Wednesday Evening 23 September 2009
After spending time preparing and marking up a few charts, I forgot to upload
them to this sight, so there is no art work. Imagination is required.
The first chart that is not shown below was SPY, the ETF for the S&P, alphabetically
speaking. While the futures made a new high for the day, SPY did not. It equaled its high of 17 September, the astrological date that called for a high in the market
and discussed here a week before the event, [see As Above, So Below article].
That little divergence was interesting to note, and it was shortly after the futures
went to new highs that the market began to sell off, in earnest.
The second chart not here was the 60 min S & P chart that showed how price
reversed fron the high and formed an Outside Key Reversal, [OKR], typically a sign of weakness. In this instance, it was the sellers overwhelming buyers and forcing
price lower than the previous low, after making a higher high than the previous bar
high, and closing on the low end of the bar. Plus, there was volume to go with
the sell-off.
Speaking of volume, the past three trading days for the S & P, in new high territory, was marked by the lowest volume in a few weeks. It was a hot air balloon rally with the Fed running out of hot air. On the SPY intra day chart, volume for the last hour of trade was the highest since the lows as price came cascading to a 2,000+ tic
drop from the high before a little short-covering rally came in near the close.
The weekly and daily trends remain up, but the caliber of today’s market activity is
a huge red flag for the daily trend, not to go short; just not to be long. The 60
minute intra day chart has gone from up to a trading range that goes back to the
17th date. If price breaks under 1052, the 21 September low, [day session], then
the intra day trend will turn down and offer some short potentials.
What needs to to monitored now is the quality and character of the intra day
readings. George Soros, mistakenly given credit for “breaking the Bank of
England” when he spent $1 billion on the short side, has said, “If you understand
the micro, the macro makes more sense.” So a read of the smaller time frame 60
and 10 minute charts will clarify what direction, and how the day time frame will
develop.
We are beginning to smell opportunity in this market….even without a chart.
Cheers!