Teach Talk Trade Day Trading & Technical Analysis

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.