:: actio-et-reactio ::
amg's market charts and blather
NDX price is behaving as if trapped in a tight range with buyers "on strike" but sellers not desperate. Relative strength lies with the SPX/DJ complex. Seasonality favors a short oversold rally to resistance.
(The 60m chart below is still in play. Support resistance shown as horizontal lines.)
After that quite unexpected morning exhuberance spike on the Consumer Confidence numbers, yesterday's ugly close played itself out with a late day sell-off. Technically, a case can be made for further gains as, for the NDX, price is at lower pitchfork, with confluence with various geometric supports. The SPX 60m chart is a bit more troublesome, but if anything, somewhat oversold.
There is a rather "obvious" VV on the 60m charts, with a mild positive divergence that is now playing out. The mid-point of the VV is ~1450, which continues to be a formidable battleground. The next two geometric resistances are at 1488 and 1519, with support 1411 to 1418.
The dominant trends continue to be down.
Yesterday in my stockcharts.com comments I considered that if there were futher downside for the NDX, it could be short lived, with a rebound to the mid/upper Andrews on both the 60m and daily charts. Looking at todays charts, I'm far less sanguine. They sure look ugly for the short term with todays prices closing at the lows. At this point, expecting consolidation around the 50% retrace of recent rallies looks less likely. Well, tomorrow is another day!
I love those zen sand and rock gardens, with the careful raking suggesting rippling water.
Double tops (1734:1710) and double bottoms (1330:1356) create a number of lines in the sand. Toss in the next bigger picture (ie, the 9/11 lows) and the chart looks more like a raked Zen garden. One image of this I showed recently was the Andrews drawn off prior gaps. I have also described likely turn points as "ranges". Combining retrace methods with the Andrews turns the words into a picture.
The 1488 "line in the sand" is a particularly strong one as it results from two rallies. Going back to the idea of the lines created by double tops and bottoms, this current swing is itself moving within a range, from 1472 to 1492. Call it the shakeout zone. If it indeed turns out to be a very short term bottom.
So, how does one know if there is indeed a reversal or a continuation at this time? I don't think anyone knows, but the Andrews can be a guide. There has already been a significant reversal with the recent island top. There is pretty decent support given by the confluence of two Andrews (red & purple) right here (1480). IMO, it may be "locked" to below 1492:1519 as the more "powerful" rally(the lime-green eminating from the stronger rally pivots) suggests further correction in order.
Should price break down through the red-purple forks, it would suggest the full move to the lime-green, whose target right now is 1452, also the 50% retrace of the little rally to 1573.
[tried to post this since 10am, but our friendly Booger, er Blogger agent, has been out of sorts]
My best visualization of the near term NDX is this Andrews chart (the page will open in a separate window).
If Elliott waves make you seasick, you might consider putting elbow grease into using Andrews pitchforks. The premise is simple: projecting the half-way point between two price extremes creates a map in both time and price. Like a pendulum, price will move between those extremes, and sometimes along the "trendlines". Jumping the track signals a change in plan, at which point one uses prior or new Andrews to create a new map. Users of Fibonacci and Gann will see Andrews as complementary as it often projects similar patterns. As a belt and suspenders approach, traditional TA indicators like RSI, MA, etc, can affirm your observations.
While there are "rules" laid down by Mr. Andrews, his students, and modern users, the best teacher is your constant and consistent use of the tool.
Nuts, closed at 1487, one point below my line in the sand of 1488. Thought there'd be more of a tussle, with at least one more shove higher, minor resistances at 1504, gap resistance at 1519. Maybe tomorrow, partic. as there have been two days of significant down action. 1452 is the next lower target, which is itself in a range from 1440 to 1470. Deep pocket traders are short, day and swing traders are getting mixed signals and are likely flat or taking tight-stop scalps.
Bounced quite a bit between the 1504 caution and 1511, the bottom of the bullish range. 1504-1492 is the get ready to sell range. A clean break of 1488 puts us in the clearly weak zone. Not losing sight of the fact that this is OE week, which is also a triple witch, adding an even greater dose of uncertainty to the usual chaos.
The range I'm now watching is NDX: 1511:1555, with particular interest if price moves above 1518 and holds it on a retest. As always, this is FYI and specific to my own trading plan. 11am pst edit: Forgot to mention that 1504 is the low caution.
[ Blogger is still whack, was time-stamping the entries WRONG, looks fixed, but is it??? NO ]
I mentioned yesterday that a close below 1532 opens the door to lower lows. I musta been asleep at the console as the gap down open, which created a "price island" on the Nasdaq, was unanticipated. It is not a good sign for bulls. These smallish gaps have backfilled before, only to recorrect after.
Todays COMP low did hit the exact midpoint of the 2066:1697 move (1880), however the NDX punched lower. Being fundamentally skeptical of the new-found bullishness, I tread lightly and while acknowledging the power of bullish sentiment to move price, respect the pull of gravity. Capital preservation remains my guiding light.
One interesting observation is the 60m Nasdaq. I brought back the AB=CD chart, which nicely called the 1330 reversal. Price returned to the "B" high (1564), just at the "equi-time" half-cycle position. It looked like a reversal, at least a pullback, was likely and we got it. I do love when price and time come together, even as sloppy as this pattern was! Now, to better act on these (gg).
Regarding the COMP and NDX chart showing Median Lines off prior gaps, I wrote yesterday,
Looks like the cat got into a ball of yarn. However, looking closer, what I've done is create pitchforks off prior gaps. They all meet at ~1900 [COMPX; 1530 NDX] as that is the midpoint of the 2nd top and the recent bottom. That price jumped that spot on Friday shows the strength of the move. Even so, take a look at the 60m chart lower down, which indicates the move may be capped (for a pullback? for a reversal?). Question is, "when"? I vote for Monday, based on the 60m NDX chart discussion lower down.We got a bit of both today, an early morning pullback with a midday recovery, leaving us pretty much in place, which qualifies as "consolidation". Price is holding above the 50% point of various hi-lo moves, which lends strength. A close above 1573 opens the door to 1591-1615. Closing below 1532-1536 opens up the possibility of more than a pullback.
I was horrified to see that it had been nearly a month since I post to the "Nasdaq comments" page. Gotta face up that there's no cheese in it for this rat, so I'm going to mothball that page as an idea whose time has come and gone. Not that my fascination with the Nasdaq has diminished, hardly. But this page will henceforth serve all diners.
Not all downtime was due to my slacking off... the software agent (BloggerPro) has had its share of problems during the upgrade. Just now, it is up and running, however, I find my mind down (gg). Be back in a bit with some pith.
Checking in, now that most computer problems are behind me. I still need an FTP client, preferably one that is free, not spyware, and really XP compatible. Things are running so smoothly I am reluctant to introduce a crash agent!
Speaking of PC glitching... I noticed that I was far from alone in these problems these past few days. Perhaps it was a case of looking for commiseration, but not only was my system whacko, but Yahoo!Groups had a major down-time to install system upgrades, as did Blogger, also to install various upgrades. I also read of fellow traders having system problems and for the first time in many many months, the DirecTV signal crashed, ostensibly due to solar activity, which I occasionally watch. I find this "clustering" curious, but being undisciplined in my tracking of it, of little other value.
OK, wither the market. This move off of 1330 on the NDX has had remarkable strength. It represents a full 62% retrace of the 1734:1710 double top. Time and Price certainly did meet, which is represented by the AB=CD pattern I showed on the 60m chart and at this point is an 18% winner. What I find most interesting, though, is that price hit 1562.97, which is 1.5 points over the "B" price 1561.4. Even more interesting is that price hit it at the equi-time half-cycle (the 6th yellow bar on the chart). I don't have an FTP client, so please go to stockcharts.com to view the charts.
Checking in, now that most computer problems are behind me. I still need an FTP client, preferably one that is free, not spyware, and really XP compatible. Things are running so smoothly I am reluctant to introduce a crash agent! Speaking of PC glitching... I noticed that I was far from alone in these problems these past few days. Perhaps it was a case of looking for commiseration, but not only was my system whacko, but Yahoo!Groups had a major down-time to install system upgrades, as did Blogger, also to install various upgrades. I also read of fellow traders having system problems and for the first time in many many months, the DirecTV signal crashed, ostensibly due to solar activity, which I occasionally watch. I find this "clustering" curious, but being undisciplined in my tracking of it, of little other value.
OK, wither the market. This move off of 1330 on the NDX has had remarkable strength. It represents a full 62% retrace of the 1734:1710 double top. Time and Price certainly did meet, which is represented by the AB=CD pattern I showed on the 60m chart and at this point is an 18% winner. What I find most interesting, though, is that price hit 1562.97, which is 1.5 points over the "B" price 1561.4. Even more interesting is that price hit it at the equi-time half-cycle (the 6th yellow bar on the chart). I don't have an FTP client, so please go to stockcharts.com to view the charts.
I want to apologize if I have not replied to a "note to amg" you may have sent recently. My PC has been in a turmoil and after various WME recovery/reinstalls/run/crash cycles, I finally went to Windows/Office XP with a full upgrade of our internal network. In the three days of running the new system, it has been absolutely flawless. In the process, I know I trapped some mail, but lost lost quite a bit. Almost back to normal -- have to figure out if I installed the new system on the wrong (ie, smaller) partition and if this will bite me down the road. Best fix it now while I haven't completely aclimated to a comfy routine . Back to more focused market "stuff" real soon!
I wish I were in as high spirits as the market has been! My brain is drained from an excess of computer problems this week (incl. breakdown not only of OS, but of network h/w)... So, I've mostly watched from the bleachers being too distracted to concentrate.
Nevertheless, I will make bold to say that despite the high spirits a few days this week (both up AND down) the NDX does not convince me of its new found bullish prowess.
Simpleton here has watched the gap/fib action and the prior essentially single repulse from the 50% had been quite puzzling. Now that it is being revisited, and with today's cash close 1435.6 just shy of filling the gap, I am heartened that distribution is still in place and that the April rally analog is not dead. I look at the open/close values of gaps, not just the hi/lo tails. The gap range is 1421:1436.7.
So, while I'm loathe, given my mental state, to give a likely target for the top of the NDX rally, I see a bit of overshoot and then a reversal, maybe even as early as Monday (time is not my strong suit). My crayon Andrews tend to validate this view. There was a similar phase during the April rally when "double bottom" calls were the vogue. The reaction rallies were strong, but in the end did not take out the May 22 high.
(I still don't have my FTP program operating and can't upload images, so here is a link to my charts at stockcharts.com)
|
moon phases |
At last, over the rim
of the waiting earth
the moon lifted with
slow majesty
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows
blather: nonsensical talk.
At times my analysis log, at times sharing what I've learned. Always my own work and views.
Content: amg
Basis: glish & bluerobot
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