A diamond in the rough?...

While putting several trendlines on my NQ Daily chart this morning, I noticed that a diamond pattern may have formed and been broken to the upside. I've drawn the outline in pink on the chart below. I've drawn arrows where I think that Resistance (top arrow) and Support price levels may lie. Interestingly, these levels also co-incide with Fibonacci fan lines, also shown. One of the Support levels happens to lie at the current price level of the 50sma (red). This is one chart that I'll be watching during the coming week(s) to see which way it plays out, because from the first chart in my post below, the NQ has been looking rather tired lately on its Weekly long-long journey, in comparison with the other 3 e-minis. It may provide clues as to whether this latest pullback continues at some point and for  how long, or where and when the 4 e-minis find support before resuming their upward trek.

Is it the beginning of the end or the end of the beginning?

     Is it the beginning of the end of the big rally that started in March 2009? Or, is it the end of the beginning of a pullback that started this week? Perhaps the answer lies in this fairy tale...

     Once upon a time a group of traders, whom I'll call "Triple O" (because I like "Triple O" cheese burgers from Whitespot), decided to take a very long-long walk. Their walk began in March 2009 and saw them following a steady course to where they are today.

     First, "Triple O" needed to buy some walking tickets from the local bucket shop so that they could pay for their long-long walk. Sometimes they needed to stop in at one of these shops along the way so that they could cash in their tickets and pay for some rest and relaxation at either the "local resort" or go back to one of the others they'd passed along the way that looked more interesting...and sometimes they decided to try an out-of-the way place at a town off the beaten path that the locals said was worth visiting. Once they'd been "fed, watered, and relaxed," they stopped in at the local bucket shop and bought some more walking tickets for the next leg of their long-long walk. Sometimes they took short-long walks, and sometimes they took short-short walks and meandered a bit...how much they meandered may have been caused by how much they'd been "relaxed" and at which "resort."

     This past week saw "Triple O" cashing in their tickets on Monday at the last bucket shop they visited after a short-long walk and they went for a short-short walk back to the local watering hole. I'll pause the story here for a moment and illustrate "Triple O's" walk so far on this picture below:



     The "Triple O" gang are represented by the squiggly green/red line and the local bucket shops and "local resorts" are located along the broken pink line. The gang's short-long walks and short-short walks to other "resorts" and their "relaxing activities" at each one are illustrated by how far they strayed away from this broken line and on which side of the line they walked.

     We'll take a closer peak at "Triple O's" activities this week to see if we can find any clues as to where they may go next week. The picture below shows that they mainly enjoyed staying fairly close to the "local resorts" for the first part of the week while taking a short-short walk. But, by Wednesday, and particularly, Thursday, they took several quick short-short sprints to a couple of really far away out-of-town places. I think that the action there was too hot, so the gang meandered back to the local scene and cashed in their sprinting tickets, but were quite wobbly after their hot visit. So, on Friday, they decided to cool off quickly, bought some running tickets and went for a short-long run to another out-of-town place that they heard was even better, but had to cut their "relaxation" short and return back quickly to the local bucket shop to cash in their running tickets and buy some driving tickets because now they needed to make a quick detour to Mom's for the weekend.

     And here the story ends, for now...the "Triple O" gang is resting locally at Mom's where the temperature is just right. They really haven't veered off their long-long path...yet...as we can see from where they stopped on the first picture. We'll see how their journey continues next week...maybe some of them will extend their visit with Mom and join up with the gang later on.

     And, in honour of Moms everywhere, I would respectfully direct you to the post below...



Happy Mother's Day...

Happy Mother's Day to all mothers from SB & Smudge:

...and from the rest of your brood:

Not everyone on board yet...

Today was a short-sellers dream in the world of commodities, forex and many ETF's.

ZF, ZN & ZB closed near their highs today and over their prior swing highs set in January and March of this year, as seen on this Weekly chart grid:

The following Daily chart grid shows possible IH&S patterns on these futures beginning from last December with a close above a neckline break...will see if this neckline area holds as support if price retests this level:

Although YM, ES, NQ & TF closed down again today, today's intraday action saw some rather large swings in both directions...it would seem that not everyone is holding yet on the short side on equities, particularly in NQ...today's close is shown on the 4-hour chart grid below:

Each candle on the next chart grid of YM, ES, NQ, TF, & NKD represents 3 days/candle. The current candle is Day 2 and will finish tomorrow. As can be seen on these charts, the overall uptrend from last July is still intact:



In my view, the "pulse of the patient," as it relates to the markets, is the last closing price of that patient. Tomorrow, I'll be checking the pulse of the e-mini futures relative to today's close, as well as tomorrow's Daily Pivot Point to gauge the directional preference, as well as evaluating momentum and internal volatility patterns (eg, large vs small swings/reversals). I'll include tomorrow's action on NKD, as well as the behaviour of the commodity, forex and bond markets. Their actions will have to convince me that short-selling is still the "order of the day" and in my best interest (and good for my pulse)!

Judgement Day...

As can be seen on the 4-hourly chart grid below, YM, ES, NQ & TF are flirting with their respective levels of support that have been formed over the past days or weeks:

The chart grid below shows Daily candles on ZF, ZN & ZB, which are in the vicinity of prior resistance levels...as well as FVX, TNX & TYX, which are in the vicinity of prior support levels:

Below is a chart showing Stocks Above 20-Day Moving Average (this chart and the next two are courtesy of http://www.barchart.com/):

Below is a chart showing Stocks Above 50-Day Moving Average:

Below is a chart showing Stocks Above 200-Day Moving Average:

As can be seen on the three charts above, each one is in the vicinity of prior support.

It is my view that any further significant decline on YM, ES, NQ & TF would need to penetrate and hold beneath recent support levels on sufficient volumes and momentum, along with the continued advancement of the bond markets, in order to signal a possible reversal of their daily uptrends in the making. As usual, I'll be viewing intraday price and volume action around their Daily Pivot Point levels, as well as other market internals, to determine direction on a daytrading basis.

In addition, I will be keeping an eye on NKD (see chart below) which did fill its post-earthquake gap-down @ 10,005 but did not close above and has fallen back to the 9800 level...as well, the 50sma (red) has X'd below the 200sma (pink) on the Daily chart...price has been struggling between 9400 & 9800 for quite a few weeks now:

TF and Confluence Levels...

Chart #1 shows today's close on the TF...each candle on this chart represents 3 days...the last 3-day candle ended today and has formed an outside bearish engulfing candle:

Chart #2 is a Daily chart of TF and today's candle has closed below a Fib combo and Regression Channel confluence (Zone #1):

Chart #3 is a 60 min chart of TF which shows where price bounced near the end of today at a Fib confluence level of 836.50:

Chart #4 is a 4 hour (market hours only) chart of TF which also shows this bounce level:

Chart #5 is a 30 min chart of TF which shows the current downward sloping Regression Channel for the past 2 days:

If the TF continued down at its same momentum over the next several days, it could reach a level of 800.00ish by Thursday or Friday of this week. In my opinion, however, it would have to break and hold below 836.50 firstly, and, subsequently below 830.00, then 820.00, and 813.40-809.00. There is also an unfilled gap from 831.60 to 824.30 which could hold as a level of support. One gauge I'll be looking at is the price action around each day's Daily pivot point...tomorrow's PP is @ 844.00...I'd be generally looking for any continuing and sustained weakness below that level, and, especially below 836.50, and drilling down to lower timeframes to look for any shorting opportunities on a daytrading basis...and, as usual, take into consideration the daily market factors/influences. Otherwise, I'd be looking for long entries above 844.00, all things being equal.

A case for Gold target of 1660-1670?...

3 charts of Gold with confluence points zeroing in on 1660-1670...potential target?...(timing unknown)

And the sun sets on another month...

Photo taken by astronaut Douglas Wheelock who was aboard the International Space Station:

How the month of April ended for...

Daily chart of Gold:   (Hint: to open each chart in a separate window, right-click on the chart and select 'Open link in new window')

Daily chart of Silver:

Daily chart of "Gliver" (comparison chart of GLD & SLV):

3 days/candle chart of Copper:

Weekly chart of Oil:

YM, ES, NQ & TF Monthly chart (note that price closed at the end of April above the neckline of a Daily IH&S...see Daily chart following):

YM, ES, NQ & TF Daily chart showing neckline & potential upside target:



YM, ES, NQ & TF 60 min (in essence, the Daily PP, which is the horizontal pink line, has held as support each day for the past three days):

April ended on a very bullish note, indeed. Generally, and on an intraday basis, I'll look for the same bullish pattern to continue next week for the YM, ES, NQ & TF, as noted in my comments on the 60 min chart, and drill down to lower timeframes to look for entries until this fails...assuming market internals are supporting this pattern each day.

No Post-Market Review Tonight...

I likely won't be posting a market review today, as I have other commitments.

The Moment of "Truth" has arrived...

Here's how the VIX closed the day relative to the Monthly, Weekly & Daily charts (Hint: right-click on each link to open a chart in a new window):

http://screencast.com/t/oFWJDINTWrA

http://screencast.com/t/ieCFQpnFTuY

http://screencast.com/t/STfgepg4ZBc

Here's how YM, ES, NQ & TF closed the day relative to the Monthly, Weekly & Daily charts:

http://screencast.com/t/88gnTTDo

http://screencast.com/t/YurLTdGO

http://screencast.com/t/dpbXgsUn6Dq

With today's breakout on the Daily charts (post-Fed meeting results) on YM, ES & NQ (however, TF failed to break its last swing high), and the Fed's decision to keep rates unchanged, it would appear that the markets have been given the blessing to make their way back up to at least the 2007 highs unhindered (NQ is already there & TF hasn't far to go), while allowing the VIX to fall to its 2007 lows. Perhaps when the VIX has reached those levels, it will stabilize. As a first-stage confirmation of this potential scenario, I'll look to see if the breakout levels on the 3 e-minis can hold in the near-term and whether the TF will follow suit. On an intraday basis, extreme bullishness tomorrow would be confirmed to me by tomorrow's Daily PP's (dotted pink horizontal line) holding as support as shown on the 60 min charts, with price continuing upwards from there and a closure over today's highs:

http://screencast.com/t/WDCQynlOnm

It also seems that the Fed is ignoring what the NKD is doing...until another future disaster possibly occurs in Japan. After the earthquake, the YM, ES, NQ & TF basically traded identically to NKD, but the recovery of the NKD has not taken place to the same degree:

http://screencast.com/t/tUldJ0BS6xO

Pre-Fed Tuesday Summary...

Of the 4 e-minis, only YM has pushed and held above prior pivot resistance on the Daily chart so far:

http://screencast.com/t/hBQsWYZ3

At the moment, YM, ES, NQ & TF are all sitting above tomorrow's Daily PP (dotted pink line), as well as their 21ema's (broken white) & 50sma's (red) on the 60 min charts...I'll be watching intraday action tomorrow relative to these levels: 

http://www.screencast.com/users/strawberryblonde/folders/Jing/media/338f9c72-a15e-44fb-ba88-b6054354a9ee

The April Monthly R1 and PP levels for the 4 e-minis are as follows (in theory, potential targets for the remainder of this week/month):

YM R1 = 12571       YM PP = 12011
ES R1 =   1358.25    ES PP = 1299.75
NQ R1 = 2415.75     NQ PP = 2300.75
TF R1 = 866.60        TF PP = 818.40

No participation in today's advance from NKD today:

http://www.screencast.com/users/strawberryblonde/folders/Jing/media/3d671948-8d85-4cc9-9b30-daa9f5fafcd3

Any longer term bullish bias on my part would have to be confirmed, firstly, by all 4 e-minis breaking and holding above the above noted pivot resistance levels and, secondly, a gap-fill and a sustained close and move upward above 10,000 on NKD (pre-earthquake level). The longer that the NKD stays within its current sideways basing zone, the more I wonder about the overall health of Japan's economy, as well as the "real" state of the nuclear reactors...(this is my natural skepticism coming into play here and my take on how I view Japan at the moment...other more influential traders could, of course, discount/ignore this until and if a worse disaster occurs there). I've also still got the 80.00 level up on my radar on USD/JPY to see if price holds above it or not (the seemingly-agreed-upon level by the US and Japan)...price is currently below the apex of a broadening triangle on the Daily chart:

http://www.screencast.com/users/strawberryblonde/folders/Jing/media/a43e53a2-839f-4b02-9087-23b8eb8957fb

We'll see what the Fed delivers tomorrow and what the market's reaction is in the short term.

Pre-Fed Monday Summary...

I have several general observations for YM, ES, NQ & TF only tonight...

Daily charts: This screenshot shows the daily see-saw action since Feb. 21/11...price is currently in the vicinity of an IHS "neckline." So far, price has bounced back above the 50sma (red) after being broken several times since that date.

http://www.screencast.com/users/strawberryblonde/folders/Jing/media/23765682-7f9a-4ebd-8ce2-f69195c74733

60 min charts: This screenshot shows recent price consolidation relative to the "neckline" area on the Daily chart...price is either above, below, or around it and is either above, below or around chop area from early April.  The 50sma (red) X'd above the 200sma (pink) around mid-week (last week)...price is now contained within a tight sideways channel since then and is now near the steeply rising 50sma.

http://www.screencast.com/users/strawberryblonde/folders/Jing/media/beed5bf3-4116-499d-afce-d2ac95f13ae1

Tomorrow I'll be watching price action relative to the latest sideways channel on the 60min charts to see if any meaningful and sustained movement occurs outside of it on decent volumes in either direction...I'll also be watching to see if price bounces around in between the 50 & 200sma's. In any event, I'll drilling down to smaller timeframes for any further clues throughout my trading day. Volumes were generally lighter today...will see if the markets are willing to make a committed move before the Fed announcement.

Easter Weekend Bottom Line...

The Fed has pushed the markets to unhealthy extreme levels as evidenced in my weekend posts below...if they insist on continuing along this same path, then they are simply running on "Artificial Intelligence," in my opinion.

That being said, I'll have to see how the markets trade, either continuing to bounce around in between their Daily support and resistance levels (see "Fat Finger" post below for chart grid of YM, ES, NQ & TF), or whether they break out on sustained momentum in either direction...in order to daytrade within the confines of any of these scenarios, I'll be drilling down to smaller timeframes and using my little "bag of tricks" to see whether any decent trades set up on TF before the Fed meeting on Wednesday. The potential exists for some big moves, as well as a "fizzle" until then. The key to all of this may lie in volume levels...will see how all of this plays out.

"Intaxication" -- Euphoria at getting a tax refund, which lasts until you realize it was your money to start with.

Elephants on the run...

http://www.screencast.com/users/strawberryblonde/folders/Jing/media/9ad4090c-7212-43c7-9989-d84ae6dcf47f



'Gliver' on the run (a comparison chart of GLD & SLV):

http://www.screencast.com/users/strawberryblonde/folders/Jing/media/a3fbd7a2-490e-4dc1-aded-4d6039af75ab

Silver (attempted breakout of an even steeper uptrending regression channel...more Fib confluence above):

http://www.screencast.com/users/strawberryblonde/folders/Jing/media/ff074147-7b5d-4d8b-a17b-4fa1f5ffb988

Gold (continuing its upward climb towards Fib confluence):

http://www.screencast.com/users/strawberryblonde/folders/Jing/media/9db6ec45-9e61-4226-9ad7-ff8bdb28475c

Gold and Silver are running...I won't be trying to stop them, but will simply watch for signs of either continued strength or any developing weakness and their relationship to the overall markets.