YM, ES and DJIA Analysis

[DbPhoenix 42]

Perhaps it would be more appropriate to post these questions to the forum where the comments were originally made, though it's entirely up to James et al. My only reason for posting here in the first place was to find out what was on James' mind when he was approaching support.

[zeon 10]

Perhaps it would be more appropriate to post these questions to the forum where the comments were originally made, though it's entirely up to James et al. My only reason for posting here in the first place was to find out what was on James' mind when he was approaching support.

 

I don't know, this thread is about YM/ES analysis after all?

Anyway, it's not up to be to decide what should be where, but I hope the discussion can focus on the content of the posts and not the location of them.

[james_gsx 16]

So, what's everyones thoughts going into this week? I have a "feeling" we will break resistance at 1400 and have a nice rally. But obviously, that doesn't work. We have 3 dojis against some major resistance and the 100 EMA. It's basically the same for all indexes, so I will only show the ES.

 

We also have declining volume during the rally. Overall, I would imagine this looks bearish. But I could also be looking at this from a bearish bias. Thoughts?

 

 

[BlowFish 10]

My 'gut' is saying the same as yours. That whole longer term R area round 1400 has not really been 'rejected' and it looks as if the little ledge here on the daly could be setting up for a push at it. Guess we'll know soon enough.

 

The FTSE opened up over a key level (though it had previousy closed banging its head against it) and has been going sideways this morning sitting on top. I'm not sure about the other European indexes, I'll take a look at the DAX later.

[MC 10]

Long term investing right now could be an incredible place to be, I feel the market has a VERY good shot at breaking into bull trend mode again soon. In January I predicted the 14k dow level to be tested (if not smashed) this year, let's see how much doom n' gloom is left and if I'm really crazy.

 

Here's the monthly where we have a nice channel we are in. Why would I call this a correction and not a bear market? Well for one the upwards channel has held up thus far and on top of that the 8ma hasn't crossed below the 21ma. We have been and are still in a "bear trend" but a bear market to me is not a accurate assessment yet. The 50ma and trend line are acting as confluent support. Note the ATR curling down which is often a sign of bullishness. ATR goes up when emotion is injected in the game by gloomy news to shake people out of shares.

 

The wedge we are in looks more descending to me. SO the path of least resistance technically is down. That being said the range is getting tight and much of my other evidence points up. The macd is near crossing for the bulls. Watch for the downtrend line and 21ma along with structure resistance to break. The worst should be over if we can break all those down. The next hurdle will be the 50ma.

 

The uptrend that's held so far actually stems back to late 2001. Yes the y2k bear broke the line down but TA is an art. Don't think that a trendline can't be broken yet remain valid. Look at how many times we have successfully tested this trendline, that cannot be ignored. Support wise we are backed by the confluent 200ma and trendline. Volume is concentrated at the bottoms which is accumulation, also the volume has decreased as the price has taken out new lows which shows selling could be drying up. On the mini runs the volume is pretty light so it appears they are not flipping and that confirms accumulation IMO. I do my analysis from the top down, starting with monthly and then getting more granular. Why is simple, because look at a daily chart and you will get whipsawed to hell. You need to go out further to reduce the noise on the charts.

 

As always JMHO

MC

[DbPhoenix 42]

I don't know if these will be of any interest to anyone, but I don't know where else to put them, and it does pay to look at the sectors in addition to the indexes.

 

I'm leaving these as thumbnails since there are so many. I hope they're self-explanatory. If not, please ask.

[brownsfan019 17]

Daily ES looking very bearish. You can just feel a big pop coming soon. Call it what you will - coiling effect, accumulation, test of highs, etc. - but this thing is setting up for a nice move. It looks bearish and I would stay bearish if trading on the daily. Gotta get to bed or would post a chart, but just pull up a daily ES and seeing some bearish looking patterns at/near a resistance point in my eyes. This thing is going to bust soon...

 

I know, how arbitrary is that. Point is a couple days of doji/spinning tops tells us candle traders that there is some indecision going on of where the next move is/could be. Bulls and bears are looking for a reason to act.

[james_gsx 16]

The charts look bearish, but I do think it could go either way. Waiting for that confirmation is crucial in times like this. You could get lucky - but try it again in the future to guess which way it will go and you'll most likely give all your money back.

 

Notice the gravestone doji on the ES. I also threw in the 15min chart. Notice how we opened and had a steady decline in volume, then as we sold off volume actually picked up.

 

 

[BlowFish 10]

One thing that makes me chuckle is how some commentators say things like "if it breaks 1350 its going down". Well duh 1350 is below us!

 

In that great spirit I'm going to say much the same that 50-60 area provided a minor obstacle on the way up about 10 days back and will need to be broken to go down (well duuuh). To confirm the downtrend is still intact we need to take out the January low. That little prod mid march I would call a double bottom even though it exceeded Jan's low by a point or two.

 

Will be interesting to see if it breaks today. Note to self when a strong break shows up intraday jump on and hold tight.

[DbPhoenix 42]

For myself, I look for evidence that the trading range we've been in since mid-January won't continue, since that would be the norm, i.e., yet another round-trip back to support. That is, after all, the way these things go. If prices do break out to the upside, fine. But what puzzles me is why those who purport to believe in selling strength suddenly now are counseling to buy it.

[brownsfan019 17]

I love this short opportunity here... just looks so bearish on the daily. Put up a daily with bollingers, keltners, whatever your heart desires and it appears we are trying to test this overhead resistance w/o success.

 

And more importantly, the risk/reward here is PHENOMENAL. You are looking at opportunities to short with a small stop in comparison to profit targets.

 

Trading is about putting the odds in your favor and I think overall, this is a very nice looking short on the daily. As always, do your own homework before placing any real money at risk.

[BlowFish 10]

Have to say as we are up close to Resistance short is the only trade that makes sense from an R:R point of view. The only thing I don't like is that there has not been better price rejection. A couple of nice long upper wicks is more comfortable to me (not that I trade the daily).

[james_gsx 16]

Volume picking up to the short side, I think we'll test 1360 soon and see how that holds.

[DbPhoenix 42]

Yep, right back to the April lows.....

[trader273 10]

Have to say as we are up close to Resistance short is the only trade that makes sense from an R:R point of view. The only thing I don't like is that there has not been better price rejection. A couple of nice long upper wicks is more comfortable to me (not that I trade the daily).

 

I guess it all comes down to how you are viewing the Support and Resistance. If viewing only on a daily it would appear that there are not many upper shadows, but if you view it in a context of daily and weekly, you will see that sellers are apparently at this level.

[james_gsx 16]

ANOTHER doji/spinningtop/hammer/boring day!

 

So instead of staring at these, I broke down the 5 and 15 min charts. Something interesting came up. We had a nice rally on both the 5 and 15, and that trend has broken. Notice volume on the 15 min chart, it decreased as price went up and increased as price went down. Then when that trend broke, volume really increased. Maybe someone with some VSA knowledge can chime in, or else I'll just assume sellers bullied the buyers in the CME playground.

 

 

[DbPhoenix 42]

Maybe someone with some VSA knowledge can chime in, or else I'll just assume sellers bullied the buyers in the CME playground.

 

Be careful what you wish for

 

Getting hung up on individual bars would not be terribly productive over this span of time, but Wyckoff (adding another chief to the council) would have you note the waves here. Note how the buying waves are longer in time and distance, for the most part, than the selling waves, at least until midday Monday. The selling wave that began there is much longer in distance and generally longer in time. Yesterday's selling wave that began midday was longer in time but not in distance than the buying wave that began in the morning.

 

All of this has to be placed within the context of S/R. Traders have held price up here for five days now, which is interesting in itself. And they are testing the April lows. There's loads of indecision up here (all the dojis), and the volume and accompanying price move on Monday are perhaps more telling that the moves yesterday (on the daily). However, you'll note that after the selling climax in January, price remained in the upper half of the range until the beginning of March, when it dropped to test the January lows, so staying up here for this length of time is no guarantee of a breakout to the upside. Absent compelling evidence to the contrary, I see no reason to interrupt the usual buy-support/sell-resistance stance. If instead we break out to the upside, everybody knows what to do.

[MC 10]

I guess it all comes down to how you are viewing the Support and Resistance. If viewing only on a daily it would appear that there are not many upper shadows, but if you view it in a context of daily and weekly, you will see that sellers are apparently at this level.

 

Very nice chart analysis. I like it.

[brownsfan019 17]

The daily ES is quite the interesting looking creature right now.

 

Still maintaining a short here with a great risk/reward. There appears to be some indecision on both ends, so the first serious volume surge should push this thing around some.

[james_gsx 16]

Broke 1360 with strong volume and a WRB.

 

[zeon 10]

Broke 1360 with strong volume and a WRB.

 

 

Looks like the NDX is still holding support at 1825 though.

[DbPhoenix 42]

Broke 1360 with strong volume and a WRB.

 

 

The difficulties lie in breaking "support" at 60, then entering what is an entire zone of support from 60 all the way down to 42 (to start). If you're already in, great. Otherwise, finding either a good entry or a good exit can be challenging.

 

Since the move up on the 1st was not an air pocket, there's going to be support all the way down to where that move began, if it gets that far, though it will likely be in stages.

 

Even with a great entry over the past day or so, the patience required here will be beyond many traders.

[brownsfan019 17]

Even with a great entry over the past day or so, the patience required here will be beyond many traders.

 

Very true. If trading from a daily using candlestick analysis, the 2nd short occurred on 4/7.

 

But if you are trading from a daily, patience is a required ingredient to success.

 

The question now is with 3 hours to go, are the bears in charge or are we going to see a doji/spinning top type line? Right now, we have a nice sized red down bar. Just what you want to see if short. Will it hold? Time will tell.

[smwinc 20]

The next week or so will be interesting.

 

I tend to disagree with the bearish tone of the majority of the posts here - we haven't really seen 'strong' volume in any of the US markets or European equities indexes (DAX / ESTX50) yet. Perhaps I'm a little hopeful, but I'd like some good news intraday, or an 'event', which gives some nice capitulation to the upside.

 

While it was negative news, NFP data on 4th April was being bought after the capitulation selling. Today (April 9th) we broke those lows. Whoever bought that negative news is now offside, I'm expecting some level of 'position protecting' tonight/tomorrow.

 

Verbally if we had to describe the action in the S&P, I'd say:

 

14th March - tested prior lows, false break.

24th March - broke the mid point, pull back into the lower quartile of the range.

3rd / 4th April - tested prior highs, false break.

 

We are still (well) within the WRB 01 April. The low of the S&P mini missed the 50% retracement of this minor swing down by a whisker - 2 points.

 

It's tricky - I'm overall bearish in the longer term, but I believe we need to see capitulation to the upside. We need everyone to get bullish again so we can move lower.

 

I'd like to see us head up towards 1415's in the S&P.

 

That would be nice clean break of this range, a 50% retracement from the high in 11 Oct 2007 to the low in 17 March 2008.

1.0 (100%) extension of the swing down 24th March (1361.5) to 31st March (1309.25) = 1413.5

.618 (61.8%) extension of the current* (assuming tonight/tomorrow we don't make a new low) swing down from 07 April (1389) to April 09 (1351.25) = 1412.25

 

We have an area of confluence broadly from 1410 - 1430. That is where I would be comfortable buying puts.

 

But perhaps I'm too optimistic. I'm sticking to daytrading that's for sure !

 

Good luck

[brownsfan019 17]

sm - interesting post but remember that you are in the CANDLESTICK CORNER. That means most analysis here is incorporating candlesticks in the analysis.

 

Just a heads up as to why you are seeing what you see.