60-minute chart looks decidedly bullish if you look at only RTH, but the bullish divergence is spoiled if you consider the AH decline. 4-hour chart is ambiguous. Daily and weekly look bearish, and monthly looks extremely bearish. Consequently, while a short-term pop is possible early in the week to relieve the current extreme oversold condition, I expect the week to be a downer. (Also the month, quarter, and year.) Interestingly, the AH price action on a 15-miute chart suggests a measured move to 1430 (which coincides with an obvious resistance level). One possible scenario is a decline at (or even before) Monday's open to 1430-ish, followed by a 45- or 50-point rally that would retrace 50% of the downmove from 1526 -- or possibly even a bigger rally that retraces 50% of the downmove from 1558. Of course, the tale will be told when we find out whether B1S2 covers his shorts at 1430-ish for a 75-handle profit, or whether he takes the heat and holds onto it until sometime in 2009 when the SPX is below 1,000...
Current option interest points to 1440 - 1480+ some time this week. A spring can only compress so far before it pops you in face.
Yes I am still bearish on the market however there is a pretty strong bullish pattern developing overnight. The lower low in the globex has completed a possible wedge and you combine that with shoulder on the left and you can see the potential bullish structure forming. If they can rally it back above the 1465-1470 overnight look for the market to form a base at the prior left shoulder to start a pretty strong leg to the upside. If market does not rally back above then of course the odds way to the downside. Just something I am looking at for tomorrow.
Within 10 points of Sep support, divergence still valid. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1675823>
While there may be intraday bullish patterns, I remain short as longer term charts are bearish. I will be treating any intraday bullishness for now as "bounce only". I am at full position. Nothing to do here but watch.
Diamond reversal in pre-market, anyone? <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1675940>
Not buying this rally, currencies are wild with the yen down big again. Make sure you adjust your position size for the greater volatility. Good trading.