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MortiES' EOD 14Jul2009 ~ So Far So Good!

Written by Mortie
July 14th, 2009at 11:33 pm

It looks like ES is going to cooperate with my opinion so far. Those who were expecting this move from 865.25 to be an ABC correction with further lows ahead, now have to concede that this is not a Wave C, but a W3.  Once the 162% projection of W1 is exceeded, we have to call the wave a W3.  ES popped on the news of INTC earnings because it was poised to pop. How many times have we seen the market do the opposite of the news. News can add some volatility, but IMO it does not change what the market is going to do.

In the first chart we see that significantly, ES has hopped out of the regression channel of the highs. Exceeding the regression channel of the highs in a down trend is significant and indicates a possible reversal. You will now hear from the pundits how the market is first “testing” the shoulder and if that doesn’t hold, you will hear about it testing the head. If the head doesn’t hold, we have a H&S failure. Of course, the pundits may be right! Any pundits here?

es-daily-eod-14jul2009

In this next chart, I used Globex data in order to include the after-hours pop. Significantly, the exceeding of the green zone changes the count from a possible ABC to a 1,2,3.  The after-hours pop was stopped in its tracks by the Weekly R2 resistance level. This level is best calculated on the day session chart, but it seems to working here. I chart the daily and weekly resistance and support levels for my trading because that is what the floor traders use. The daily support and resistance levels are calculated at the opening bar and don’t move all day. I’ll take every edge I can get! I am expecting a pretty choppy day tomorrow. If I do any trading, I won’t be watching the paint dry on any of my trades.

es-eod-globex-14jul2009

Categories: Markets

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8 Responses to “MortiES' EOD 14Jul2009 ~ So Far So Good!”

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  1. j0sh1ngU j0sh1ngU says:
    July 15, 2009 at 1:15 pm

    Would you also say 1-5 move up is over and now having ABC back down?

    Reply
  2. j0sh1ngU j0sh1ngU says:
    July 15, 2009 at 1:14 pm

    The trend up today has that solidified your opinion or put some of it into question.

    Reply
  3. Mortie Mortie says:
    July 15, 2009 at 1:06 pm

    Joshingu ~ The problem for me with the move down to 865 being a W1 is that it looks much more like an ABC corrective move and W1 would have to be impulsive.

    Reply
  4. searchgr searchgr says:
    July 15, 2009 at 12:18 pm

    Because this is the 4th wave.

    Reply
  5. j0sh1ngU j0sh1ngU says:
    July 15, 2009 at 11:23 am

    appears we broke out but one more thing that I am having difficulty understanding is why not call the move from 950 to 865 simply a fibonacci retracement with 61.8% coming right ~920. Possibly just a W1 down and W2 up?

    Will look more into contributing later tonight/over the next week.

    Good charts and keep it up

    Reply
  6. MrTrader MrTrader says:
    July 15, 2009 at 1:12 am

    Gotta give it to you, well done!

    Reply
  7. Doug Doug says:
    July 15, 2009 at 12:23 am

    And for the record, last week I shifted my small retirement accounts back into cash or cash equivalents and in my trading account I am leaning bearish again and have some arbitrage positions as well. Especially as I am studying for the Bar, I don’t have as much time as I would like to be trading and maintaining that account, so its nice to have positions that require lots of maintenance.

    Reply
  8. Doug Doug says:
    July 15, 2009 at 12:18 am

    My thoughts are that the market will refuse to cooperate with our expectations of a H/S pattern we are all trying to force upon it. One of my views of the market is that we will see ES test at least the high of the right shoulder before heading back down again. Another scenario which I think less likely is that we retest the Head of the H/S pattern we all see before heading back down again for an ultimate retest of the March lows.

    On a larger level, I think it’s a fact that we have experienced one of the most volatile periods in market history. Whereas previous market disruptions could be likened to tossing a rock into a pond, the past year has been akin to tossing a smallish boulder into the pond. And what happens when you toss this boulder into the pond? You get large waves/oscillations, which take longer time to decrease or correct back into something more or less tranquil. I’m sure you get the picture. Thus, with such a momentous drop, I think it’s only normal that we get a very large bear market rally that goes up much higher and on for much longer than previous bear market rallies, simply because the rock that was thrown into the pond of the market was so much bigger than what any of us had experienced before.

    Reply

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