E mini

Emini Directions 11-30-07 (Friday): A Technical Analytical View of Eminis for online and day traders.

NQZ (December Emini NASDAQ 100): Spinning top and 50% percent retracement could mark the end of the current climb in the NASDAQ.

Friday’s pattern of supply and demand delivered a long legged spinning top candle for the December Emini NASDAQ.  Highs of the day carried above 2124.00, the 50% retracement level. This 50% level is the difference of the high posted on 11/1/07 and the low established on 11/13/07.  After strong upside action for the last three days, the spinning top could curtail further upside movement.  Spinning tops are candles that have lsmall bodies, but can have long upper and lower wicks.  The longer the wicks, the more indecision is in the market.  This candle should slow the advance down for a few days.

The CMO3, our momentum oscillator has smacked its trigger level, on Wednesday and last Friday.  As the CMO curls over from the top of its range at +100. This is a extremely overbought condition that started a correction today.  This usually means that upside action will be difficult to come by during early next week.

The direction of the T8, our exponential moving average and trend definer, continues to point up.  After three weeks of negative direction, the T8 turned up this week and now looks to continue its posture of strength.  Monitor price and the T8 closely for opportunities to buy near the T8 exponential moving average.  Any retracements to the T8 should be considered as buying opportunities.

Friday’s black candle, a spinning top, can stop movement quite abruptly.    Candles don’t give signals everyday and when they do, the signals don’t last forever.  Friday’s “spinning top” is a sign that shouts ”indecision”.  Unfortunately, this is seldom helpful.  Just be careful, for all the above reasons.   Spinning tops are sure signs that the market is not confident further advances (and not really sure about the downside)…at least for the near term.

E-minis 11-28-07 (Wednesday):  A Daily Technical Analytical View of Eminis for online and day traders.

Emini S&P 500 (ESZ):  Volatility rules:  Eminis continue to rock and roll.

The ESZ closed up +19.75 and the S&P 500 closed up +21.01 points on Tuesday.  Price smacked the T8 and moved down after the contact on Monday and then couldn’t gather enough strength to touch it on Tuesday.      We always see retracements to the T8 as opportunities to buy or sell.  Wednesday should offer an opportunity to sell against the T8.  The StoRSI, our momentum oscillator, has swung positive again with the last six sessions changing directions of the indicator.  This is an uncommon supply and demand occurance.

The direction of the T8, our exponential moving average and trend definer, continues to point down and continues to act as resistance to price (most recently on Monday).  The trend has continued down for the past 29 trading days.   Rallies back to the T8, as we saw on Monday and Tuesday, are opportunities to sell the market once again.  The steeper the decline of the T8, the further this market can fall.  We continue to doubt if the market can rally for any length of time above the T8. 

Tuesday’s white candle is a “harami”.  The body of Tuesday’s candle is inside the body of Monday’s candle.  This supply and demand pattern can suggest a change in direction.  We have a classic battle of “trend vs. candle formation”…usually, trend wins.    

***Volatility Alert:
During the third week in July, volatility returned to the major stock indices.  For approximately four years, the markets have had low to very low volatility.  This significant change has ushered in swings of 100, 200 & 300+ points in the DJIA (DOW), sometimes on a day-to-day basis.  Stock indices tend to be either volatile, or not, for three to five years at a time.  Expect continued volatility.  This volatility cycle is in its early stages and we continue to believe it is here to stay. (***9/15/07).

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