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S&P; 500 Mar SPH1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TODAY'S S&P; 500 COMMENTARY We have two Pattern Signals fired for today's trading in the S&P;, the first of which is the Low Range Close. This signal indicates that the close of yesterday's trading was within the bottom 20% of the day's range and suggests an 80-85% chance that today's low will be less than yesterday's. The second Pattern Signal fired for today's trading is the Momentum Pinball Buy. The Momentum Pinball Buy and Sell Signals also originate from the book "Street Smarts". 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 Buy signal requires a breach of the first hour high 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 S&P; Half Day chart, all three of our Cycle Indicators moved lower from overbought levels. Normally, we would consider such activity as having likely marked a short term cyclical high, but our indicators have become a bit choppy and erratic lately, suggesting that we should view such behavior with a dose of skepticism. It would be best to wait until our indicators 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 Durable Goods Orders at 7:30CT and the Help Wanted Index at 9:00CT. Historical Volatility remains under trigger levels (chart at right). 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. The Low Range Close signal is telling us to look on the short side in today's early trading. The ideal setup would entail corrective action towards one of the resistance levels directly above yesterday's closing price, the most significant being that of the 1368.20 Daily Pivot level. If price were able to reach this zone as higher timeframe 20EMAs were coming down to meet it from above, we'd have an extra reason to get short. A price reversal pattern and/or Oscillator Divergence can trigger us into the position with the Low Range Close signal telling us to expect yesterday's low to be exceeded. Also, keep in mind that the Momentum Pinball Buy signal is indicating short term downtrend exhaustion with a likely move in the opposite direction. If today's first hour high is breached we'd want to more seriously consider a bullish 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 support.
Nasdaq 100 Mar NDH1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TODAY'S NASDAQ 100 COMMENTARY We have two Pattern Signals fired for today's trading in the Nasdaq 100, the first of which is the 90-10 Low Continuation. This 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 Low Continuation signal is fired when the day's close is within the bottom 10% of the day's range. This signal is telling us to expect morning continuation of the downmove. The second Pattern Signal fired for today's trading is the Momentum Pinball Buy. 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 Buy signal requires a breach of the first hour high 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 Nasdaq 100 Half Day chart, all three of our Cycle Indicators moved lower with yesterday's activity, further confirming the likelihood that last Friday's action marked a short term cyclical top. Our indicators are telling us to expect sideways to lower activity in today's trading. Economic reports on today's agenda Durable Goods Orders at 7:30CT and the Help Wanted Index at 9:00CT. Although having upticked a bit with yesterday's trading, Historical Volatility remains very near trigger levels (chart at right). 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. ADX levels on 15 and 120 minute charts are above 30, indicating that the trend to lower prices is still intact in these timeframes. If we were triggered into a short position by a price reversal pattern and/or Oscillator Divergence near the 20EMA in either 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 downside in the making. High ADX readings and the 90-10 Low Continuation signal are enough to have us looking for shorts in today's early trading. The ideal setup would entail corrective action towards one of the resistance levels directly above yesterday's closing price, the most significant being that of the 2649.50 Daily Pivot level. If price were able to reach this zone as higher timeframe 20EMAs were coming down to meet it from above, we'd have an extra reason to get short. A price reversal pattern and/or Oscillator Divergence can trigger us into the position with the 90-10 Low Continuation signal telling us to expect yesterday's low to be exceeded. Also, keep in mind that the Momentum Pinball Buy signal is indicating short term downtrend exhaustion with a likely move in the opposite direction. If today's first hour high is breached we'd want to more seriously consider a bullish 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 support.
US T-Bond Mar USH1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TODAY'S T-BOND COMMENTARY The only Pattern Signal fired for today's trading in the T-Bonds 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 with yesterday's activity. Both the 10 period Double Stoch and the 7 period %K moved upward from oversold levels. Although its a bit too early to tell with any degree of certainty, if short term cyclical patterns have returned to more normal behavior we should be expecting sideways to higher activity. Economic reports on today's agenda Durable Goods Orders at 7:30CT and the Help Wanted Index at 9:00CT. ADX levels on 5, 15, and 30 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. 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 102-23 Daily Pivot. Significant activity above this level will imply further upside. Activity below will hint at further downside. 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, 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.
Low Range Close: 80% chance that today's
low will be less than yesterday's. Look for shorts.
Momentum Pinball Buy: If price action is strong enough to break the
first hour high, then a bullish bias should be assumed. Look to either buy the
breakout (aggressive) or buy 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.
R3·1391 R2·1382 R1·1373 DP·1368 S1·1359 S2·1354 S3·1345
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.
90-10 Low Continuation: Morning follow through
on yesterday's weak close is likely. Look for shorts.
Momentum Pinball Buy: If price action is strong enough to break the
first hour high, then a bullish bias should be assumed. Look to either buy the
breakout (aggressive) or buy 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.
R3·2855 R2·2775 R1·2694 DP·2650 S1·2569 S2·2525 S3·2444
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.
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.
R3·104´19 R2·104´01 R1·103´16 DP·102´23 S1·102´06 S2·101´13 S3·100´28
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.