S&P 500, April 8, 2009

some charts courtesy of stockcharts.com

It seems like my post before market open (BMO) was right on the money. Sometimes, I get lucky playing the casino ;-)

Cash Index gapped up slightly, filled the gap, gave everyone enough time to set trades in place, and then advanced modestly up.

The waves of the cash index intraday chart looks so different than the future chart now that it is sort of perplexing. It’s not always like that. I will show you both, but will continue with the future chart as that is what I switched to since I spotted a move on Sunday

This is the 15-minute chart of June contracts


And this is the cash index

So, I have a dillemma.

Maybe I change my count slightly to look like this

You see what I am doing? I am pushing it, forcing it to happen, which I should not do.

I just want you to be aware of a few things.

First, I collect 24-hour data, some of which come at very low volume. Low volume action means low participation, the more the participation, the better the quality of the waves counted by Elliot Wave

Second, some traders ignore certain periods of the future market and only collect during hours that they deem significant

Third, most times, when the short term structure is matterially different, the cash index wins at the end, sometimes, the future chart wins, some other times they converge in the longer run

Fourth, this is for short term monitoring of trading setups and wave formations for educational purposes only, and I am not recommending anything to anyone (read the disclaimer at the bottom of the page)

Since my future chart has served me well, I will continue with that but will keep an eye on the cash chart as well.

So far, this is what I have counted for the whole rally

There it is, my bullish and bearish alternates as I see them at this point.

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For the day, volume increased a bit but was still below average. Breadth was positive.

Look at the Stchastics, so far, it has given two crosses below 80 without price budging. It is a very strong rally that, IMHO, is in later stages of its development.

Looking at things from a daily point of view, nothing has really changed since Thursday as market action has been range bound. Unless, we see serious deterioration in coming days, the probabilities are for the range to break to the upside. So, if I think I can trade, I will trade. If not, I will stay away from new long positions for now, and will re-evaluate existing long positions. Somehow, I don’t feel like shorting this at this time for anything other than day trades. I may change my mind in a New York minute.

Short term trend is up. Mid-term trend is up. Long term trend is down

Resistance is in the widely watched and discussed 850 area, support comes around the 800 area

Food for Thought: From what I gather hopping the blogosphere, many have plans to short 850 and buy 750. Will market accomodate them for entries at those levels? Will it turn short of those levels to keep many waiting, and waiting? Or will it run enough distance through them to pop as many stops as possible before turning the other way?