Monday Pre Market TAO 8-31-09

Over the weekend the news was OK around the world. The caution is almost palpable and I can just about see the steam coming off the charts. Is the top here or not? Well that is a tough call.
But this market has defied gravity and is still floating along. Going in to the Labor Day Holiday weekend, I don't expect any big moves. we are stuck in the range I outlined in the chart on Friday.
Today volume will be light and the open will be choppy. I am flat and have no positions therefore I feel like I can be as open minded and objective as one can be. The plan this week is to trade lightly taking a scalp or two where the opportunity comes along.

Again, the 5 day range Spx top is 1040 and the Bottom is 1015 and it looks like we are to open on the low side around 1020.

Looks like the Spy will open gap down into a support zone of10250 and bounce up to the 10450 area. This will tell us how convicted the buyers will be to continue to buy the dips . I'LL jump on the bus and see where it goes with a stop at 10195.

Per Market TAO Fri 8-28-09.. Topping Out SPX

Yesterday we got a break out of the Asymmetrical triangle on the ES Futures to both sides .
the down break was a False Break and turned to the upside and broke to the top of "T".
This shows the need for the fund managers to move into equities. the US Dollar tanked at 10:30
and we have been lifting north.

The open is a gap up with a target of 1040 -50 which will be the top of wave 5 completion.



Watch My Chart Cycle Video
http://neboxian.blogspot.com/2008/08/5-phases-of-stock-chart.html

Today price touched 1039.80 on this Daily SPX 500 chart.

The 5 Doji's beginning with the first one touching the Third Extreme Bollinger Band is a Topping Out Action and a sideways trading move can last 4-16 days .
The pink and yellow dotted lines are the expected range for next week .... it is possible to get a final Sharpe spike to 1050 before market begins the down leg.

Pre Market Tao Thurs 08-27-09

ES E-mini Futures
Asymmetrical Triangle could break up or down. Triangles occur in the 4th wave of a 5 wave structure.
we could expect a break out to the up side to complete the final wave 5.
Buy above the 1038 or sell below 1018.. price is at Apex so we should see a break out this session.


Jobs and GDp report where not helpful in defining direction.

Asia was weak Europe was soft
The US Dollar is holding steady

News tape is modestly biased Bullish
Bond Auction at 1pm est .
so far open looks like a yawner.

EWG Germany ETF Evening Star Candle Pattern

This is a very nice Short Opportunity.
Evening Star Candle Pattern.
Confirmed today with an excellent Red down move.
With the US Dollar gaining strength over the Euro Dollar. This ETF of the German Markets looks to be ready for a move down. a good short entry will be at the daily pivot point around 2100

Pre Market TAO Wed 8-26-09

3 Doji Candles

Close....Very Seesaw day major markets squeaked out a green close.... 3 Doji Candles ..this action tells me the buyers are not as confident of more up side and the sellers are reluctant to jump in... in other words no one trusts this market... so we wait for a break up or down . we had reasonably good news today but really didn't get any feel of a rally...The market needs a catalyst to kick it out of this range . The Jobs report is due Friday AM so we will see what Mr. Market has planed after the open.
I really don't expect a huge correction but we should see narrow range sideways trading untill next week then a releaf move to 1000 before another move to Spx 1050
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11:30 et am spy bounced off pivot 10350 and is headed back down to S1 10261
Relative volume is up. overall tick is bullish ....expect another buy push on this dip
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Overnight Asia Rallied and Europe is selling off.

Es Futures have moved below a 3 day pivot range 1026 to 1029 and trading down

oil down

Gold up

US Dollar up

Durable Goods missed forecast

looks like the beginnings of a down day

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Bulls are still aggressively buying dips ....Spy dipped to S1 10261 and bounced back to pivot very quickly. This was supported buy the lack of neg NYSE tick below -750 the first half hour of trade

waiting for Crude inventory's and new home sales report due at 10 and 10:30 est

SPX Hammer Candle Pattern

SPX 500
We didn't get the Swing Day Trade we expected but the Market has put in a better signal.
This is a Reversal Candle Hammer Pattern
We will see how this plays out for the rest of the week.

Pre Market TAO Tues 8-25098

We Have a Swing Day Setup on the SPX . The best way to trade this is if the price gets to the Friday high early in the session I will sell short there ... with a target of Friday low... If the price goes to the Friday lows early and then back up to the high I will most likely not trade this setup. In other words.... I would like to see an early up tick first but not to far above Fridays high the a sell off.


To Day the markets are somewhat mixed.

Es Futures Sold down to Monday lows and are now trading near yesterdays close.

US Dollar is down a bit.

Oil is flat and Gold is up.

Asian Markets sold off and the European markets are flat.

I would wait until the consumer confidence report at 10 Am est. before taking a trade.

Market TAO Mon 8-24-09

Markets starting out to the up side
ES Futures traded to the up side
Asia and Europe Trending up
US Dollar is firm for now
Gold and Oil is up...


the News is Bullish over the weekend

Looks like we go higher today

Buy the Dip mode is in play ...

Overnight Roundup Fri 08-21-09

Spy Pivot at 10075
ES Range 1011 to 997 currently trading at 1010 area
Gold and Oil is ...up
Euro stks are ....up
News Tape is bullish
Us dollar is Down
Euro is up

Spy will open above pivot even to up from yesterday close.
Bernanke is talking at 10 am est
wait to trade until AFTER the Bernanki comments
if he mentions raising interest rates that could tank the markets.

My plan is to Buy Spy at 10075 down to 10000 and exit 10200

New On the Radar is ...... SIRI..........is going to be an Apple App ......this is a screaming BUY for a trade or long term investment.

Pre Market TAO Fri 08-21-09

SPX trade 30 min chart range for Friday Options Expiration Day. Price is at top of resistance line and Pattern looks like a Bull Flag but the indicators are suggesting another leg down then up. The market is clearly in a up bias the bulls are aggressively buying the dips. Rsi and Stokcastic are over bought the market looks like it wants to turn down but the lower chart of the NYSE Tick is showing strong buying with very few net sell candles below - 500 for the last month. This is a very nervous place to short if the price is rejected at Spx 1017 area price should move down into the shaded red zone . Be careful if you do short this market and use small size. I would be more inclined to wait for price to move down to 987 area and touch the green zone on the Tick chart in the AM session then go long.
The big money is buying any weakness so I expect a shallow retracement. Very Tough market to trade could get Whippy. Many traders are just stepping aside until next week.

The Next 90 Minutes is All I Want to See

I don't want to read about how the banks are fudging the earnings reports. I don't care if AIG can pay back the government. Who gives a Rats A$%% if Bernanke Prints another Brazillion Dollars over the weekend. Conspiracy and market manipulation theories are just a huge distraction and entertaining them is a big waste of time and emotional capital. As a Day Trader, all I want to know is what will happen in the next 6 hours or actually, The First 90 Minutes at the market open and the last 2 hours into the close.

Oh I agree, being aware of the big picture is a good thing to know. Trading the momentum of the open and into the close is less of a fundamental play and more of a Live Pin Ball type of analysis. The Morning action is off Asian and European moves bouncing off Fib's, Support, Resistance, and catalyst such as earnings or critical news release events into or just after the open.

As a Trader, you must isolate your mind from any Emotional Bias. You can't let the long term Time Frame or the parade of talking heads and esoteric columnists cloud the short term trading action of a few hours in a day.
Remember, the time horizons of the these many experts opinions range from 3 months to 3 years. A Day Trader has a much shorter time frame more like 15 min's to 2 Hrs.

If you want to be a happy successful Day Trader, learn to push those long term thoughts to the side and concentrate on what only effects the first 2 hours of the trading day. Long Range opinions of what may happen two weeks or two months or two years from now are most likely all ready priced into the market and not necessarily relevant to the next 90 min trading session.

This is my daily AM Routine

• Day Traders do not hold positions overnight. Having a position will bias the outcome of your analysis and it will be hard to be objective.
• Do your home work and big picture Technical , Fundamental Analysis on the weekend.
• Then do the Small time frame studies the night before.
  Try to identify 3 different what if possibilities for the first 2 hours of trade and how you would handle each one. Include the best entry and exit points along with the best position to place your stop. I usually want to be out of the AM trade about the close of the European session 12:00 EST. And I will not carry a trade over night.
• Then write down all 3 of your plans. Arrange them into order from most likely to least likely.
• Get up early with a fresh mind and scan the business news headlines. Do the Joe Friday bit. "Just the Facts Please." Are they overall Bullish or Bearish?
• Try not to read the opinion articles or listen to Market opinion TV commentary before the open. Rick Santelli and Art Cashin are the only exceptions. Save the rest till after the close.
• Then Look at what Asia and Europe are doing over night.
  Are they in a rally or selling off?
• Then look at the US Dollar.
  From yesterday is it trending up or down?
  For now the US Dollar and Equities are inverse.
  Dollar up / Equities down.
• The price of Oil.
  From yesterday is it trending up or down?
  For now Oil and Equities are trending together.
• Then finally look at the S&P 500 Futures. Traders call it the "ES".
  Based on yesterdays ES and overnight 24 hour range High and Low, how is it trending and trading in relation to the close of the $SPX.
  The ES direction will most times carry over to the equities market open.
  The overall momentum of all these combined will most times determine the direction of the first 90 min's.
• As you work through this Pre Market check list , Weigh the 3 probabilities of your previous night's home work.
• Finally check for key reports or news scheduled to be released like GDP,CPI, Jobs, Earnings, Sentiment, ect.
• When the Bell rings you are ready to put your plan into action.

[tag]The First 90 Minutes,AIG,Bernanke,Fib's, Support, Resistance,Emotional Bias,Time Frame,Day Trader,Technical , Fundamental Analysis,Rick Santelli,Art Cashin,US Dollar,Oil,S&P 500 Futures,ES,$SPX[/tag]

Pre Market TAO Wed 08-19-09

Overnight ES traded down to a low of 977 . The Asian markets sold off as well. The US Dollar is up a bit and oil is down. ES , NQ , Spy are all approching a Do or Die area we will either bounce to the up side or break down and head south.

With the Asian markets leading the European and US Market it is becoming increasingly difficult to Day Trade the US Market during the regular US open and close. This explains the daily Gap opens which we didn't see occur on a regular basis in prior years.
The Gap opens and runs for 15 - 30 mins then price remains in a narrow range for the remainder of the day with a wippy action at the end of the day.

So It is time to approach the trade with a new strategy

Today I will sell the gap down at the open and exit my position at the first sign of a loss of selling pressure. Spy 9850 sell down to about exit 9790 .and that will be the only trade unless price reloads back to 9850 for another run down and I dont expect that to happen. But it could.

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The market is amazing....as soon as you identify a pattern ... it takes off in a different direction.
got blown out on the open ...and the big boys hit the buy button . The Mutual Funds see value at Spy 9825 and there is really no large supply so the market zooms higher......I am beginning to think there are not many bears left or at least they don't have the fire power to push the market down for more than a few days then they are tapped out. It look like the buyers are stepping aside to let the market reload to the down side ( suggesting the Bears are very weak)then the Bulls lean on every dip and as long as the fund Managers have money they are long only operations ...the market goes up.

Pre Market TAO Tues 08-18-09

Overnight ES and NQ futures traded up to the pivot 1580 and 986 area. The US Dollar is at the daily pivot as well. I expect the QQQQ and Spy to gap up at the open and quickly sell down to yesterday low. If there is a break of the low, a move to 980 down to 960 is possible.

My plan is to wait for the gap up momentum to fade in the first 15 min's and then sell the rally.

Keep a close eye on the US Dollar. A sustained Dollar rally will cause the equity markets to continue to the down side.

Expanding Triangle a Long Term Look

This is a Chart of SPX 500 from 1950 to 1975. After a long rally from 1950 this chart shows an Expanding Triangle that lasted 10 years.This period of history represents a major Redistribution of Social and Economic Wealth within the United States. Beginning with the end of the Korean War to the Cuban Missel Crises The Viet Nam War. The Great Society of the late 60's. The NASA Space Program. The advent of the PC and the first big Oil Crunch and finally the movement of The US Manufacturing base to the Pacific Rim. From the "E" position the market trend was sideways (digesting the redistribution)until 1982 another 8- 10 years.


The second Chart Of The DOW shows the huge growth of the beginning of the Technoligy wave the Internet and the opening of Markets around the world. This was marked by begining of the Cell Phone and the Internet and the Development of Stock Markets in countrys outside the US and Europe.

The Second Expanding Triangle Represents another Major Redistribution of Social and Economic wealth on a World scale. This past Year as a world society and people, we are just now becoming self aware of how interdependent each and every country has become. WE are all looking at the world we share in a new light.

I believe this expanding triangle Consolidation will now trend sideways for the next 8-10 years rotating around the white shaded area. A period of time for the world to digest this global redistribution before a new trend will resume to the upside.

Pre Market TAO Mon 8-17-09

Looks like Mr. Market is beginning to make a move out of this 12 day consolidation period to the down side.

Asia started to sell off overnight and Europe followed.


It looks like the Michigan Consumer confidence report Friday was the final straw that broke the camels back.

I expect the bulls to interpret this as a pull back and buy the dip.

The Spy and QQQQ will open Gap down big.

This Week will show us the better picture of overall direction though the next month.

The Banks are not really getting better. We Started out the summer with 95 regional Banks in trouble and now we are up to 300 + ... The consumer is not getting stronger and retail reports are pointing to a real drop in the last week of the month in purchases.

China is done with the restocking of raw materials and the orders to Chinese mfg is not increasing.

The Shanghai market has rolled over with a double top pattern....

I Think if the US Dollar continues to gain strength we are in for a return to the down side.

My plan to day is to sell the open and wait for the sell off to lose strength and Buy the Spy dip into the 2 hour of the session.

Weekly Tao Mon 8-10-09

The past week has been very much a transition week for the markets. I like to step aside from trading when the trading becomes shallow and doesn't make since. So I have taken a much needed rest while waiting for MR. Market makes up it's mind.

Today was the lowest volume day this year and it is very difficult to determine an overall direction. Bear market rally's die on decreasing volume. It dose appear the US Dollar is beginning to find support and has gained strength in the last 4 days. If this continues after the FOMC Meeting this week we could see a correction of rally or something more severe.

At this time the markets are very overbought and are trading in a narrow range and I am not comfortable taking any heavy trades long or short until we see some clear movement out of this consolidation .

My best guess is a correction will begin and price will move to SPX 960 area in the next week.