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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
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Thursday, December 01, 2011

Brrrrr...it's drafty in here!

One thing I've witnessed over the years is that opening gaps have eventually been filled. Below is a 20-day 30-minute (market hours only) chartgrid of the YM, ES, NQ & TF.What we have here are 4 unfilled gaps on these e-mini futures indices...one gap down on November 21st, another gap down on November 23rd, a gap up on November 28th, and another gap up on November 30th. We're also left with two bear flags without the poles and two bull flags without the poles.

I don't know about you, but I don't know of any flag that can fly structurally without its pole. In my opinion, this puts into question this latest bull run up from November 28th...and, it's just a matter of time before these gaps are filled...the million dollar question is, "When?"

Springheel Jack, a fellow trader, for whom I have a great of respect, posted an article on the Financials ETF, XLF, earlier today: http://channelsandpatterns.blogspot.com/2011/12/xlf-declining-resistance.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ChannelsAndPatterns+%28channels+and+patterns%29

His post prompted me to review my own chart of XLF...below is a Daily chart...on it, I see the same 4 gaps as we have on the e-minis. Near-term resistance is 12.84 and support sits at 12.60. My above comments apply to the gaps seen here, as well...they need to be filled in to establish a credible and sustainable bull run, in my opinion. And, as Jack concluded in his post, I've also mentioned repeatedly in previous posts that the equities markets need the financials on board in order to sustain a longer-term and meaningful bull rally with conviction.