Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
Keene Little : 12/24/2007 12:21:06 AM

e-mini futures contracts you'll see traded on the Monitor and the current front month:
DOW 30 (YM), March
S&P 500 (ES), March
Nasdaq 100 (NQ), March
Russell 2000 (ER--may be different on your charts, such as ER2), March
10-year Note (ZN), March
30-year Bond (ZB), March
Gold (YG), February
Silver (YI), March
Oil (QM), February

Keene Little : 12/23/2007 11:59:23 PM

Monday's pivot tables: Link and Link

SPX has found 1490 to be strong support/resistance this year and now it's only a stone's throw from Friday's closing price to this potential resistance. There's also strong Fib resistance in the 1490 area: the 2nd leg up from last Tuesday's low is 162% of the 1st leg up at 1490; the 50% retracement of the Oct-Nov decline is just above 1491; and the 62% retracement of the decline from December 11th is just above 1490.

But before SPX can even get to that level it has to get through the 50, 100 and 200-dma's co-located at 1486-1488, just above Friday's closing price of 1484.46. The price pattern has been nothing but 3-wave moves up and down and that leaves several possibilities for the next big market move. But it's generally a bullish week so if SPX can get above the 1490-1492 area it should be able to rally up to its downtrend line from October, currently near 1510.
SPX 60-min: Link
SPX daily: Link

The daily chart shows the multiple possibilities and a new one that I'm going to be watching for more carefully, shown in light green. This wave count calls the price action since the July high as a large sideways triangle. The triangle consists of waves A-B-C-D-E and wave E might have completed at last Tuesday's low (in which case we'll rally to new market highs from here) or it will drop down for one more test of the lower line of the triangle, near 1420, before rallying strong in January.

Bears stay aware of this possibility when planning longer term trades. Bears need a break below the November low to put this back on a bearish wave count. For now the bulls are back even if it first dips down to 1420. The DOW's possibilities are the same--resistance is from Friday's closing prices (50 and 100-dma and broken uptrend line from July 2006): Link . Slightly higher is the 50% retracement of the Oct-Nov decline at 13461 and then the 62% retracement of the decline from December 11th at 13515.

The Nasdaq looks like it needs to stair-step higher before it's ready for a pullback or decline. The only thing preventing a rally up to the Fib projection at 2748 (two equal legs up from the Nov 26th low) will be the resistance levels mentioned for the DOW and SPX: Link

The bulls want to see some stronger market internals than we've seen thus far in the rally attempt. I've mentioned a few times during the rallies that the number of new 52-week lows continues to exceed new highs. Even after Friday's strong rally the number of new lows beat out new highs 462 to 273. The Nasdaq had a strong rally but had 185 new lows to 135 new highs. The NYSE, up +1.7% today, had 207 new lows to 100 new highs. This needs to turn around if the bulls want to see a sustainable and stronger rally.

OI Technical Staff : 12/23/2007 9:59:59 PM

The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Market Monitor Archives