S&P 500, NDX, January 30, 2010

Let’s take a quick look at a few charts


Not much has changed on the weekly frame. S&P is still at support. There is, as you can see, a confluence of lines and moving averages. We also have a couple of OEW pivots in this area. So, I would not be surprised if index makes a low close in this area and attempts a rally.

Of course, trying to pick a bottom can be very hazardous to one’s health and wealth. So, any attempt should be with discipline and proper planning with specific entry and exit levels.

The weekly chart does not look broken, but it is seriously wounded. It needs serious bull action to force the bears back.


Daily frame does not look very good. Friday ended with a loss of 1090 pivot and the 89 EMA that have been holding the index for a few days. A lost support often becomes resistance and I shall keep that in mind when S&P finally attempts a rally.

There is not much in terms of technical support on the daily chart until the 1061 pivot. Daily frame is getting oversold. So far, short term oversold has failed to get any meaningful bounces. Now the daily is getting oversold into levels we have not seen since November and we just have had a brand new high. The lack of interest on the buy side is not very reassuring, especially after a brand new high for the rally. So, I would not bank a lot of chips on the long side just because the index oversold in here.

S&P has to recapture and hold 1090 pivot, and that would be just a start.

This is a 60-min chart


I have modified the short term count to account for an extended minor wave 3. Index is in a solid short term downtrend and the first thing it should do for the bulls, regardless of the count, is higher high, and then a higher low, and that would be a start.

Support is 1061, and 1041. Resistance is 1090, and 1107.

Long term trend is up. Mid-term trend is down. Short term trend is down (a move above 1098 may change that)

Have a Nice Week!

S&P 500, NDX, January 29, 2010

Let’s have a look at weekly charts


S&P is at support. Notice that the action so far can be seen as a back test of the broken downtrend from 2007.

There is no disaster yet. A lot of softness and negative posture on shorter time frames, as we discussed in the previous post, but weekly still looks OK. For it to stay looking OK, index has to start firming up,

Regardless, it has all the signs of a chart about to roll over. Time will tell whether it will roll over or not

NDX looks like it has rolled over. It desperately needs to pull itself together and climb above its 13 EMA.

It is really hanging by a thread. It can also be seen on a daily chart


Not a lot of room to waste. It needs to pull itself together ASAP.

S&P 500 - January 28, 2010

Another distribution day!

I had thought that we were in for the completion of a first wave down and a bounce. If that was the bounce, it fizzled right away on good volume.

Bulls are not sending very encouraging message in here as they ignore oversold conditions and just stay away from buying

The question is whether we are still sliding down the 1st wave (or wave A), or if that little bounce was the 2nd wave (or wave B)


The recent part of the move down can be counted a number of ways. So, it’s better to focus on the price and see what it does. It has been holding the 1090 pivot. It closed near the low end of it today. It’s at the lower end of the range we had in December (wiping out the entire range run). The force of selling may finally break this pivot and target the next one at 1061. It looks and feels like we are near the end of the first wave, but index has to start making short term higher highs and higher lows.

This area of 1090 pivot has become a very contested area. Not only the 60-min chart has seen the index chopping around, it also corresponds, as we showed yesterday, to the daily 89 EMA and some short term trend lines . This is a current daily chart


It’s not a very pretty situation and needs urgent action to at least stabilize the index around here.

For the day, volume expanded. Breadth was poor.


All these distribution days increase the probability of a climactic volume/breadth down, like a washout event to finish the first down wave. I am not saying it will happen but, as index keeps distributing, more and more formerly happy bulls may get nervous – something to keep in mind.

NDX a really bad day


Another NDX gap that had opened on the way up was filled today. By my count, we have one more hap from the uptrend around 1731-1740.

Notice that we have two gaps on the way down now. It’s like wild-wild-wild west out there at the moment :-)

BTW, NDX has joined S&P and has started a mid-term downtrend

Support for S&P is 1061 and 1041. Resistance 1091 and 1107.

Long term trend is up. Mid-term trend is down. Short term trend is down (a move above 1095 may change that)

Trade Safely!

S&P 500 - January 27, 2010

Finally a rally into the close!

We had a choppy day, but those who survived it witnessed a rally into the close after Fed Show in the afternoon. Indexes stayed firm in the after-hour market and ahead of the US President addressing the US people.

Weekly chart has held firm around the area we had pointed out


Daily chart has been clinging to support


It is sitting on two short term trend lines and the 89 EMA. It really should not drop far below this point or it may start scaring quite a few bulls.

Today could be counted as an accumulation day which is a welcome development after multiple distribution days. It will need a follow through and no more distribution days

Volume expanded and breadth was good

We may have a complete wave set for a wave 1 or a wave A down


I said that I was looking for a divergent low. It seems like we had one today. That was enough for me set aside short term bearish posture and entertain the idea that maybe a rally or bounce was soon to arrive. Notice how the bottom of the range we played in December kept the price. This is an area of support on multiple time frames and via multiple lines and MAs. We also have a 1090 OEW pivot. It will be not be very bull friendly if market cannot stabilize around here and starts selling off with gusto from here.

Support is 1090 and 1061. Resistance 1107 and 1133.

Long term trend is up. Mid-term trend is down. Short term trend is up (a move above 1107 may change that)

Have a Nice Evening!

S&P 500 - January 26, 2010

A distribution day!

The day started with what looked like the promise of a rally. We had a fast a furious rise, and then an equally fast and furious decline


NDX futures looked the same


The way I see this Yo-Yo is that, after a few days of heavy selling, there are some late hopefuls on the short side, and market goes to work on them.

The real test of a rally comes when it corrects. The rally today corrected miserably.

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On the weekly frame, index is at support while momentum looks like it has rolled over


1068 pivot is very important, especially for the weekly frame. Index, if it is still healthy, should at least hold it (or above it) and attempt a bounce.

As we have mentioned, signs of correction are apparent on the weekly frame. They are also present on some mid-term breadth measures


For the day volume expanded on the downside. Breadth was poor


Index has now closed three consecutive days below its 55 EMA. You have to go back to July to see a situation like that. For that time, the consecutive closes below 55 EMA proved to be the end of June-July correction. Whether current action is making the end of the decline like July or not will be known later, but index should, at least, attempt a rally soon if the bulls are still in control and willing to bid the tape up.

Breadth as measured by McClellan Oscillator and the Summation Index does not look very encouraging at this moment


S&P is oversold. In strong uptrends, oversold is soon resolved and rally follows. In downtrends, oversold may stay oversold for a long time. All we know for sure now is that market is in correction. The next bounce, whenever it comes, may tell us what type of correction we are dealing with.

Short term, we are counting the current decline as a wave 1. It may not be complete yet. It may end up being an ABC


If we get an ABC, then the ongoing correction cannot be an impulsive wave C. If we get a 5-wave set before a bounce, the Wave C down scenario stays alive.

In the weekend post I said that I was looking for a divergent low to perhaps signal an end to this leg down. That has not happened yet. It may not happen at all, but, trying to be cautious, I would set that for myself as a requirement to perhaps consider taking part in the bounce.

Tomorrow’s a Fed Matinee. There has been a lot of talk about Bernanke’s re-appointment morass and whether that has something to do with market softness. Talk is cheap; actions are what we should pay attention to.

Support is at 1091 and 1061. Resistance is 1107 and 1133.

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

Trade Safely!

S&P 500 - January 22, 2010

Wiping out December and January gains!

S&P shed 44 points last week, and established a mid-term downtrend.

This is what I wrote regarding the weekly frame in Thursday’s post

There are signs of a correction on the chart, broken uptrend line, rapidly falling RSI, a cross on MACD

And

13 EMA is at 1103 which coincides with our 1107 pivot, and should be a first level of support.

And

It’s a market that needs urgent bull action to prevent serious technical damage.

This is a current weekly chart


1107 pivot afforded a brief pause but could not hold the rush down. And index closed below its 13 EMA for the first time in months.

Index is now very close to the 2007 downtrend line, which it took in December 2009, and about 30 points above the half-range marker (1070) that I had set in August. We also have 89 EMA at 1067 at this moment.

So, if index wants to reverse, or at least pause (bounce?) before another leg down, it should find support somewhere between here (1091 pivot) and our next pivot 1061. A break of 1061-1091 pivot band may cause very serious technical damage and create a lot of overhead supply. So, this week is very important for the index and if bulls are still in control of the market, they should try to stabilize the index and bounce from somewhere in the 1061-1091 pivot range.

For the day, volume was huge. Breadth was bad.


Thursday broke the trend line and 21 EMA that was the support since December. Friday sliced through 55 EMA, and we now have a mid-term downtrend on the index.

We had been pointing out distribution days based on volume pattern, and saying that they were a bit frequent. Thursday and Friday were no exception and downward pressure increased. The question now is whether we have enough of a washout for at least a temporary pause and perhaps a bounce.


McClellan Oscillator is another tool that I use often. I pointed out its plunge into negative territory on Thursday. Friday brought the oscillator down into oversold areas.

This another breadth chart that I frequently present


Referring to the same chart on Thursday, I said that we had breadth sell signals, and that

market is oversold, a good uptrend should bounce from oversold. It is now up to the bulls to show if they are still interested in keeping their rally alive. It should not be difficult for them to jump start a rally as there must be a lot of shorts in the system.

The failure of the index to hold 1107 pivot and bounce from there was a strong indication that the uptrend may not have been very healthy, and the day gave us a confirmed change in OEW mid-term trend.

This what I wrote on January 4

while many and many bloggers and pundits are busy making predictions as to what markets should do, I lay out the picture in front of me and wait for it to tell me what I should do.

So, once again, we followed the charts, we examined probable outcomes, and we did OK – quite well, actually, but let’s not lose our modesty and humility as market is the master and we the followers

OK, we did well, but where do we stand now?

This is a daily count


Well, now comes the moment of truth for bulls as far as wave structure is concerned.

Notice that I have added two alternate bullish counts to the chart.

Long-time readers may remember that, on occasions, I have presented a bullish count with impulsive waves since March.

In order to have a multi-month, multi-year bull market, priced structure should ideally unfold in an impulsive manner with 5-wave advances

We so far have had three waves up from March low. We have been labeling it as a Primary B = Major A-Major B-Major C. But have been keeping a bullish alternate as well.

Now, if we have a bull market, I would like to see an end to this correction somewhere around or before 950, and then another 5-wave advance that would make a new high north of 1150.

That might take weeks or months. But it is something to require from the bulls as it seems like it is becoming their turn to prove themselves.

Meanwhile, I follow the price and try to see where it takes me and what opportunities it may give me.

This is a 60-min chart


First off notice the two pinkish trend line that I said I thought were important. They acted as excellent guides on the wave down, each holding price momentarily and then signaling more downward action as they broke.

We are back to the bottom of the 1085-1110 range that we played on the long side. All of the gains of the December-January players who stayed in two days too long are now wiped out.

We have a brand new extreme low in short term momentum. Waves down so far have been clean. We seem to be is a wave 3 of some degree. If index is going to stabilize and bounce, given the severity of the downward kickoff, I would think that the first attempt might be fake (for a wave 4) and then another push down (for a wave 5) and some positive divergence on momentum.

That is what I am looking for based on past observations. Market may deliver a different thing altogether. So, let’s just pay attention to what market tells us and act accordingly.

We are at 1090 pivot, and the next one down is 1061.

On Thursday, I continued on my daily momentum cycles of S&P and said

there has been two 3-cycle phases, one from March to June, and one from July to November. Each phase had its first cycle registering the highest peak and the following two cycles registering decreasing peaks.

And

the phase that started after November’s mini correction/range consolidation has had two cycles. If S&P repeats it cyclical momentum pattern, we will get another up cycle for momentum, and another upswing of price – maybe after this dip turns for a bounce. There is no guarantee that it happens, but I think it is something worth watching as I monitor the short term count alternatives

This is a current chart


Despite the scary drop, all the bear jubilation, and all the talk of this being a straight drop into depths of hell that only uber-bears can foresee and foretell, the daily cyclical momentum has not yet undercut its previous low. As such, my scenario of another possible daily momentum cycle peak is still alive.

So, given what we have discussed above, if the oversold price and breadth condition help market to stabilize around here, or a bit lower, we may have a three-cycle structure for daily momentum. If that comes to pass, a failure to exceed the previous peak shall, IMO, constitute a third magnitude momentum failure for the entire move from March and would provide a structurally favorable condition for a short to position to nurse for days with the stop being a new high for now, and to be adjusted later.

None of this is exact science and hence all the if and may and might and so on

I emphasize, the above scenario is purely theoretical and is something I am keeping in the back of my mind for a possible longer term hold on a bet against the market. What is more important is price does with respect to levels and pivots that I deem significant.

To Wrap Up:

S&P is in a confirmed mid-term downtrend.

Barring a new high, I am operating under the assumption that we have a top. The challenge is for the bulls to prove their worth and negate that scenario. It’s just an assumption and not a close-mindedness. If the situation turns, I shall turn as well.

Index is oversold. In downtrends, oversold can beget more oversold. These past two days were not kind to the buy-the-dip crowd. Be careful!

Support is right here at 1090 and then at 1061. Resistance is 1107 and 1133.

Long term trend is up. Intermediate trend is down. Short term trend is down

S&P 500 - January 21, 2010

Not a good day for late comers of the bull run!

Things happen!

We have been talking about the technical importance of the 1133 pivot. Today, that pivot was taken as index zoomed down with a lot of volume.

There are two short term counts that I am following at the moment


The above count allows for another run to challenge the high. It will be a real short term blow to the bear jubilee that was so palpable today across the blogosphere and some message boards I visited.

To have the above count clean and trouble free, index should ideally not move below 1107 pivot

This is the other count


Market is oversold. There may be some residual selling, but if the uptrend is still any good, we should get a bounce, and that may tell us which count is more likely.

There is evidence pointing to a looming correction, like distribution days that we have marked, breadth and momentum divergences, price breaking 1133 pivot, price breaking its tight 1134-1149 range to the down side, and the force of the selling today. So, the onus is on the bulls to recover from here.

Some of you may remember my S&P daily momentum cycle studies.

Here’s the current chart


As we have discussed before, there has been two 3-cycle phases, one from March to June, and one from July to November. Each phase had its first cycle registering the highest peak and the following two cycles registering decreasing peaks.

So far, the phase that started after November’s mini correction/range consolidation has had two cycles. If S&P repeats it cyclical momentum pattern, we will get another up cycle for momentum, and another upswing of price – maybe after this dip turns for a bounce. There is no guarantee that it happens, but I think it is something worth watching as I monitor the short term count alternatives

For the day, volume was huge. Breadth was poor.


We said that McClellan Oscillator was oscillating down in the neutral zone. Today it finally gave up the neutral zone and rushed down

We have breadth sell signals on some of my favorite breadth gauges


But, as I said, market is oversold, a good uptrend should bounce from oversold. It is now up to the bulls to show if they are still interested in keeping their rally alive. It should not be difficult for them to jump start a rally as there must be a lot of shorts in the system.

Before leaving you, let’s have a look at the weekly chart



There are signs of a correction on the chart, broken uptrend line, rapidly falling RSI, a cross on MACD

13 EMA is at 1103 which coincides with our 1107 pivot, and should be a first level of support.

It’s a market that needs urgent bull action to prevent serious technical damage.

Support is at 1107. Resistance is at 1133.

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

Have a Nice Day!

S&P 500 - January 20, 2010

The return of the Yo-Yo market!

Remember a while back I said that market had become a day trader’s dream.

It was the post of October 31

Seems like day traders are the only ones possibly having fun these days.

Today may have been another distribution day as volume expanded and breadth was poor. These down days on expanding volume are showing up more frequency lately.

McClellan Oscillators seems to be oscillating downward



So far, price has not materially broken down. There is divergence on momentum. There is divergence on some breadth measures, but index has held in a range.

This is 60-min chart of ES March contracts with 24-hr data


Is it a triple bottom and a flat wave 4? Is it the beginning of a correction? I can’t say. It is a range, 1125-1145 on ES. Cash is +3, 4.

If one’s a good trader, the range may be played. Otherwise, it can be just another chop shop.

To the upside, 1st target is 1187. To the downside, 1st target is 1087

Targets are, of course, theoretical and not guarantees.

This is a 60-min cash index


I think the technical importance of 1133 pivot is quite apparent from the chart. As long it is holds, index can chop around, base, and gather energy for a run at another high.

A break of 1133 pivot may indicate that we have a top at hand pending confirmation from a change in mid-term trend.

I currently observe pivot +/-7

Support is 1133. Resistance is 1168.

Long term trend is up. mid-term trend is up. There is no short term trend, just chop-chop sideways at this moment

Have a Nice Day!

S&P 500 - January 19, 2010

We expected a bounce. We got a bounce.

Not much has changed as far as price levels are concerned. S&P did a successful retest of 1133 pivot. It still has to reach 1168 pivot.

This is a weekly chart


Index has been holding the breakout. It looks a bit overbought. There is good of support from MAs and a number of pivots.

For the day, volume shrank. Breadth was good




NYSE McClellan Oscillator (MO) has been playing around the neutral zone for days now. In fact it has not dipped deep into negative territory since November. Such has been the underlying breadth strength.

But we are making new highs with divergence on MO and momentum.

This is a 60-min chart


The short term wave count is very tricky and recent up and down moves can be counted in a number of ways. I am going to concentrate more on price levels and action around those levels.

Notice that 1133 pivot has held the index and made what looks like a short term double bottom. That pivot has been acting like a strong shelf lately and as long it holds, bears are just out of luck.

For those who bought inside the range back in December, or even bought the breakout, this should be a comfortable situation. Depending on their level of tolerance, they may start thinking about profit taking/hedging, or any risk mitigation they may deem necessary.

For those who want to buy the dips, it may not have been very comfortable as index has not been dipping very deeply and a lot of the activity is still happening in the off hours of the future market.

For shorts, it’s been a vicious cycle of short squeeze, spike, small correction, and repeat.

We said over the weekend that there could be enough shorts in the system to spark a rally. We got that. Now, shorts are burnt and the question is, again, will bulls bid the tape up on their own?

Last week, we had two distribution day, today's new high was not at expanding volume. These things are not automatic tops, they are not very supportive of new positions either.

To wrap up:

Index makes a new high on shrinking volume

We have enough waves to be complete a wave set, and potentially a top. That does not mean that market cannot extend or unfold in a different wave scenario.

Top picking (or bottom picking for that matter) is an ego booster, but it is dangerous and may require a lot of discipline, a stomach of steel, and multiple tries

1133 pivot seems to be the first line of support. A move below 1133 pivot area may change the short term trend.

Support is 1133. Resistance is 1168.

Long term trend is up. Mid-term trend is up. Short term trend is up (a move below 113o may change that).

Trade Safely!

Futures - Holday Session - January 18, 2010

In the weekend post, I said

Well, there must be quite a few shorts in the system now. Looking back at 60-min chart, and the Arms Index, NDX is oversold enough to fetch, at least, a bounce early next week if the uptrend is still good and healthy. That may happen after some residual selling. So, I’ll keep an eye on 1850 area (give or take a few points) and see if index holds it for a bounce, and if so, we’ll see if 1890 craters or not.

Future markets are at it nicely. NQ up 12 points, ES up 5 points as I write

I guess there is nothing better for the future traders than low volume off-hour sessions and enough shorts/stops in the system to start a party.

whether this is a start of a genuine move leading to further rallies in the regular hours or not is a matter of guesswork right now.

So, let's just keep our eyes on our levels for now

NDX 1850 - 1890+

S&P 1133-1168

Happy Martin Luther King Day to our American Neighbors!

NDX, S&P 500 - January 15, 2010

What a week!

This was one of most exciting OpEx weeks that I remember for months – all sorts of crazy price actions on and off hours.

The week had some real curve balls. It’s been bandied about that the bond auction weeks are manipulated lower so that bonds can sell better, well, Thursday was 30-yr bond auction day and any trader who went against the market hoping downward manipulation got it handed to him on that day. It’s a popular belief that an uptrending market roars on higher in an OpEx week. Anybody who banked on that got chopped up and down for the entire week.

S&P had a price range of 20 points for the week but ended -8 points – basically flat. NDX did more poorly and ended -28 points out of weekly range of 45 points - no bullish bias for statistical traders.

We stayed more with our price levels than statistically shaped popular beliefs.

For NDX, I had specified resistance at 1890+



NDX tried a number of times to get past resistance but was rejected each time.



Notice that RSI is at a level that has provided a support shelf for short term momentum since mid-November. Price is sitting on 21 EMA, which has held every pullback since November.

Also notice that MACD did a cross, and RSI, after carryover rally from last year, could have not been able to make it past 70.

For the week, NDX had a number of down days on expanding volume.

If it wants to blast higher from here it should do soon. Further weakness may cause enough damage to the weekly technicals to change trader’s psyche from rally to correction, and, where the psyche turns, price follows.

So, the 1890+ level of NDX offered excellent short entry to traders all week

I had also specified a number of actionary levels for NDX, namely, 1886, 1867, 1850



The actionary levels did well, especially the lower 1850 area that held the drops and offered good long (short cover) entry for trading purposes.

NDX is not broken, but looks wounded. We may have a top, or it may be just setting up for a 5th wave. A sustained move below 1850 will increase the odds of a top being in, targeting 1810 area as a first level of support. I810, by the way, coincides with 55 daily EMA at this time. A move and hold above 1890 may fetch a sizable short-covering rally.

NDX breadth, as measured by McClellan set of oscillators looks soft and in need of urgent reinforcement i.e. money to bid things up



In the Wednesday’s post, I had said

OpEx week is not over yet. But I find it hard to believe there are many shorts still in the system. If not, then either buyers bid it up on their own, or market finds a price and then drift sideways into expiration.

In Thursday’s post I said

I guess bulls ran out of shorts to ride up today.

Friday’s action was in line with our way of thinking about short-squeeze rallies.

Well, there must be quite a few shorts in the system now. Looking back at 60-min chart, and the Arms Index, NDX is oversold enough to fetch, at least, a bounce early next week if the uptrend is still good and healthy. That may happen after some residual selling. So, I’ll keep an eye on 1850 area (give or take a few points) and see if index holds it for a bounce, and if so, we’ll see if 1890 craters or not.

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S&P had a flat week


Overall, it’s been less volatile than NDX. It’s been holding well, so far, after breaking above the 2007 downtrend line



Index had two distribution days last week. It is sitting on an uptrend line from March 2009, and on its 21 EMA that has provided support since mid-December.

S&P’s breadth as measured by McClellan group of oscillators look neutral


Short term frame is quite oversold


Index is inside the 1133 pivot area, and supported by 89 EMA of 60 min frame. As long as 1133 pivot area is not broken, index has a chance of gathering itself and doing a bounce. A break of 1133 pivot will target next pivot at 1107. A break below 1133 pivot area will likely turn the short term trend down. A break below 1107 pivot area will increase the odds for a change in mid-term trend.

To the upside, we have the 1168 pivot and my range target of 1185. S&P’s performance after the range break has been very disappointing in the sense that it could not reach the range’s first target (NDX got there with no problem).

I have two trend lines (in pink) which I think are important in the hours and days ahead. They, coincidentally, provide immediate support around 1133 and 1107 that we just discussed.

I may trade the levels I just discussed on S&P and NDX, but, at this moment, I have no desire to establish a new long index position to hold.

Long term trend is up. Mid-term trend is up. short term trend is up (a break below 1133 may change that)

Support is at 1133. Resistance at 1168.

Enjoy the Rest of Your Weekend!

S&P 500 - January 14, 2010

A somewhat quiet day!

I have been writing more about NDX recently than S&P. No real reason, I follow both, but trade NDX more actively these days as it seems to offer more volatility than S&P.

Let’s take a look at S&P tonight.

This is a weekly


We started thinking about the possible breakout above 2007 trend line early December as we noted the behavior of RSI

On December 8, MACD looked like it was rolling over. On December 14, I noted a possible MACD hook on the chart. On December 24, we finally got the breakout.

Simple TA, nothing to it.

Since then, S&P has done the most important thing a successful breakout should do: sustained price action above the breakout level.

Index is a bit far from its MAs, and that is usually a point of concern for me. 34 EMA is still below 89 EMA and that, coupled with the previous point, makes me uneasy about a brand new position. On the other hand, all MAs look flattish to up, which is how I like them for support. But, please note that a simple drop to 13 EMA, which can happen, will set a brand new position back for a 100-point clip or so.

Weekly chart is good enough (for now, at least) to offer exiting positions a chance to re-evaluate, and the traders the knowledge that the weekly chart is behind them on the long side.

This is a daily chart


Since November, RSI has not been down to 30. For the same period, 21 EMA has held every dip. Shorter MAs are running away from longer MAs and that increases the probability of a price correction/setback.

Notice how, since early December, every rally has started with a spike and then followed by a tight upward channel. That’s one-day worth of burning shorts combined with off-hour future market action that I wrote about a few days ago.

Yesterday, I said

OpEx week is not over yet. But I find it hard to believe there are many shorts still in the system. If not, then either buyers bid it up on their own, or market finds a price and then drift sideways into expiration.

I guess bulls ran out of shorts to ride up today.

This is 60-min chart


We were prepared for the range resolution in December. Since the breakout, S&P has done quite alright. It retested the top of the range once, offering an excellent position entry. It then cleared and retested our OEW 1133 pivot twice, offering good trading entries.

Notice how 89 EMA has kept the two dips we have had since mid-December.

On this frame, as well, MAs are fanning a bit wide and that increases the risk of going long with a new position. We are half way between two pivots (1133 and 1168) and that makes trading tricky as well.

One disappointment for me, so far, has been the inability of the index to run to its first range target the way NDX did. It still may do it but I am having my doubts.

Regardless, support is 1133, and resistance is 1168.

I have two pinkish lines that I think are important trend lines to watch.

Long term trend is up. Mid-term trend is up. Short term trend is up (a move below 1130 may change that)

Trade Safely!