My weekly chart analysis.
Posted by MC on Apr 24, 2009
I think some bears could get caught with their pants down by looking at just the daily chart. That weekly 21ma wants to fight and hold for some reason. There is many levels of resistance ahead. It could be a long road for bias based bears with lots of margin calls pushing the issue. HRMMM
Posted by MC on Apr 20, 2009
First thing I noted today was how they gapped below the major 60m channel. That’s usually a bearish move. They knew support would come in at that lower trendline so they shot below it, triggered stops and then sold further in on the slight push to test the trendline. Fib wise it’s still in the realm of a retracement but you generally want low volume on a retracement/correction not big volume. Good amounts of volume at a lower price shows willingness to transact cheaper. Perceived value has seemed to shift lower based on auction theory. This view feels bearish to me.
Now this is VERY interesting. NYSE Down volume climbed all day long with the up volume being flat. As we’d expect this led to a solid downtrend. Till near the end that is…then the DVOL cranked into overdrive, yet price action began to chop and refused to make a lower low. This view feels bullish because we have to note that while UVOL did nothing the market chopped and did go up several times. This also re-affirms something I’ve talked about before…UVOL doesn’t always = buys and DVOL doesn’t always = sells. DVOL can actually show hidden buying on downticks for example. If that DVOL spike at the end was pure sellers why was a new low not put in? I am concerned though because usually UVOL would confirm and begin to breakup which we didn’t see.
Am I wishy washy…YUP. I have no great read at this point. When I have a great read you guys know it…I get pretty aggressive when challenged on a real solid read. Here I give you what I see but I have no solid thought really. We need confirmation. VIX had a big move up and the TRIN is above 2.0. I would venture a guess that we get a bit of a pop early as a breather but based on all my charts/internals I hunch we get a bearish move off that 60m trend breaking down.
Just my 2 cents. GL
Important support for the DOW here.
Posted by MC on Apr 14, 2009
At important support here.
Why is the trend your friend???
Posted by MC on Apr 10, 2009
The slope of a trend/channel is crucial to spot and understand.
Trading with the trend lets the slope work FOR you and puts time on your side, along with odds.
Think about it…you get short in a bear trend. The slope is WITH you and the trendline/channel gives you EXPANDING profit targets. You get long in a bear trend and that slope is now pinching you off as each bar forms. You’re painting yourself into a corner essentially. If you insist on trading counter trend…even if you get long at the lower trendline, a steep slope and a little consolidation can kill any chance at profitability. This is why the trend is really, truly your friend.
Also, ALWAYS remember there are 2 major trends…micro and macro.
Currently in the bigger picture the micro trend is up, macro trend is down. This is the ideal time to look to find trades matching the macro trend.
Don’t forget there are MANY timeframes at work in the market…it’s not just so cut and dry. This is why timing can be so difficult, and chart timeframe selection is crucial.
Bearish already? Careful!
Posted by MC on Apr 9, 2009
As for you guys that are premature shorts. You could use daily which is potentially near the most likely reversal point. OR you could use the weekly and see just how much further this has the potential to travel against you. This was why I’ve said recently it’s hurry up and wait time. We haven’t even tested the daily trendline yet. There’s nothing wrong with taking a taste at the horizontal structure resistance I suppose but the trend hasn’t given an inch. It’s bullish till proven otherwise.
Be careful here. Timing is everything.
Can the NAZ lead things higher?
Posted by MC on Apr 3, 2009
Nasdaq had a much cleaner shot at popping into that channel and soaring to the top of the channel. Perhaps this would lead the DOW to a major squeeze soaring past that supply zone I showed yesterday. HRMMM. Just a thought.
BORSON? RIMM may have been a catalyst for hidden selling in the tech sector.
Just like the DOW chart…this is a risky short at this point tho. Sure this resistance hasn’t passed yet and there is the channel looming, but if the channel can break and hold the odds of a soaring test of the top trendline is very high. Don’t forget there is support below as well since that zone of supply is now a demand zone they may defend. BUT it’s counter trend in the macro trend.
MARKET STRUCTURE fellas! Trust it. It will improve your odds. 
Market structure at it’s finest. 8)
Posted by MC on Apr 2, 2009
Pretty bullish on the 60 minute chart. Gapped right back into that rising channel and above the prior high. Passed a lil pullback test even.
Bigger picture though…we will be encountering HUGE supply in this zone. It’s a damn big zone so be sure you know how to play the game if your looking to go in longer term. From R1 to R2 resistance you’re looking at almost 1500 points. R1 isn’t something you want to short at and just average down on all the way up. If R1 breaks RUN and look to short at R2. This could be one of the times where averaging down leads to margin calls and wipes traders out. This also would potentially propel the market upwards towards R2.
We do have a minor trendline and the shorter MA’s acting as support below. I would not anticipate R2 testing without some kind of consolidation building or an insane squeeze. This rally has been a bit too vertical for my liking. It’s pretty emotional based on the slope. Think about it, if there were a deep correction would it hold? NOT LIKELY. It’s vertical with uber tight pullbacks for a reason, and it’s not because the market is all the sudden bullish with all that resistance looming overhead. HRMMM.
