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S&P; 500 Mar SPH1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TODAY'S S&P; 500 COMMENTARY The only Pattern Signal fired for today's trading in the S&P; is the 2 Day Rate Of Change Buy. This signal is the Raschke and Connors way of quantifying the swing trading methods as taught by the Taylor Trading Technique. This technique teaches that there is a natural pattern to the sequence of buy and sell days. The 2 Day ROC Buy signal is telling us to expect today to be the "buy day" part of that pattern. On the S&P; Half Day chart, both the 10 period Double Stoch and the 7 period %K have turned lower from overbought levels on the last bar of yesterday's trading. This kind of action is normally considered to have marked a short term cyclical top. Cycle Indicators are telling us to expect lower to sideways activity. Economic reports on today's agenda include Building Permits, Housing Starts, and State Unemployment Initial Claims, all released at 7:30CT. The Philadelphia Fed Index is released at 9:00CT. ADX levels on 60, and 120 minute charts are below a value of 18. When this occurs, we know that it is a good time to keep an eye out for any developing triangles, wedges, flags, or channels in the respective time frames. We can use breakouts from these patterns as either a trigger into a trade or to help determine directional bias. Even though the 2 Day ROC Buy signal is suggesting upside activity, it would be best to enter today's trading without a directional preference, but with strict attention to market action relative to important support and resistance levels. In today's early going, pay particular attention to price behavior in relation to the 1344.90 Daily Pivot. Significant activity above this level will imply further upside. Activity below will hint at further downside.
US T-Bond Mar USH1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TODAY'S T-BOND COMMENTARY We have two Pattern Signals fired for today's trading in the T-Bonds, the first of which is the Wide Range Upside Reversal. This signal is activated when three conditions have been satisfied: 1) the low of the day is the lowest low of the last five, 2) the trading range of the day is the widest range of the last five, and 3) the close is within the top 25% of the day's range. This signal typically marks significant market turning points. The second Pattern Signal fired for today's trading is the Momentum Pinball Sell. The Momentum Pinball Buy and Sell Signals originate from the book "Street Smarts" by Larry Connors and Linda Raschke. They represent an attempt to identify periods of very short term buying and selling exhaustion so as to capture a likely move in the opposite direction. Before any action is taken, however, the Momentum Pinball Sell signal requires a breach of the first hour low for confirmation. Because Momentum Pinball Buy/Sell signals are intended to flag the end of a short term trend, it is not unusual to see, on the same day, other Pattern Signal firings which indicate likely movement in the opposite direction. When this occurs we know that a break of the first hour high/low represents a market bias in the opposite direction as originally indicated by other Pattern Signal firings. On the T-Bond Half Day chart, all three of our Cycle Indicators moved higher from oversold levels. Normally, we would consider such action as having marked a short term cyclical low. But our indicators have been so choppy and erratic lately that we should view such behavior with a healthy dose of skepticism. It would be best to wait until they've have had a chance to normalize and return to more normal short term cyclical behavior before using them to help determine any sort of directional bias. Economic reports on today's agenda include Building Permits, Housing Starts, and State Unemployment Initial Claims, all released at 7:30CT. The Philadelphia Fed Index is released at 9:00CT. ADX levels on 15, 30, and 60 minute charts are all above 30, indicating that the trend to higher prices is still intact in these timeframes. If we were triggered into a long position by a price reversal pattern and/or Oscillator Divergence near the 20EMA in any of these timeframes, we would have the makings of a Holy Grail setup. A trade based in part on a Holy Grail pattern can take as its minimum profit target a return to the most recent swing pivot extreme. If the move to that level can occur on Momentum Confirmation, there should be even more upside in the making. Both the high ADX readings and the Wide Range Upside Reversal signal are telling us to look for longs in today's early trading. The ideal setup would entail corrective action towards one of the support levels directly under yesterday's closing price, the most significant being that of the 103-23 Daily Pivot. If price were able to reach this zone as higher timeframe 20EMAs came up to meet it from below, we'd have an extra reason to go long. A price reversal pattern and/or Oscillator Divergence can trigger us into the position with the most likely target being yesterday's 104-12 high. Also keep in mind that the Momentum Pinball Sell signal is indicating short term uptrend exhaustion with a likely move in the opposite direction. If today's first hour low is breached we'd want to more seriously consider a bearish bias. The aggressive trader can enter on the break. The more conservative might want to wait until a return to the breakout level, which often happens before a sustained move begins. As always, our most confident entries are accompanied by Reversal Patterns and/or Oscillator Divergence along known levels of resistance.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ YESTERDAY'S T-BOND TRADING
Market Commentary Page
For the S&P; 500 and T-Bond Futures Markets
Pattern Signals - an automated pattern identification process which
identifies today's most likely market scenario based on recent price behavior.
2 Day ROC Buy
Pivot System Support & Resistance Levels - used by floor professionals to determine
value based on prior day price activity. Shifts in market psychology often occur near these levels.
R3·1381 R2·1368 R1·1355 DP·1345 S1·1332 S2·1322 S3·1309
Range Projections - This market will have a tendency to trade within the Normal
High/Low Range today as noted below. If those levels are exceeded, use the Extended Range.
Statement of disclaimer: This information was compiled from sources believed to be reliable, but its accuracy cannot be guaranteed. There is substantial risk of loss in stock and futures trading. There is no warranty, express or implied, in regards to the fitness of this information for any particular purpose. Past performance is not a guarantee of future results.
Pattern Signals - an automated pattern identification process which
identifies today's most likely market scenario based on recent price behavior.
Wide Range Reversal: The current bar has the
lowest low and widest range of the last 5 bars and the close is
within the top 25% of the range. Look for long entries.
Momentum Pinball Sell: If price action is weak enough to break the
first hour low, then a bearish bias should be assumed. Look to either sell the
breakout (aggressive) or sell the retracement to the breakout (conservative).
Pivot System Support & Resistance Levels - used by floor professionals to determine
value based on prior day price activity. Shifts in market psychology often occur near these levels.
R3·106´00 R2·105´11 R1·104´23 DP·103´23 S1·103´03 S2·102´03 S3·101´15
Range Projections - This market will have a tendency to trade within the Normal
High/Low Range today as noted below. If those levels are exceeded, use the Extended Range.