WELCOME

Welcome and thank you for visiting!

The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...
please read my full Disclaimer at this link.

Dots

...If the dots don't connect, gather more dots until they do...

Paris

Paris

Events

UPCOMING (MAJOR) ECONOMIC EVENTS...
* Fri. Oct. 6 @ 8:30 am ET ~ Employment Data
* Wed. Oct. 11 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Wed. Oct. 18 @ 2:00 pm ET ~ Beige Book Report
* Tues. Oct. 31 ~ 2-day FOMC Meeting Begins
* Wed. Nov. 1 @ 2:00 pm ET ~ FOMC Announcement
* Tues. Dec. 12 ~ 2-day FOMC Meeting Begins
* Wed. Dec. 13 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts + @ 2:30 pm ET ~ Fed Chair Press Conference
*** Click here for link to Economic Calendars for all upcoming events

Thursday, July 21, 2011

Seeing Double?...YM, ES, NQ & TF...

Am I really seeing double? As I look at the Daily charts of the YM, ES, NQ & TF, I'm noticing something else besides their large sideways trading ranges since the beginning of the year...and that is the attempt to form double cups & handles. The first formation is delineated with the pink numbers, and the second by yellow ones.

Apparently, V-bottom cups don't produce as strong a signal for the handle to break out by 100% of the depth of the cup as the ones whose bottoms are more rounded. The first cup's attempt to form a 100% handle extension failed on the YM after a V-bottom bounce. The second cup's bottom produced a double bottom (and came close to hitting the bottom of the first cup) and bounced off the rising 200sma (pink). A potential handle is forming after a 50% fib retracement and bounced off the flattening/falling 50sma. A 100%  handle breakout from the top of Cup 2 could, theoretically, push price up to around 13600 by the end of August if the rising trendline trajectory plays out. However, volumes on the handle pullback should be lighter than those on the right side of the cup...the volumes on this pullback are heavier and may thwart such an attempt. Also, as I'm writing this during today's intraday action, volumes on this last bounce are lower than the last pullback. It remains to be seen as to how this will play out.



The first cup's attempt to form a 100% handle extension failed on the ES after a V-bottom bounce. The second cup's bottom produced a double bottom (and came close to hitting the bottom of the first cup) and bounced off the rising 200sma (pink). A potential handle is forming after a 60% fib retracement and bounced off the falling 50sma. A 100% handle breakout from the top of Cup 2 could, theoretically, push price up to around 1450 by the end of August if the YM's trajectory plays out and this follows suit. However, volumes on the handle pullback should be lighter than those on the right side of the cup...the volumes on this pullback are heavier and may thwart such an attempt. Also, as I'm writing this, volumes on this last bounce are lower than the last pullback. Additionally, a fib retracement of anything greater than 50% dilutes the chances that this is an actual cup and handle formation. It remains to be seen as to how this will play out.


The first cup's attempt to form a 100% handle extension failed on the NQ after a V-bottom bounce. The second cup's bottom produced an inverted H&S formation (and re-tested the bottom of the first cup) and bounced just beneath the rising 200sma (pink). A potential handle is forming after a 40-50% fib retracement and bounced off the flattening/falling 50sma. A 100% handle breakout from the top of Cup 2 could, theoretically, push price up to around 2650 by the end of August if the YM's trajectory plays out and this follows suit. However, volumes on the handle pullback should be lighter than those on the right side of the cup...the volumes on this pullback are heavier and may thwart such an attempt. Also, as I'm writing this, volumes on this last bounce are lower than the last pullback. It remains to be seen as to how this will play out.


The first cup's attempt to form a 100% handle extension failed on the TF after a V-bottom bounce. The second cup's bottom produced an inverted H&S formation (and re-tested the bottom of the first cup) and bounced off the rising 200sma (pink). A potential handle is forming after a 50-60% fib retracement and bounced off the falling 50sma. A 100% handle breakout from the top of Cup 2 could, theoretically, push price up to around 940 by the end of August if the YM's trajectory plays out and this follows suit. However, volumes on the handle pullback should be lighter than those on the right side of the cup...the volumes on this pullback are heavier and may thwart such an attempt. Also, as I'm writing this, volumes on this last bounce are lower than the last pullback. Additionally, a fib retracement of anything greater than 50% dilutes the chances that this is an actual cup and handle formation. It remains to be seen as to how this will play out.


In any event, the intraday swings continue to be large, sharp and unwieldy as this unconfirmed formation attempts to be built by the MM's in their bid to push the markets higher without any additional QE at the moment.