Money Manager End of Year Markup

Market shenanigans for next 3 days.

I expect price action over the next 3 days to appear to defy gravity.

This is the end of October and the end of the year for Money Managers.

Many will pull out all the stops to push up prices in an effort to use the higher looking performance even if it is only good until Friday close to claim the final print as their end of year return.

So I expect a early AM dip and the drive will begin and lasting relentlessly all day... and for Thursday the drive will continue until the end of the day ....for Friday Prices will appear to be frozen in space and time into the close........Monday will be release day...ie : sell sell sell.

I am expecting at least a 2% push....could go higher.

My Spy trade plan in the AM Oct 28 ,09 is to buy the low in the first 30 min's Spy Gap fill 106.00 down to 105.50 and hold until spy 107.79 up to 108.50 ....will do a premarket up date in AM

Market TAO Tues 10-27-09

Markets overnight are mixed .

Asia down
Europe up

waiting for home sales reports

Es futures flat

I expect a narrow range day .
there has been one penetration and one touch of the extreme Bollinger Band in the past two days on the 2 hr SPX chart suggesting a flatting out of price action for next 7-16 ....2 hr bars...

my plan today is to scale into spy up to 108 and exit at or below 106.50 down to touch of gap 106.00

Market TAO Monday 10-26-09

More of the same today...Asia and Europe are up , US Dollar weak ...Trading range is expested to be confined to the Triangle until Wed's ...... There is no way to determine which direction the market will break......I COULD MAKE GOOD ARGUMENTS FOR EITHER DIRECTION....

My plan today is to buy the SPY low retracement after the opening gap up at 108.32 and reverse position at touch of triangle upper trend line for another ride down ........ 100 point range trade.

Market TAO Week Ahead 10-25-09

The Bulls fought very hard to hold this lower triangle trend line at the close on Friday. This is a significant place ..

As you can see failure to hold above and break out of the Triangle to the up side will most likely see the Gap below filled .....

Triangles are difficult to trade... use small amounts and tight stops to trade the interior body.... be nimble...

we will most likely know the direction of the break by end of week.

James Taylor-Up On The Roof

Eva Cassidy - Somewhere Over the Rainbow

Pumpkin Patch

Prespectives 10- 23-09

Been doing this way back to 1978.....the fundamentals are for the first time in my life thrown out the window.....most of the metrics I learned to trade with don't provide any true since of reference. It has come to a point no one trusts the analysts or the anointed reporting entities either. I am amazed at how bullish the markets are to date...To a point, I am questioning my own point of view and wanting to give in to the BS.....The media makes me nauseous because I know what is going to happen...I really think they do too....That is why it is being so over sold every day. The shift is now moving away from the USA...... but to where? What are the new reference points and how are they to be measured? As a day trader this all really doesn't affect my performance....but there is a heavy weight in the atmosphere.

Market TAO Fri 10-23-09

SPx will either break above upper resistance lines or remain in this sideways forming channel

....Overnight we saw it all go up Oil,Gold, Asia, Europe ...even the USDollar..

Spy Will Gap up to 109.83 resistance line...

Home sales report due and Bernakie is talking as well.....I always lose money when he talks...

So my plan today is to remain neutral
and see how price responds to these upper resistance lines.

If we gap up and break lines I'll go long and we most likely head to Spx 1120.

If the lines hold... we will most likely spend the rest of day up here fighting it out. I dont anticipate any meaningful sell off today.

US Dollar ETF UUP 10-22-09

This is the UUP

This is a double long ETF which tracks the US Dollar.

Here is the Ending Diagonal Elliot Wave 5... I am expecting the Down trend to reverse any time in the next 5-10 trading days.

Market TAO 10-22-09 Thurs

Reached top of Wedge and failed

Spy Target is 106 area

My plan today is to sell spy mid to low 108's .... and exit at or below 107 down to 106.25
With stop above yesterday high.

Polar Bear Comming to the Surface?

Lurking Just under the surface...

Market TAO Wed 10-21-09 Double Tops

These Two Key Indice leaders Dow Transport and Russell 2000 are now Showing a Flat Top formation in addition to the Double Top.

These market structures are always a sell signal... We where early on Monday but the formation is valid until there is a break above the yellow resistance line.

These Indices are the Market leaders
so I expect the SPX and Spy to follow.

My plan today is to Sell Spy at the high of day in the mid to low 109.00's
and exit at or below 108.09 down to 107.74

Market will open low109.00 and most likely rally up to 109.50-60 for first 30 min's then turn back down.

Is the Market Overvalued?

Picked this up from my friends at Slope of Hope blog sight via Zero Hedge.

*** Have you succumbed to the green shoots euphoria yet? We hope not. But if your trigger finger for stocks is getting restless, check out the following eleven reasons why chasing this rally could burn you.
These reasons put today's 60% surge into perspective by comparing it to an average of the same data points during the past five 60% rallies.

Rallies that occurred between May 1970 - August 1972, October 1974 - January 1976, August 1982 - April 1983, January 1990 - January 1994, March 2003 - January 2006.
The comparison below provides a stark reminder that government actions, not fundamentals, are driving this historic equity bubble. Understanding this difference might even save your retirement. You can thank us later. Data courtesy of Contrary Investor and Zero Hedge.

1.) Year over Year Retail Sales Growth: 9.3% average, 5.3% now
2.) Consumer Confidence: 95.5 average; 53.1 now
3.) Capacity Utilization: 79.9% average; 66.6% now
4.) Year over Year Industrial Production: 4.1% average; -10.7% now
5.) ISM: 53.9 average; 52.6 now
6.) Payroll employment gains over period: 2.2% average; -2.0% now
7.) Decline in continued unemployment claims from cycle peak: -26.3 average; -11.6% now
8.) Year over Year growth in total credit market debt: 9.3% average; 3.0% now
10.) Year over Year growth in household debt: 8.8% average; -0.1% now
11.) P/E Multiple: 16.8x average; 20.0x now

*** These facts tell you that the market fundamentals are rubbish and that the market is overpriced. Really, the only thing driving this rally is hot money created out of thin air by the Fed's money-printing policies.
Hot money can flood into assets quickly (taking the market up 60% since March). But this type of money can also flood out of assets just as fast.
It's because hot money is made up of traders trying to turn a quick profits. They hope to buy now and sell to a greater fool later on.
It's a recipe for disaster. When these traders think they've become the greater fool, they'll sell everything in the blink of an eye.

Market Tao Week Ahead 10-19-09

Trans Double Top



















NDX Double Top



















Monster Macd Divergence

With Earnings under way markets are resistant to any meaningful correction but the Ndx and Trans Are beginning to tell us a different story.

Markets look to be setting up for a turn down as soon as this week..... we may get a final blow off top spike up to 1120 but maybe not.... with AAPL reporting a/c today it could get choppy but I'm thinking price is baked in and will most likely selloff after report.

My Plan to day is to Sell the high 1090 and exit any where below 1079

Spy sell 109.00 and exit 108 or below

Stop Placement

Placing Stops is the harder skill to develop.

The market is dynamic so it it best to learn where to place a stop based on the price structure and risk/ reward.....not a fixed amount.... also adherence to time frame selection is critical.

Try placing your stop behind a previous support/resistance , break out line.or past consolidation area .... the skill is to determine where the price will least likely return to. Therefore,many times the distance to a previous stop target will show higher risk than the potential reward target..The question to ask your self is if the trade goes that far the wrong way , is that an acceptable loss?

The decisions to take a trade or not, will over time and many trades, determine your long term success. Remember, there are only two things you have control over.
1. Your entry point.
2. The amount you are willing to lose on each trade.

Where are the Bears?

Sending Goldilocks out to find some Bears...


Very little Institutional participation last two days... It is hard to imagine the market can continue to rally with out the big boys .....

Market TAO Thurs 10-15-09

The Earnings season run up is reaching a fever pitch high..... will it go much higher? ...Maybe .

There hasn't been any support for the US Dollar and it continues to drop.

The earnings reports continue to show a profit on cost cutting and inventory reduction and job cuts.

Company's dependent on export trade are benefiting from the cheap Dollar for now but sales and top line revenues are not increasing.

We are still losing 500,000 more jobs this week.....

Treasuries are so crowded if there is a rush to exit the crush will be massive.

My weekly analysis remains intact Spx will continue to grind higher to 1120 over the next 5 to 7 trading days..

I have noticed the Large block + 1000 traders have been far and few suggesting a change in sentiment and wider market action is anticipating a directional change.

my safest trade today is to buy as close to Spy 108.00 as possible and exit above 109 up to 110.00

More Up to the Market Ahead

We are very close to a peak in this current leg. Spx 1120 area looks to be the target over the next 7-10 trading sessions.

The general optimism of earnings expectations will hold markets up for the next few weeks and bullish sentiment will continue to buoy prices.

Corrections develop two ways. A pull back in price or a sideways movement over time to absorb the momentum of the rally.

Every one is expecting a traditional retracement from the peak but there is much more misleading data today than the typical economic environments we have seen in the past.

Technically, the analysis suggests a near term turn to the down side. Traders are nervous and don't want to commit to the up side but are not eager to to sell . The Mutual fund managers are running out of gun powder as well. They got in late which explains the run up in the last leg and cant sell until the end of the year.

Foregoing a significant shock , less than luke warm earnings or disappointing guidance, I don't see enough bearishness or bearish media coverage to sustain any meaningful push down. Nor do I see any additional conviction of the buyers to move the the ball further up the hill.

I think the Market will move sideways in a range for the next quarter.
This level will present significant resistance over the next 3-4 months.
Ultimately investors will seriously begin to question and expect performance. When they realize true progress is not forthcoming the melt down will begin.

Market TAO Fib Study 10-08-09 Thurs

Once you learn to use Fibonacci Arks, Fans and Time studies , they help to identify when to expect a turn in the price action... Here we can see mirrored movement from the 1080 high to the low and back up.

Read up on these tools and take time to plot them correctly.

Today we are in a confluence of fibs and I expect we will see the red path to play out in the next 5 days....

I also plotted out the possible up side path in case price breaks above the high of today.

Market TAO Wed 10-07-09 Triangle Wave 4

We can expect a break out to up side. 3 targets or we noodle sideways or we break down hard after jobs report to bottom of expanding diagonal. Earnings season starts with Alcoa and and report is good so we will most likely wait for more reports to get more up side mojo next week. Pins and needles..... we wait till MR Market makes his move.

Tough 7 Months for the Bears May be Over

Trend Break and Backtest 10-06-09

This a beautiful sight to a bear.

Trend break and a Back Test to the bottom of the lower trend line.

2nd chart is the probable price action
we could see over the next few days.

Am action is key ... All indicators are mixed to flat so we will follow the opening mojo....

This could also be a Bull Flag....so if we get a break to the up side st the open then we could see a big move . ...play safe.

Pre Market TAO Tues 10-06-09

The US Dollar has been selling off all night.

We are expecting the SPX to gap up at open 1050

Spy gap up to 104.85

Fib time series suggests an inflection at 11:30 est so i expect a rally until then up to 105.72 then we should see a correction of this wave A..... to a B wave down to 104,00
I'm Calling it A because the price action from the 1080 high is turning out to be a series of ABC zig zag patterns which suggest a sideways consolidation pattern ...

Monsanto Head and Shoulders Pattern

Mos released earnings tonight and had a big miss. conference call in am.

It is best to Wait until a Daily close below dotted line and a giant volume spike before entry.

Market TAO EOD 10-05-09

This is a Fibonacci Time and Arc Study.

Looking for confluence of lines and found a correlation at the AM open Tuesday Am 9:30 est.

This would be the top of wave 4 .

But if this current wave continues higher then we are not in a w4 ....it is something else.
Possibly a sideways series of ABC Zig Zag pattern waves typical of a large consolidation structure.

So far the move down from the high of 1080 to the low of 1020 is a big ABC Zig Zag Pattern.

The current wave could be an "A" wave or a 4 wave either way we could see a move to the lower purple trend line where we could see one of two possibilities play out as illustrated on the chart.

A bounce or a pulse down to complete wave 5.

Week Ahead 10-05-09

This looks like a 4 wave retracement that started Friday it clearly acted corrective. we could see a pulse down wave 5 to a test of the long term bear wedge trend line. we will need to see how wave 4 finishes.

Market Tao Thurs 10-01-09

SPX 500

Well I expected a bit of a sell off today but I didn't expect the Bulls to run out the door screaming like a bunch of little girls!

The News wasn't all that bad.

This looks like a Down C wave and stopped right on the 138 fib extention SPX 1030.

I was expecting a bounce off the 1041 and retest the wedge trend line but it cut through the 1040 like the bulls weren't even looking behind themselves as they where all bunched up to get out the door trying to get away from all the blind two fisted buying they did all summer.

I got stopped out today as well because I was playing the bounce plan at 1042

The market is off 4 % from it's high of 1080 and that is about where the bulls jumped in last time . We will see after the jobs report in the morning if they stay in the tall grass or jump out and mug the bears.

I'm not sure if there are enough bears or bearish sentement to push this market down to far... unless they are the same bulls that pushed this market up to here.

Actually this sell off was reasonably orderly in 5 measured waves .

The bulls need to push this back above 1040 or this could get down to 1026 -17 area.. that would be 5% off the top.

Day Trading is All About The First 90 Min's

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.

Triangle Top SPX 10-1-09

Asymmetrical Triangles Don't usually form as the final wave of a Top. They are typically a wave 4 formation.

This Triangle is not complete ....but if this plays out over the next two days This suggests we could see another leg up.


This formation at this top of a Bear Wedge could become very whippy .

I Don't intend to play the first break up or down. I expect both will be false.
The safest play here is to get long above SPX 1077 or short below SPX 1040... Otherwise trade the Spx 1045 to 1070 zone as a sideways trending channel.

The biggest thing we have been fighting here is Bi- Polar market data ... There are so many conflicting fundamental Data signals it will be difficult to see a clear direction until we see a clean break above 1082 or below 1040.

It is still easy for the media people to make a Bear or Bull case in either direction and this creates confusion.

The most reliable approach will be to take the position that the news and Data is already in the charts and stay with chart formation, pure technical and Elliot Wave analysis.

Swing Day Setup Wed 9-30-09

SPY Swing Day Setup

whenever the last trading day opens higher than previous day and closes at the low, we call that a swing trade setup . Most of the time they play out the next day as a sell day.

This also lines up with the 60 min Spy chart ABC wave structure,

And The Transportation Index down day setup. with the Weighted Moving Average and the Volume Weighted Moving Average Crossover along with the DMI all pointed down.

This is all happening all at the top of the long term Bearish Rising Wedge.

My plan today is to sell the Spy at 106.35 -50 and exit at or below 105.00 down to an extreme of102.50

Pre Market TAO Tues 9-29-09

Spx 500 looks to be set up for the final leg of this 3 wave push .

Overnight Asia was a bit mixed ,,,,flat to a bit positive.

Europe is weak and the Euro Dollar is falling against the US Dollar.

Oil is down ...

I expect the market will open A bit weak down to low spx 1055-57 's and then make a move to the 1070 - 72

my plan is to buy spy down to 105.75
and exit spy 107.00 up to 107.50

Market TAO Monday 9-28-09

Overnight ES Futures sold off then rallied to Friday high.

The Momentum is to the upside after 3 days down.

the US Dollar is showing continued weakness.

Oil is down

My plan today is to buy Spy in mid to upper 104's and exit at or above 105.50 to 106.00

Market TAO Friday 9-25-09

Overnight ES remained relatively flat.
Asisa sold off a bit
Europe is up

Economic reports due 8:30 and 10 et

my plan today is to sell Spy from 105.75 up to 106.29 and Exit at or below 104.00
----------------------------------------
my Bmo revision to plan

Es just sold down to 1047.77 and Spy will open at 104.50

sell at open spy 104.60 and exit at or below 103.40
----------------------------------------------------------------

12:40 et
Spy trade
Exit 50% on this next pulse down from 104.30 and move stop down to 104.40
--------------------------------------------------------------------------------
1;26 et Spy .....pull stop down to 104.24 and consider an exit at or below 104.00
-------------------------------------------------------------------------------

End of Day SPX 500 9-24-09

We had a drop in first 30 min's and chop the rest of day day which has been typical of the controlled market lately.

Here are the support/ resistance zones for Friday.

With the funky Rimm report I'm not sure how the markets will take it in the AM but I believe we are beginning to see the true weakness of the consumer and I expect we will see more of the same in the next 3 weeks.

This meager drop of honey for the bears should pull them out of their caves in the AM.
The Dip buyers hid in the bushes today but they are not gone. They are waiting to mug the anorexic bears in the next few days. Maybe Monday.

My plan is to sell up to Spx 1062 and exit at or below 1040.

I will see how the Asians and Euro's play this overnight and will have a better focus before market open Bmo.

Market TAO Wed 9-24-09

Overnight ES traded in a tight range but after a positive jobs report we are trading above yesterday US market close.

The Past two swing trade setups were no great winners and with the bullishness in the market lately , i am a bit skeptical of this one . We will see how the AM session unfolds. I would rather be buying the dips.

The Asia and European markets have shown weakness and oil is down as well.
US dollar is flat

The Bond market is looking like it wants to break to the up side today. I'll be watching the TLT at the top of an Asymmetrical Triangle.

Engulfing Red Candle and Dark Cloud Cover

Spx 500 Daily Chart 09-23-09

This is an Engulfing Candle Pattern
which is also a Dark Cloud Cover. Key Reversal Formation.

This also known as a Swing Signal when the close is at the low of the day.

Very Nasty sell off in last hour of trade right after the FOMC report.

This could very well mark the turn of the trend.
The next few days will tell us what is next .
Tomorrow, I expect to sell any rally up to Spx 1070 and Exit at or below 1060

Market TAO Wed 9-23-09 FOMC DAy

I Usually do not trade on Fed days and today is no exception. The market is clearly poised to make a move to Spx 1120 . But how it gets there is the risky part. The past few Fomc days have been up rallys all the way to the announcement and beyond ... But if they say any thing about raising rates or reducing quanitave easing we could see a swift set back in this rally ....I expect trading to be relatively flat up to 2:15 est .

Market Tao 09-22-09

Overnight Es Futures moved up to top of last week range.
Asia was flat
Europe is up
US dollar is down

Fomc and G20 meeting comming up.

Maybe a quiet day .

My plan is to stay with buy the dip mode.

Spy will gap up to the 107.10 zone.

I plan to buy in the high Spy 105's to low 106's and exit in low 107's

Market TAO Mon 9-21-09

ES is trading down overnight into 23% 9-14 fib line at 1053

Aisa was down

Europe is down

Spy will open down at 105.80


My plan today is to buy spy 105.70 and exit 106.50

The Week Ahead 9-20-09

Spx 500 Chart
Price has popped out above the riseing wedge upper trend line. This could mark the usual over shoot typical of the climax of wedge tops.

The Ascending Triangle in last two days is a head scratcher here. This could signal a final push up. The market is clearly headed for the Dow 10,000. The Transports are leading the way and the Spx will most likely follow along in the same general direction. Earnings will begin to trickle in next week and the Big Houses are in pump mode with all the upgrades last week ....expect more.

The dark blue oval is the upper target the orange dotted line is the long range trend line off the all time high 1576 on Oct 07 .

It's hard to say how price will get there in the next 7-10 days. The ovals are the probable reaction areas for price corrections and direction change.

I Think the market is topping out up here but it may take a few more weeks before we see Mr. Market's real intent.

• The Markets are at extremes for now.
• The Bullishness is at 2004 levels.
• Vix is at the 10 year low trend line.
• There are a record number of stocks above the 200 day moving adverage ...
• The Us Dollar is at 18 month extreme lows.
• Side line cash is moving out of money markets and more in to better intrest and dividend earning vehicles and not as much is avaliable to go into common equities.

Untill the fever breaks ,if you want to be in the market, it is safer to remain in a buy the dips mode with tight stops.

Market TAO 9-18-09

SPX 500 Head and Shoulders Pattern..

Es Futures are up to the 1066 area at the open...

I am neutral at open , news tape is ok and dollar is still weak . today is options exp so it could be choppy.

we will see how first 30 mins go.

Bear Rally

WoW! Hang In there Bear. There is only two ways down ...Straight down or sideways down.

Market TAO 9-17-09

Spx Is reaching the top of rising wedge . expect a return to lower trend line over the next few days.

my plan today is to buy at Spx 1057- 60 area and exit at 1070-75 .

Tues Market TAO 9-08-09

Had a Great Long Holiday weekend......The World is in rally mode today..... it's all up ...refer to chart i published last week Spx looks to have resistance at 1036 - 40 area . I think we drift sideways from here this week and remain in the 990 to 1040 range. I f price breaks above 1040 then we will be off to the races toward 1100.... The US Dollar continues to show continued weakness so keep a sharp eye on that .....these rally's are tied directly to Dollar and Investors who live out of USA are flooding in to the market because their currency will buy much more equities at great values. The Mutual fund sector as well are long only groups which continue to feed this up momentum.. I for one will wait today and see how the open session plays out....

If we get to SPX 1040 zone I will put on a sell short play back down to 990 zone with a stop above 1050

Thurs Market TAO 09-03-09

Es Futures are trading up over night.
Asia was Mixed and Europe is up.

The Us Dollar is down and at a key lower support line at the apex of a asymmetrical triangle daily chart.

Oil and Gold are up.

Spx chart showed sideways trading yesterday. within the shaded blue zones. At the open I expect it to gap up and run to the upper blue zone Spx 1005 -10. There is a convergence of long and short term trend lines there and Uber resistance. Sorry the chart looks so busy, just follow the colors.

The two up sloping purple lines are the Apex of a Rising Bear Wedge.
What we are seeing is a break down out of that Rising Bear Wedge on Sept 1st.

Watch my Video on Wedges http://neboxian.blogspot.com/2008/08/wedge-rising-and-falling-chart-pattern.html

I expect price will gap and run to the upper blue shaded area and trade back down toward Spx 987 lower blue zone.

I don't trade the day before a holiday weekend to many whip saws. but if you got to be in, trade light. We could see a sell off after European close......I don't know many traders who would want to risk the long weekend. But as day traders, we are out buy end of day.
Have a great Weekend ...Summer is almost over.

Wed Market TAO 9-02-09

ES Futures overnight sold down to 940 from a high of 1002 .... and looks to have stabilized.
Asia and Europe followed yesterdays US market sell off to the down side.

after a big down day we could expect a retracement back up to the SPX 1010 support level which should now become resistance.

The news tape is reasonably good but I think for the day, markets will be depressed and will consolidate sideways for the rest of the week.

The range today is the shaded blue area and the wider teal shaded area for rest of week. With a bias to the down side.

The Bulls are not going to just lay down here. I would expect a bit of a fight down to Spx 970

Spy plan is to wait for retracement to 101.50 and enter a short sell down to 98.75

Pre Market TAO Tues 9-01-09

Overnight ES Futures traded down to 1010 support level I have on Friday's chart.
This is also a Key upward trend line support for the July rally. I don't think the US equity markets will follow this overnight market into the daily session. But this is a Holiday week and trading will be erratic. Asia was up and Europe is down.
US Dollar is holding to a bit of strength.

we have Construction and ISM reports due at 10 am est and Autos at 2 pm est.

The buyers are starting to step aside and let the markets find a settling point I would be careful trying to short sell here it looks like we could make a push up to the Spx 1030 this Am.

My plan today is to Buy the SPY 101.75 Dip at the opening low Spx 1010 and exit about Spx 1027- 30 ...Spy 102.75

--------------------------------------------------------------------------------------------
10:00 am est.... If you went long at the open this is the place to go for the exit Spy 102.80

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.