622 on a break above 1602, so don't go short in that zone, although I think NQ 1620 will be a solid short play if hit. The day session will tell me more as I am looking at SMH 200 ema R at 34.30. That is my area of concern as the weakness on Thursday and Friday in the semis is a bearish divergence. The swing long to 1620 is just as valid a play, but be quick and put stops at 1588 if you are chasing this. My bias will be to find another short entry higher (1620) if stopped out, but I might scalp it long briefly. Watch those semis!

Keene Little : 9/4/2006 7:08:53 PM

I had mentioned Friday afternoon that I liked ES 1316 for a short and wanted a small position with a wider stop (1320). I still like that play and therefore went short today at 1316. I'll keep my stop at 1320 and hope for the best overnight.

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