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S&P; 500 Mar SPH1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TODAY'S S&P; 500 COMMENTARY We have only one Pattern Signal fired for today's trading in the S&P.; The 90-10 High Continuation signal originates from the 80-20s set-ups as described in "Street Smarts". But, rather than using the 80-20 guidelines, the parameters have been narrowed to 90-10, thus reducing the pattern's frequency of occurrence, but increasing its probability as a forecasting tool. The 90-10 High Continuation signal is fired when the day's close is within the top 10% of the day's range. This signal is telling us to expect morning continuation of the upmove. On the S&P; Half Day Chart, all three of our Cycle Indicators upticked a bit on the last bar of yesterday's activity. At this point, however, much more will be determined by today's economic releases than can be reliably discerned from our cycle indicators. The ADX level on the 5 minute chart is above 30, indicating that the trend to higher prices is still intact in this timeframe. If we were triggered into a long position by a price reversal pattern and/or Oscillator Divergence near the 5 minute 20EMA, 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. Recent activity has caused Historical Volatility levels (chart at right) to remain under trigger levels. Historical Volatility is a measure of the degree in which price has fluctuated over a particular period of time. Generally, when a market has gone through a period of contraction, there will be a tendency for volatility levels to increase. And sometimes that increase can be very sudden and dramatic. These kind of low Historical Volatility readings have us on lookout for the development of wide-range days which trend in a single direction - the kind of days that are well-suited for capturing large profits. Some important economic numbers will have already been released by the time today's regular trading session begins. On the roster for tomorrow are Unemployment Rate, Nonfarm Payrolls, Hourly Earnings, and Average Workweek, all released at 7:30CT. Factory Orders and the Michigan Sentiment Survey are released at 9:00CT. Principal market direction will likely be determined before the session even opens. We should enter the day prepared for the possibility of range expansion and a pickup in volatility. One of the more prudent approaches for entering today's trading is to simply stay out of the way until the dust settles. If opening volatility is extreme, we should wait 15 to 30 minutes before entering a position. By this time, you can usually get your bearings and market entry can then be made with a greater degree of confidence and with less chance of getting whipsawed. One interesting pattern to keep an eye out for early in the day is the Spike & Ledge from the book "Street Smarts". If we get a large opening gap or early spike move as a result of today's numbers, this pattern will trigger us into a trade in the opposite direction of the original thrust. It is identified by, first, an obvious spike, and second, a "ledge" created by the first retracement move away from the spike extreme. A violation of the line created by that ledge is our trigger to enter. The big disadvantage of this trade is the fact that the stop typically needs to be placed just past the swing pivot extreme. This is usually too far for my tastes. There is another trick that comes in handy after a large impulse move. I'm always a little gun-shy about jumping on board in the middle of these types of, typically, fast market conditions. You not only risk large slippage, but such volatile spikes often require very wide stop placement. And I'm ALWAYS on the lookout for ways that I can reduce my risk. However, if you pay close attention to the 5 min. 20 EMA on days like today, sometimes you can come out all right. If, for example, we have a large impulse move upward, rather than using some sort of breakout entry where you have to place your stop past the extreme of the swing pivot, you can, instead, just sit back and wait to see if price eventually returns to the 5 min. 20EMA. If it does so, and a price reversal pattern develops near the EMA and a previously identified support zone, you can go long with your stop just below that zone. You won't catch the hero moves this way, but you can still garner some good profits, AND you reduce your risk considerably. Another important item of note on highly volatile days - the Pivot System S&R; levels posted at the top of this report can quickly become useless if the volatility is extreme. The calculations for these values are based on the prior day's range and close. If a report is released that causes significant market movement, the value of the activity on the prior day, and any calculations resulting from that activity, can be rendered meaningless. Even with the potential increase in volatility caused by the reports, the heart of the matter still boils down to identifying support and resistance levels and watching how price reacts near those levels. In addition, keep a sharp eye out for Spike & Ledge and Holy Grail patterns.
Nasdaq 100 Mar NDH1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TODAY'S NASDAQ 100 COMMENTARY The only Pattern Signal fired for today's trading in the Nasdaq 100 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 Nasdaq 100 Half Day Chart, all three of our Cycle Indicators moved lower with yesterday's activity. Although its still too early to tell with any degree of certainty, if short term cyclical behavior has returned to the norm, our Cycle Indicators are pointing towards sideways to lower activity in today's trading. Recent activity has caused Historical Volatility levels (chart at right) to remain under trigger levels. Historical Volatility is a measure of the degree in which price has fluctuated over a particular period of time. Generally, when a market has gone through a period of contraction, there will be a tendency for volatility levels to increase. And sometimes that increase can be very sudden and dramatic. These kind of low Historical Volatility readings have us on lookout for the development of wide-range days which trend in a single direction - the kind of days that are well-suited for capturing large profits. Some important economic numbers will have already been released by the time today's regular trading session begins. On the roster for tomorrow are Unemployment Rate, Nonfarm Payrolls, Hourly Earnings, and Average Workweek, all released at 7:30CT. Factory Orders and the Michigan Sentiment Survey are released at 9:00CT. Principal market direction will likely be determined before the session even opens. We should enter the day prepared for the possibility of range expansion and a pickup in volatility. One of the more prudent approaches for entering today's trading is to simply stay out of the way until the dust settles. If opening volatility is extreme, we should wait 15 to 30 minutes before entering a position. By this time, you can usually get your bearings and market entry can then be made with a greater degree of confidence and with less chance of getting whipsawed. One interesting pattern to keep an eye out for early in the day is the Spike & Ledge from the book "Street Smarts". If we get a large opening gap or early spike move as a result of today's numbers, this pattern will trigger us into a trade in the opposite direction of the original thrust. It is identified by, first, an obvious spike, and second, a "ledge" created by the first retracement move away from the spike extreme. A violation of the line created by that ledge is our trigger to enter. The big disadvantage of this trade is the fact that the stop typically needs to be placed just past the swing pivot extreme. This is usually too far for my tastes. There is another trick that comes in handy after a large impulse move. I'm always a little gun-shy about jumping on board in the middle of these types of, typically, fast market conditions. You not only risk large slippage, but such volatile spikes often require very wide stop placement. And I'm ALWAYS on the lookout for ways that I can reduce my risk. However, if you pay close attention to the 5 min. 20 EMA on days like today, sometimes you can come out all right. If, for example, we have a large impulse move upward, rather than using some sort of breakout entry where you have to place your stop past the extreme of the swing pivot, you can, instead, just sit back and wait to see if price eventually returns to the 5 min. 20EMA. If it does so, and a price reversal pattern develops near the EMA and a previously identified support zone, you can go long with your stop just below that zone. You won't catch the hero moves this way, but you can still garner some good profits, AND you reduce your risk considerably. Another important item of note on highly volatile days - the Pivot System S&R; levels posted at the top of this report can quickly become useless if the volatility is extreme. The calculations for these values are based on the prior day's range and close. If a report is released that causes significant market movement, the value of the activity on the prior day, and any calculations resulting from that activity, can be rendered meaningless. Even with the potential increase in volatility caused by the reports, the heart of the matter still boils down to identifying support and resistance levels and watching how price reacts near those levels. In addition, keep a sharp eye out for Spike & Ledge and Holy Grail patterns.
US T-Bond Mar USH1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TODAY'S T-BOND COMMENTARY > There are no Pattern Signals fired for today's trading in the T-Bonds. On the Half Day Chart, all three of our Cycle Indicators ticked a bit lower from overbought levels with yesterday's activity. Normally, we would consider such activity as having likely marked a short term cyclical high, but our indicators have been so choppy and erratic lately that we should view such action 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. ADX levels on 15, 30, 60, and 120 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, which would be yesterday's 105-14 high. If the move to that level can occur on Momentum Confirmation, there should be even more upside in the making. We have some important economic numbers coming out this morning. At 7:30CT we have the Unemployment Rate, Nonfarm Payrolls, Hourly Earnings, and Average Workweek being released. Factory Orders and the Michigan Sentiment Survey are released at 9:00CT. Unemployment Friday is always a tricky one. It can typically lead to extreme levels of intraday volatility. One of the most prudent approaches for entering today's trading is to simply stay out of the way until the dust settles. Wait at least 5 to 10 minutes after the unemployment report release before entering a position. By this time, you can usually get your bearings and market entry can then be made with a greater degree of confidence. You also reduce your chance of being whipsawed. One interesting pattern to look for immediately after the reports come out is the Spike & Ledge from the book "Street Smarts". If we get a spike move as a result of today's numbers, this pattern will trigger us into a trade in the opposite direction of the original thrust (example in the chart to the right). It is identified by, first, an obvious spike, and second, a "ledge" created by the first retracement move away from the spike extreme. A violation of the line created by that ledge is our trigger to enter. The big disadvantage of this trade is the fact that the stop typically needs to be placed just past the swing pivot extreme. This is usually too far for my tastes. There is another trick that comes in handy after a large impulse move. I'm always a little gun-shy about jumping on board in the middle of these types of, typically, fast market conditions. You not only risk large slippage, but such volatile spikes often require very wide stop placement. And I'm ALWAYS on the lookout for ways that I can reduce my risk. However, if you pay close attention to the 5 min. 20 EMA on days like today, sometimes you can come out all right. If, for example, we have a large impulse move upward, rather than using some sort of breakout entry where you have to place your stop past the extreme of the swing pivot, you can, instead, just sit back and wait to see if price eventually returns to the 5 min. 20EMA. If it does so, and a price reversal pattern develops near the EMA and a previously identified support zone, you can go long with your stop just below that zone. You won't catch the hero moves this way, but you can still garner some good profits, AND you reduce your risk considerably. Another important item of note on highly volatile days - the Pivot System S&R; levels posted at the top of this report can quickly become useless if the volatility is extreme. The calculations for these values are based on the prior day's range and close. If a report is released that causes significant market movement, the value of the activity on the prior day, and any calculations resulting from that activity, can be rendered meaningless. Even with the potential increase in volatility caused by the reports, the heart of the matter still boils down to identifying support and resistance levels and watching how price reacts near those levels. In addition, keep a sharp eye out for Spike & Ledge and Holy Grail patterns.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ YESTERDAY'S T-BOND TRADING
Market Commentary Page
For the S&P; 500, Nasdaq 100, 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.
90-10 High Continuation: Morning follow through
on yesterday's strong close is likely. Look for long entries
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.
R3·1401 R2·1395 R1·1389 DP·1378 S1·1372 S2·1361 S3·1355
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.
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.
R3·2726 R2·2693 R1·2660 DP·2614 S1·2581 S2·2535 S3·2502
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.
There are no Pattern Signals fired for today's trading.
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´10 R2·105´29 R1·105´17 DP·105´01 S1·104´21 S2·104´05 S3·103´25
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.