Monday, 10-08-07

Fridays knee jerk reaction to the jobs report pushed the markets higher instead of lower as expected. Monday must now trade lower than Thursdays high with 1542 to 1525 cash index the zone to trade into or else we have a serious anomaly extension. Extensions are extremely risky as they will reverse with no warning and take out the entire extension range so fast there is no escape. July 27th was a classic example of that. If the cash does drop into the 1542-1525 zone Monday it should then bottom, reverse and trade to new highs by the 15th to 17th.

Notice the two charts moving averages are at 1545 to 1540 and the lower bands are at 1532 to 1522?

Thursday, 10-04-07

The market did open weak and remained weak on very low volume Wednesday. The down turn should continue on down toward an alignment with the 60 minute chart and 120 minute lower bands with 1510 about as low as it will go by Monday. Once we have a quality low buying for the run at new highs is expected. Once price is trading below the 120 min average at 1532 the 1524 and 1513 bands should merge somewhere near 1515-1520 areas.

Wednesday, 10-03-07

The SnP 500 does not look like it will get much higher than 1551 if it even gets that high. The index has the look of a flat correction since the high on 9-19-07. That high was the last quality signal worthy of an option trade. The low at 1507 was not a good quality low and this high at the 1550 area is not a quality high. If this is a wave four flat then a drop back near 1515-1500 will bottom by Monday then rocket back up to a new high as flats are bullish patterns. If the index opens weak and remains weak late in the day then be alert for the drop toward 1515 by Monday and be ready to buy that drop is the strategy.

Tuesday, 10-02-07

Monday saw first of month/quarter new cash blow the index on by weekly projected high 1544. Since Monday was nothing but up Tuesday has to catch up the four day cycle with a down day to the 60/120 chart moving averages areas. By late Wednesday the cash index could be at 1558 or so making futures 1569 a high odds spot to short into for the drop into 10-08-07. The drop from a 10-03 high could be a 50-60 point drop.