The market seems unable to establish a trend in any direction. There is clearly still some buying enthusiasm that manages to take hold of the futures markets at least one or two times per day. This market is ’sideways’ by every definition of the word, and I don’t want to have a position or an opinion in times like these. Best to just watch. The range is very established here between 875 and 920. Let’s see when and where it can move outside of those boundaries.
click chart to enlarge
7 responses so far ↓
1 rich // May 28, 2009 at 6:02 pm
I’ll second that.
2 Rrman // May 28, 2009 at 8:32 pm
Chris, the solar/lunar indicates an up move around the first of the month?
3 Berkeley Square // May 29, 2009 at 8:50 am
i knew a trader who kept buying the highs of a trading range & selling the lows.
Eventually, he ended up signing his checks “U.R. Stuck”
4 rich // May 29, 2009 at 9:04 am
I think we might be looking at a blowoff top in the next week. Solunar chart not incompatible with that.
5 alexk // May 29, 2009 at 9:12 am
@rich, it does feel as though something explosive is brewing, and the majority seems to expect a bearish resolution – so a strong move to the upside may be the actual outcome. I’d be interested to know how you arrive at your conclusion though…
6 Josh // May 29, 2009 at 10:07 am
@ Rich
YES.
7 rich // May 29, 2009 at 1:54 pm
The bears are on a tight leash. Equities have stopped rising, but every time the bears sally down they are reeled right back in.
Most of my indicators tell me that the rally is finished, all bar the shouting, weekly spx stochs, $NYSI, $NYA50R, $SPXA50R. These are long term signals that take a while to turn around once they start trending up or down.
If the bulls aren’t done yet, then we should see a blowoff top that hits the resistance just under 950 on the SPX (Jan high, 200 day EMA) if it makes it through the resistance at 930 it has already bounced off twice.
If it does make it through 930, then the Dow will make a new high over the May 8 high. That new high is most unlikely to be confirmed by the Dow Transports so we will then have a clear Dow Theory Sell Signal, the first since the SPX hit about 780 in Feb on the way down. That will be the end of the rally IMO.
Or we might just go down from here but I don’t think we’re quite there yet.
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