Morning Update: 5/18/2012

The stock market  indices moved sharply lower within confined channels and each rally failed at resistance. They had a 5-wave move today, with the 5th wave being the steepest, closing at the lows for the day going away. It can’t get much worse than today’s action.

It was extremely negative. With many Oscillators already at negative extreme conditions, I’m expecting to see the steepest oversold reading on the indices I’ve seen in quite a long time, and perhaps a set-up for a sharp snap back rally.

Right now, momentum is to the downside. The indices continue to fall as I stated in the last week or two. I expected the indices to fall into this timeframe. Perhaps tomorrow or Monday could be a pivot point where we could snap back from.

Stepping back and reviewing the hourly chart patterns, the sell-off continued with abandon today as momentum increased to the downside. When support was broken early on, they did rally back to complete a 1st-wave, and then a 2nd-wave failing right at intra-day declining topsline moving averages. Then another steeper leg ensued, with an early afternoon snapback, failing once again at resistance on both the NDX and S&P 500.

That resulted in a late rollover that took the NQ_F from 2547 down to 2509 in the last couple hours. The ES_F dropped from 1320 to 1305 in that same timeframe, and closed at the lows going away. There was a negative 1407 on the New York Stock Exchange earlier in the session, but that failed to close enough of a rally to break them back out, and at the end of the session, they closed extremely negative.

We’ll see how it goes tomorrow. We may be reaching a climatic-type sell off the lows shortly.

No trades today 5/17/2012.

6A, 6E were longs I took the day before yesterday which resulted in two losses. Didn’t wait long enough for a balance area to form and resulted in two very frustrating losses.

Friday, May 18

Economics
No major U.S. economic reports scheduled
11:00 Fed to purchase $4.5b-$5.25b in 8 to 10-year notes
01:30 CNY China April Property Prices
06:00 EUR German Producer Prices
12:30 CAD CPI

Earnings
Before:
Foot Locker (FL) EPS 74c, revs $1.55B

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Morning Update: 5/8/2012

Back from a two month vacation….!  Time to Rock n Roll!

The market indices were mixed today after a very rough start,  futures were down sharply. They then bounced back sharply in a 5-wave advance only to pullback after making nominal, new, minor, breakout highs. They failed to go any further. The NQ, however, did jump from 2621 all the way up to 2652 at one point. The ES went from 1364 up to 1374. In the afternoon, they stair-stepped their way lower, and backed off to close mixed on the session.

The stock market had an interesting session on Monday. They were down early, rallied back the rest of the session, and…

Net of the day, the Dow was down 29.74 at 13,008.53, the S&P 500 was up just 48 cents at 1369.58, about 6 points off the low, and the Nasdaq 100 up 1.36 at 2639.28, about 19 points off its low.

Advance-declines were about 250 issues higher on the New York Stock Exchange, and a very similar amount on Nasdaq. Up/down volume was narrow, but positive on New York, and narrow, but negative on Nasdaq, so net-net, it was a flat day.

Stepping back and reviewing the hourly chart patterns, the indices gapped lower, and then stair-stepped their way higher in a 5-wave advancement. They pulled back in the last hour, or so, to pare back the rally, but closed mixed on the session. Still, it’s an unresolved pattern as the indices tested support most of the day, and bounced, but that’s about all they did today.

We’ll have to see whether there’s any upside or downside follow-through tomorrow.

No trades for today.

I’m looking for a minor to major degree balance area to form in which an initiative or responsive position can be taken.