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Wound Up

March 6th, 2009 at 11:57am · 6 Comments

With the 11:45 AM bar on the 135 minute chart having just closed, it’s a good time to take the measure of the market. First, let’s look at the net-lines. The sell net-line on the 135 minute chart at 699 clearly proved the road block to the morning rally, as prices stopped at 699.25 before reversing. On the 60 minute chart, a sell net-line at 680.50 was triggered on the 11:30 bar.  So the net-line picuture is decidedly bearish. In the midst of strong trends, it is often only the net-lines that keep you on the correct side of the market has oscillators will invariably begin to diverge and signal too early.

And that early signal may be what we’re seeing here, as the modified DMX has positive divergences on both the 60 and 135 minute time frame.  At this point, the downside price action makes this market somewhat like a wound spring that is ready to reverse and pop higher in a violent fashion. The modified DMX is telling me it’s not worth it to press one’s luck on the short side, while the net-lines are telling me the trend is still down.  Perhaps prices can get down to the lower channel on the 60 minute chart today (662). But be aware there is the potential for a slingshot reversal higher later today. I wouldn”t want to be caught on the wrong side of that move.

In other news, the rally of the past two days in gold means the weekly chart will be unable to close below our key 933 level. The long-term bullish case for gold is intact.

click chart to enlarge

click chart to enlarge

Tags: General Market Commentary · Gold · S&P 500

6 responses so far ↓

  • 1 bob5e // Mar 7, 2009 at 12:12 pm

    I have the next Gann SQ9 (0/360 degree) line at 638 . . just in the vicinity of the lower Price Cycle-Trap line on the 135 minute.

    The bottom is getting near . .

  • 2 fish48 // Mar 7, 2009 at 10:55 pm

    Good Vibration, Ok bob5e I can tell you need a little confluence on that loose Gann wheel of yours. If you remember, Fri 3/5/99 the Spx closed at 1275.47 and of course 50% of that is 637.73. That close held up to minor probing until the week following E-week of 3/23/99 when she closed down at 1262.14. You probably had to spin that wheel at least 7 or 8 times off the 10/10/07 close of 1562.47 to arrive at your vibrating figure I would think:))
    .fish

  • 3 bob5e // Mar 8, 2009 at 12:16 am

    Hey Fish . . I gave up on all the esoteric Gann computations long ago. Now use a spreadsheet I got from qball . . much easier than spinning. I admit I’m lazy but it has always provide useful levels for my trading. If interested, I can forward it to you . .

  • 4 dave // Mar 8, 2009 at 2:35 pm

    I see Wednesday March 11th as the prime candidate for a turn higher (wave 4 of 3 of 5) based in spiral calendar alignments and tides/gravity. Looking at Tom’s tides tables I see 5 out of 6 tidal measures have an extreme on that day.
    Posted charts at http://spiraldates.com/?p=115

    I also see spiral calendar alignments in Gold for this weekend 3/7/09, suggesting gold will turn lower.

  • 5 BearOfNH // Mar 8, 2009 at 4:58 pm

    Nice tide chart, dave. Wish I’d thought of that display format.

    The jury is still out on where best to measure tidal forces, but New York has to be a leading candidate.

  • 6 fish48 // Mar 10, 2009 at 4:24 pm

    Hi bob5e, now i know what the E stands for, Expiration, as in options. You must be getting excited for next week already. I would be interested in seeing your spreadsheet and may be able to offer a few “old indian” tricks of my own… imfish55@yahoo.com …Thanks.
    .fish

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