Market Direction (S&P)

I would like to start a discussion on market direction if anyone is interested in contributing and keeping it going?

This may help people with market timing e.g. long or short?

I will start:

The S&P 500 has rallied for 3 days and closed with an up bar, although a smaller one with a topping tail. This one is approaching bigger resistance and although we can expect another day or two of a rally chances are supply should reappear below the 1377 area. Watch for a lower high to form there.

We are therefore looking to be short with the ma below ema and w%r3 at -20.

VIX is not extended so we can disregard this for now.

Tags: s&p, timing, vix

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Replies to This Discussion

Permalink Reply by lionel319 on June 17, 2008 at 7:18am: Very nice to have this indeed. Let me be the 1st to support :)

I agree with you Chilling, on the intermediate trend that the SPY is going down.
but seems to me that the market is still going to go up these few days. Just my 2cents.

From the chart, it seems to be like there's still room for upside movement, as the Stoch is still at the very oversold region.

Actually, it seems like it is very hard to call which direction the market is going. Maybe the best thing is to step aside for a while, and wait for the market to show more info on its direction?

my 2cents.; ▶ Reply to This

Permalink Reply by Chilling on June 17, 2008 at 7:53am: Thanks for contributing.

You may want to stick with market timing of using the W%R set to 3, so we can be consistent in our analysis.

I agree we can not call predict the future or control the markets.

I did not notice the neckline of the Head and shoulders pattern so this could be resistance? We will see.; ▶ Reply to This

Permalink Reply by Chilling on June 18, 2008 at 1:14pm: The S&P continues its down trend today 18/06/08.

1st Support at 1331 and then 1322.

1322 looks more likely on this swing where we could see a breather.

Its too late for short positions so we will have to wait for the next rally and the W%R3 to set up to look for shorts or see how the VIX behaves over the next few days for longs?; ▶ Reply to This

Permalink Reply by Craig on June 18, 2008 at 1:29pm: Yep, I'll be waiting for the next rally - but keeping an eye on the VIX for any extreme moves. Right now is a good time to just manage open positions and look for some good chart patterns that might be setting up in the future.; ▶ Reply to This

Permalink Reply by Chilling on June 19, 2008 at 4:21pm: The S&P stalled today at first support 1322.

A daily bar which is a spinning top candlestick indicating a breather or some indecision? The body is showing a slight victory by the bulls over the bears but based on this daily candle no side can really claim victory.

When we look at the hourly to see how this was formed and we have an initial bearish move which is rejected and then the bulls overcome the bears as they push the price above the open, the bears then re-emerge to exhaust the bulls to push the price back down. Although it is not clear it shows the bears had the final say, which goes some way to showing that bulls are not that strong to stop the current down move and further downside may be experiencecd if the 1332 support is broken.; ▶ Reply to This

Permalink Reply by Craig on June 19, 2008 at 4:28pm: Looks to me like we could have a reversal soon judging by the potential double bottom:

But we would have to get over that "1366" area to confirm.; ▶ Reply to This

Permalink Reply by Chilling on June 20, 2008 at 4:11am: Craig

Thanks for pointing this out. I always seem to miss the patterns - need to keep focused.

After looking again is there also a descending triangle?

We could have a bullish double bottom

Or a bearish descending triangle?; ▶ Reply to This

Permalink Reply by lionel319 on June 20, 2008 at 10:38am: Ouch ......
seems like the market gapped down.; ▶ Reply to This

Permalink Reply by Chilling on June 20, 2008 at 11:24am: The market has just formed a hammer on the hourly at 1322 support - the Vix is not extended and W%R3 is not overbought so could we now see a pullback to the breakout of the triangle and further downside?

Any thoughts?; ▶ Reply to This

Permalink Reply by lionel319 on June 20, 2008 at 11:58am: The market seems to be very very low volume.

Guess everyone is avoiding the market at this triple witching day.

I'm not sure which erratic swing direction will the market take towards the last minute of the day, but if i have to take a wild guess, I'll take that the market won't be able to close the gap today.; ▶ Reply to This

Permalink Reply by Chilling on June 20, 2008 at 3:01pm: Wow - a break of the triangle, pullback and then a further downmove.

We are right on the 200ma on the weekly - maybe this will provide some support.

Be nice to see the VIX get extended as we could be in for a nice rally to the upside and some long positions.

As it stands if the VIX does not set up then we are still waiting for a rally to start looking for shorts.; ▶ Reply to This

Permalink Reply by Chilling on June 20, 2008 at 3:18pm: I am simply giving a commentary on the indice if this is OK??

And according to the TAZ market timing rules we are not long until the ma is above the ema and the w%r3 moves into overbought (-80).

At the moment we are just managing existing trades until the VIX gets extended for longs or the W%R3 pulls back to -20 with the ma still below the ema.

A simple but effective market timing tool for stocks.

I am happy you made great money and this is your way of trading then good luck to you, I wish you all the best but I use the TAZ rules to trade.

The market generally pulls stocks up and down with it so what we are trying to do is get the flow of the market to help push our stocks up/down with it when it does reverse.

I am happy to leave the picking of highs and lows to the experts.; ▶ Reply to This