Technical Analysis of the S&P 500 Stock Market Index

6E Failing Backtest

spycharter — Wed, 22 Feb 2012 14:37:05 +0000

The Euro has failed thus far to break back above the 1.267 uptrend line. There may a trade opportunity here soon

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The Euro has failed thus far to break back above the 1.267 uptrend line and is has failed to make a higher high. There may be a trade to the short side here but it needs to setup a little bit longer.

The other thing to note is that the Euro has traded in a rough 1.3-1.32 range for so long that I have to adjust my estimate of it hitting 1.375 down to about 1.355-1.36

ES 1354 is Support

spycharter — Wed, 22 Feb 2012 14:31:37 +0000

ES has support at 1354, but could drop a bit further to the 1346-1348 range. As long as ES stays above 1334 I still think ES is headed to 1373.

ES has support at 1354, but could drop a bit further to the 1346-1348 range. As long as ES stays above 1334 I still think ES is headed to 1373. So I’ll be looking for reversals around those price areas. If ES does drop to 1334 again then I would consider shorting ES on a bounce.

GC Potential to hit 1776-1792 Range

spycharter — Tue, 21 Feb 2012 14:36:16 +0000

I thought Gold looked like a good long last week and now it's started to head up. I have drawn a blue box which represents a possible trading range for Gold in the next few weeks.

Gold is moving back up towards the 1767.1 high. I think it has potential to hit the 1776-1792 range. I still am bearish on this market but now is not the time to short. I have to wait for a better sell setup than this. If Gold takes out the old 1767.1 high then I will probably be sitting out for a long time before I try shorting this market again as I believe a break above the 1767.1 high indicates Gold is headed to 1800 and so I would have to wait for another uptrend to end before getting short again.

For bears the best thing to hope for is that Gold puts in an inverted hammer candlestick today or tomorrow and then reverses the following day. Anything less than that will indicate continuation to the upside.

ZN Closing Short 129.5 Put Position

spycharter — Tue, 21 Feb 2012 14:18:33 +0000

I plan to cover my short treasury puts because it's very possible that ZN heads below 130 this week.

With ES in striking distance of the 2011 1373 high I don’t want to be short treasury puts anymore. ZN is no longer holding the 117’295 uptrend line and it now looks very possible for ZN to drop below 129.5. I sold the puts for 0’100 and I’ll probably buy them back in the 0’20-0’30 range so I’m still profiting almost the entire premium which is good enough for me. Last week’s low is at 130’180, if ES rallies hard today then I expect ZN to close below this low. This would confirm my suspicion that ZN is headed back down below 130.

ES Still Climbing

spycharter — Tue, 21 Feb 2012 14:09:38 +0000

ES is still climbing. The target is 1373, ES should hit it this week.

ES is still climbing, holding all major uptrends. I am very certain this target gets hit this week. But more importantly what happens afterwards?

I think what happens after the 1373 high will present the best trade opportunity this year. There are a lot of possibilities but with all the bullish momentum I think ES will eventually continue up over 1400 and head towards 1500.

So if a big pullback follows after the 1373 high then I’m going to be a buyer. So I’m guesstimating that ES will rally 5-10 points above the old 1373 high and then pullback. I think the biggest pullback we can hope for at this point is back down to the 1310-1320 range. I then think ES will hold in that range and rally back above 1373 and head over 1400.

It’s possible that ES pulls back and never reaches 1373 again but it would be surprising given the strong rally from 1068. I think the market’s intention is to rally and we have to buy pullbacks at this point.

It’s also possible that ES rallies over 1373 and never looks back. I highly doubt this will happen. At the very least ES will rally to 1380-1390 and then pullback to 1373 to backtest the breakout. I am so confident this will occur that I will look to scalp to the short side when ES hits the 1380-1390 range if it hasn’t already backtested the 1373 breakout.

Until ES hits 1373 all we can do is find a way to safely get long and aim for 1373.

E-Mail address hijacked

spycharter — Fri, 17 Feb 2012 22:01:08 +0000

It seems like some prankster in Romania (fiberlink.ro:79.112.68.145) broke into my spycharter@gmail.com email address and sent out a bunch of spam. I apologize if anyone received any junk emails. I believe I have corrected the issue.

GC Poised to Make New Highs For the Year

spycharter — Fri, 17 Feb 2012 14:09:37 +0000

Gold is consolidating and has held above 1706. I believe Gold is poised to make new highs for the year.

There are three things that can happen when a security breaks an uptrend line:
1. Sharp drop
2. Drop followed by backtest (followed by sharp drop or continuation of rally)
3. Sideways consolidation – usually leads to rally

We are in situation #3 here. As long as Gold closes above the open (1727) then I think it is more likely that Gold explodes to the upside one of these days rather than tanks. I have been trying to short this market all year and I don’t view the current situation as shortable. In fact it actually looks like a promising long setup. So there is no reason to short this market right now.

ES Break Above 1358 is Genuine

spycharter — Fri, 17 Feb 2012 13:49:01 +0000

ES has rallied overnight and broken the 1358 high-so-far this year by 3/4 point so the new high is at 1358.75. Currently ES is trading less than a point below 1358.75. I view this is a genuine breakout of the high and I don’t think it will trap reverse. Support is in the 1352-1354 range, I expect ES to continue upwards to 1373 now.

I regard Wednesday’s overnight drop to 1334 as the pullback I had been waiting for and so I don’t have any reason to expect a pullback now. Still one could materialize out of anywhere but I think it is not likely. But if ES fails to close above the old 1354 high today that would be the first sign of weakness.

I’m not showing a chart because it’s the same old bullish story: holding all uptrends, above all moving averages, no sign of weakness. No reason to get short.

ES Headed to 1373 On Break Above 1358

spycharter — Thu, 16 Feb 2012 16:59:43 +0000

If ES breaks 1358 then ES is headed to 1373.

ES did reverse off the new high yesterday but it held support at 1334 and it looks like it is going to break 1358. If it does then I think ES is headed to 1373. And I wouldn’t look for a significant pullback until 1373.

6E At Support

spycharter — Wed, 15 Feb 2012 14:45:33 +0000

The Euro is near support from the 20/50 day moving averages and technical support from previous lows/highs. However the candlestick structure doesn't look very bullish at this point.

The Euro is in an area with a lot of support from the 20/50 day moving averages and technical support shown by the blue rectangle. Still the chart doesn’t show any signs of reversal yet but it’s a good idea to keep watching this market for one. I think the Euro could head down a little lower to about 1.3028 today. This is a total guess but this pattern typically ends in a big trap reversal day. That is look for the Euro to make a lower below 1.3028 near the beginning of the trading day like shortly after the 6pm EST open and buy it on the first sign of a hold/reversal.

I still think the Euro will head to 1.37 later this year.