Monday, 10-29-07

Friday gapped above resistance and closed above the significant resistance at1533 closing at 1535. That has driven the stochastic to a quality overbought condition. Look for a drop to 1515 ma areas then a bounce back to the high by FOMC policy Wednesday. After FOMC I look for a week of down cycle bias.

10-26-07, Intraday

Pre market SnP futures were traded up to 1539 before the cash market open. That forced buy programs at the open thrusting the cash to 1530 area. I took profits on the SSO 200% leveraged SnP security at 1530 purchased at 1500. We look for 1.5 to 2% moves on these short term swings and take profits when achieved, average hold is 4 days.

The wave "4" pattern remains alive as long as the 50% retrace at 1533 is not traded above.

Friday, 10-26-07

First test on the first day passed the test for a typical wave “4”. Todays projected lows expanded lower from yesterdays lows of 1509/1503 to 507/1496. The daily projected highs are at 1519/1503 for Friday. Since Friday is a four day cycle day three do not look for much volatility. As long as the SnP cash is trading below 1526 a sideways trading range continues and if it continues until the FOMC then expect a drop to the 1470s.

Thursday, 10-25-2007

The drop to a double bottom low Wednesday has opened the door to a potential developing five waves down pattern. The bounce off the low should then stall near 1523 for wave "4" then drop into the 1470s to complete five waves down. If that does in fact happen the 1576 high is “THE HIGH” for the advance from 2002. Therefore be alert, be aware and cautious for this pattern.

Wednesday, 10-24-07

Tuesday did open higher as expected however buyers jumped all over the future early so we did not get the low risk long entry from 1508 to 1505. The end of day rally did achieve 1520 so we got almost everything expected so far. Now it gets a little risky Wednesday. Wednesday is one of those day when volatility may get a little crazy and if it opens up to 1528 that “could” be the high for this bounce. If it opens down first a dip of 4-5 points should lead to the run toward 1528. That should get the two charts stochastic solid overbought.

Tuesday, 10-23-07

The SnP bottomed Monday and is now up bias into at least Friday. Tuesday after an up open scalping a long if Dec futures drop to 1505 area looking for the cash to run up to the 1520-1530 zones.