Monday, 9-24-07

September 19th we got a quality sell signal for a short term trade from the 1530 areas. Notice the 60 minute stochastic was walking the ceiling as the 120 minute was just below. Now both should get quality oversold for the next buy around the 26/27th.

This is our mechanical model that gives us a very good buy and sell set up. For a sell Column N must be 150 or greater, column M at 100, column F at .75 or higher, column B above 100 with the closer to 150 the better the signal. When those parameters are met a quality sell signal is in place. I like to see column B decline before taking a position however if its above 150 and the other values are met it is safe to even use an option. Once the option is up 30% take it. Column D & E values give you the up trend and down trend values. Monday first hour those values are 1514 and 1508. Once the SnP is closed the bottom of an hour below 1508 the short term trend is down until it closes an hour above column D value.

Next week 1500 to 1490 is the projected low range for the week if the market is going to 1605 by 11-23-07 as I favor it is.

Friday, 9-21-07

Friday we should get a move back up near the high with 1531 about as high as I would expect. Any higher and something more than a 60 minute chart oversold bounce is going on. From 1531 we should then drop into the 26th to get both charts oversold then higher.

Thursday, 9-20-07

60 minute chart has traded back below the upper band however the 120 minute has yet to do so. You may see the lower 1540s probed before the market tops and drops to the 1496 to 1488 moving averages areas. By the 27th we should be trading at the 45 day moving average and if that holds support still looking for 1605 by November.

Wednesday, 9-19-07

A .25% rate cut would have got us the spike and drop pattern, the .50% got us a huge short covering rocket ride. The SnP emini went up 27 points in about 15 seconds when the news hit. Two possible short covering rally targets, 1522 or 1540. No top is possible now until a full hour trades inside the 60 minute chart upper band. That may take all of Wednesday to play out so until the shorts are out this will continue. We are long from 1440-1450 areas looking for 1605. This .50% cut may take us out near 1540 as this is bad news for the markets and once this short covering is over it could tank hard and fast.

Tuesday, 9-18-07

Well, here we are on FOMC policy day with the 60 minute chart bands compressed and ready for a big move. Odds are Tuesday continues to trade like Monday until the 14:15 policy statement. A quick pop up to 1487/1490 is then reversed dropping to the 120 minute lower band at 1445. The weekly projected down cycle low is at 1437 so expect it to be approached by +/- 3 points.