Pre Market TAO Tues 7-14-09

ES Futures are flat 902 -891
usd bottom of multiweek range
gold flat
crude up a bit
Asia/ Europe up

Spy looks to open flat
Today is the critical day based on the post i did over the weekend. The RED dot
------------------------------------------------------------------------------------------
There are days where there is no trade . Spy dropped briefly into yesterday range ( failed break out down) and pop back up to the open range and twiddled around Banging up against the 60 min 200ema all day. and closed at bottom of day range. we will keep an eye on the overnight es and the usd.

NYSE Tick Strong Up Trend Day Mon 7-13-09

A Strong up trend day will stay in the upper range of the Nyse Tick chart ..This is a one day 2 min time frame. Notice how the bulk of the trading is above the red zero line . And particularly notice the 9 big buyer spikes above the +1000 line.

XLF Divergence Mon 7-13-09

Pre Market TAO Mon 7-13-09

ES Futures are testing their 881 high resistance area ...
gold / crude down . Us Dollar flat to up.
At the open SPY gaped up and has quickly sold off down to Friday lows so .
tick is neg -800 ..
Sectors are mixed.
I f this low holds we may see another range day.
-----------------------------------------------------------------------------------
10:44 et am .......back at top of range entered short spy 8850
--------------------------------------------------------------------
1:49 et pm ....nice bounce off the bottom ...I have to confess I was not properly prepared to trade this am....had internet trouble and finally got it up 15 min before open.... this trade goes to show if you're not repaired.....don't trade!......I missed the double bottom the ES futures put in over nite and hadn't looked hard at the US Dollar activity overnight either. If i had invested a little more time in analysis, I would have caught it . On top of that, my Nyse feed was not streaming in properly. But i assumed the day would be a range . BOY ! did I screw up! So this trade turned in to a loser so far. Sectors have traded uo into last weeks upper range but are starting to build divergence . xlf has been the big leader today but on ever decreasing volume from open . half the sectors are starting to show signs of over bought as well... this looks like a C wave 138% of A wave but if it gets above 162% it is most likely a wave 3 to the up side. So we wait .
-----------------------------------------------------------------------------------
close.... Well I have to say I completely missed the buss on today's session.. but as i have said before trading is all about managing risk (hiding behind good market structures for stops is one key protection strategy ) and appropriate size trade position amounts. I have been trading with a (1 size / 2 X / 3 X) scale in approach with a stop above the closest structure I don't think the market will go beyond that day.

Today was no different except at the top of the daily range 8850 with a stop above 8900, I took a 1 position thinking we had a range day. To my disappointment it moved against me. Abruptly!

The market moved quickly to the stop and it looked to be a reversal point so i took a 2 position thinking we have a range top of Friday . The next stop point 9011 is the last week high and the top of a very extended wave C. Could price go there? In a down trend not so likely. So in I jump in deeper.

At the close, Spy is at the top of last weeks high and the top of a very extended wave C almost ready to be a wave 3 .. today was a big day. Could it go higher? Yes It can but every sector now looks very over bought and extended for today ... It looks like we will get a turn down in the AM so I decided to move in with the 3 position and a stop just above the close 9010 .... so if the market opens up with a gap up then I'm stopped out at an average account loss. But if the market opens down and follows through , the loss will be less or even to break even.

Complex Head and Shoulder Pattern

Complex Head and Shoulder patterns are rare but when they happen it takes every one buy surprise.

The reason is the bulls interpret the failure of the first right shoulder as a reason to get very bullish as the price starts to rise to the 2nd shoulder peak.

The bears who are very heavily short get squeezed out and start throwing their positions over board. The squeeze causes the price to spike higher and the bulls buy more .

Bang! Peak 2 rolls over and everyone gets beat up.

According to Bulkowski's book, on a scale of 1 to21 ( 1 being the best) this Pattern is a 3 and has a high potential of reaching the target zone.. once the neck line is broken.

This chart is a percent comparison of the three major markets Dow /Naz / S&P .
All three put in 2 left shoulders and a head. We are now waiting for their right 1st and 2nd to finish. As you can see, the 1st right shoulder is about to be or has completed in all three markets now we wait for the 2nd one to form.

Good chart patterns will always be well defined and have balanced appearance when completed . They are like anything beautiful. They look right and you just know it when you see it.

Based on this analysis, I expect to be long Spy Monday Am up to the top of range of the left shoulders. Then I will become a bear again Wed or Thurs.

Simplicity .......SPY Monthly 07-09

Simplicity

As a Day Trader it easy to get caught up in the microscopic fractal world of minutes and hours. But to observe a necessary law of nature, just simply go stand on the California cliffs and watch the sun go down. From this lofty vista, it is where you realize even the ocean waves have structure.

This a Monthly chart of SPY. Observe the peaks, they are fundamentally identical. I'm not going to tell you what I see because I believe you see the same thing.

NeboXian's Weekly Tao / SPX Hot Spot!

Something is going to happen on or after the 14Th . Every thing is converging on this Red hot spot... Harmonic trend lines, fib time series, fib fan, a concentration of 5 fib lines (not shown), support/ resistance zone. Not to mention all the planets in the solar system. All indicating what looks like a final peak of a complex H & S formation. Monday and Tuesday of OX week are usually bullish. This could be a 2 day rally up to the SPOT.

When the market gods hand out a gift this obvious, I have learned my lessons the hard way. So this week, I closed out all my positions and I am sitting on the side waiting for the next move. Besides the closest short stop loss hideout is 50 spx points above the red dot. And the best long stop is the abyss below.

I think I will take some of my SPY fish'n bait money I made last week and go to the lake and wait until lord market reveals his mighty hand.

Spy Head and Shoulder Patern 7-10-09

Here is a Head and Shoulders target zone chart .
This pattern has a 60% chance of reaching the red zone.
Valid price movement is when a candle is completed and there is an open and close at key levels...the wicks are important as well but the big money is more concerned with open and close price. Although price has broken neck line, today was the first significant open and close below neck.....now we need to see a big push to the down side with a big spike in volume to really get this pattern completion .

Pre Market TAO Friday 7-10-09

ES Futures overnight traded down 879 to 870 Morties W4 Bottom
US Dollar is up
10 yr Treasury / up
gold / crude/ nat gas / down
Asia / Euro stk /down

Spy will open large gap down to 87.75 ish

my plan is to trade the gap low and go long in the first 15 min ....if this don't work out, we can blame Mortie...heee heee..... the target will be m3 8850 -8875 area... above the pivot 8810.
.........................................................................................................................................................

9:55 et am ....wow ...that was a fast gap recovery! I couldn't get on the Bus at the open but it looks like it is gona come back and get me ... got a long entry at 8790
----------------------------------------------------------------------------------------------
10:10 et am .... That Mich sentiment report was a sour note but what would we expect from Mich . Tick went bearish but price is holding so far...

------------------------------------------------------------------------------------
10 :16 am ....looks like teck xlk and xly are taking the lead this am but there is a split in the major mkts Naz is lead on the way up Dow and SP are lagging
Energy and financial's haven't moved up to fill gap yet.
-------------------------------------------------------------------------------
10:30 am et ..........a consolidation with a dec volume is a correction ....looks like a bull flag is forming on the 5 min spy
-----------------------------------------------------------------------------------
10:40 et am I am not happy with what i am seeing in xle and xlf and the other sectors are starting to soften up as well.... the tick has been all over the map... and ES is bang'n it's head on yesterday's 879 resistance zone..... we could be in for another range day .
----------------------------------------------------------------------------------------------
11:20 et am ... I really think the market will rebound a bit once Europe is closed down .... but this don't look good for a + pivot move ...just broke and closed below gap low and sitting on m1...all sectors are weak and selling into yesterday low range....
-------------------------------------------------------------------
11:33 et am..... ES just tested it's overnight low 870 and spy is reversing maybe the sun will come out now. Looks like the ABC wave off of yesterday high is complete ...... lets hope this is not a 3rd wave impulse but it could be , cause it sure dosen't look corrective to me.. the next 30 min's will tell the truth.
-----------------------------------------------------------------------------
12:00et pm.....starting to see a pos divergence build in xle and xlf and xlk ....
----------------------------------------------------------------------------------------------
1:00 et pm...... Xle and Xlf are back up testing gap resistance and so far wave 1 is looking good with a interday trend break to the up side.
-----------------------------------------------------------------------------------------
1:30 et pm spy is testing yesterday 8805 support it needs to break thru here for any more up side ...... past support zones become future resistance .. for the past 90 min's the tick shows many more buyers than sellers a bullish bias.
---------------------------------------------------------------------------------------
1:45 et pm ...all sectors just had a broad base up pulse . this may be a good sign...
whenever there is a break in a past support line the first thing that happens is a wave of bulls who got trapped will sell ( the get me out bunch) the tell is the strength of the pulse down ... this one was weak so the market maybe running out of sellers here. This is a very thin market today and any thing could happen into the close .... I want to be out by 3pm et...
-----------------------------------------------------------------------------------
2:00 spy just broke and is testing yesterday range low support and is above the vwap. If it holds we could get more upside..
---------------------------------------------------------------------------------------
2:55 et pm ..... big hitters step'n up to the plate here with some +1000 ticks..... let's see if there is any follow through...
--------------------------------------------------------------------------------------
3:15 et pm Getting good pos ticks but price is not responding here so I am not gona stick around and watch the last hour ....closing out my long here at a break even ..... spy 8790.....we are under the vwap so the risk is to the down side from here on to the close.

Pre Market TAO Thurs 7-9-09

ES futures are trading back up in top of yesterday range ..US Dollar is down ....10 yr Treasury is up.

Gold / crude / nat gas all up

Asia mixed / Euro stks up

reports
jobs claims are less than expected 565 k vs 603 k

Earnings a/c cvx and infy

spy looks set to gap up at open in to heavy resistance ....could go both ways this am I will watch the first 30 min...
-------------------------------------------------------------------
10:00 et am........ sectors are split ....and Nyse Tick is neutral this may be a range day ..price gaped up and bounced on yesterday close .ES futures are trading down . spy is oscillating around pivot 8800 and vwap.
----------------------------------------------------------------------------------
10:15 et am .....entered short at spy 8850 ...stop above 8875.....target 8725

----------------------------------------------------------------------------------------
The Spin machine is running full speed today here is an article from Hedge Accordingly. This expresses my thoughts very well . The media is not your friend! Be very careful about what kind of crap you let them dump into your head.
------------------------------------------------------------------------------------------------
11:02 et am ....spy is consolidating in a asymmetrical triangle.. and is at the apex ...we wait for a break.
-----------------------------------------------------------
11:20 et am ....spy is morphing in to a bull flag? closed out my short at 8800 .. I am gona wait to let the market tell me what to do.
-----------------------------------------------------------
12:04 et pm ....Neg divergence are building in xle / xlf / xli / xlb...we short the next up impulse
----------------------------------------------------------------------------------------------
12:30 et pm .....short spy 8855 ....... the xle is very extended ....the ole cvx pump and dump is in play... haven't turned on cnbc today but I'll bet they have been do'n the Dennis Kneale all day ...can't stand to listen to the constant over sell.
--------------------------------------------------------------------------------------------
1:50 et pm......... spy has worked hard to test the H&S neck line at 8880 ....xle continues to show divergence but now starting to roll over... This is clearly the leading sector up today but will it lead the the others down as well? We may have a bit of a drift sideways to the close.
The ES Futures has tested the 882 SIX times and failed ..How much more can it take?
-------------------------------------------------------------------------------------------------2:45 2:30 et pm ......spy 8888 Twin Double Hammer Doji's at top of range on 15 min chart ...that's got to be good for a reversal......
------------------------------------------------------------------
The energy Bulls look like they are trying to buy everything that appears to be a dip...
------------------------------------------------------------------------------------------
3:20 et pm .....the final hour of trade has perplexed me for the past few months....so I solve this buy asking my self " Would I want to be long or short here if i where to take the trade now?" Well I definitely would not want to be long.... today
---------------------------------------------------------------------------------------
3:45 et pm .....closed out my short on that last pulse down 8820 for fish'n bait change. I think I would have had more fun if I had gone fish'n.