The alert was on time

I hope you the readers are paying attention to what technical analysis has to say.
It isn't perfect and far away from it. But there are some spots , it can give you some edge.

Combined with money management , it can be a reasonable system to use.

In the last post : " Bearish divergences are spotted at 60 min charts on almost all leading indices.This doesn't mean the market will drop tomorrow.........Usually it takes for the market to digest this divergences.........The long the digestion occurs , the reversal will be sharper.......Not to forget , on the 11Th , fed rate cut of 0.5% can cause this analysis to be irrelevant........ "



Looks like the analysis was perfectly right. The digestion took several days. The rate cut wasn't 0.5% and the market sold off sharply.

The weakness was there and it only waited for the trigger of rate cut which was "only" 0.25%.

Bearish Divergence here

Bearish divergences are spotted at 60 min charts on almost all leading indices.

This doesn't mean the market will drop tomorrow but it a thing we must take in account.
The uptrend is still intact and those of you who are investors , I wouldn't be too worry.

Usually it takes for the market to digest this divergences.
The long the digestion occurs , the reversal will be sharper.

Not to forget , on the 11Th , fed rate cut of 0.5% can cause this analysis to be irrelevant.

Exit long - 66 points profit

Going out . Taking profit out of the table. 66 points profit.

Good trading

Market Commentary

Well , the sentiment is quite negative. The sub-prime and weak economic news are doing their "job" Not to mention the bears' strong momentum to undermine the self-confidence of many investors in the uptrend.

I still see an opportunity in the recent market behaviour. Lower lows are not seen yet and market breadth suggests a temporary bottom occurring. It isn't a simple thing for the market to rocket from this sell off and thus it requires a patience.

I am long from couple weeks ago in my indexwein system as the risk I take there is greater than here. Moreover , the profile of the trade is different. I keep the trade at indexwin as I believe the market will correct to the upside.

Therefore , The last trade isn't recorded at indexwin system.

Good trading

LONG

Long here 1416.00 esz7. Details later.

Exit long

Well the market didn't behave as expected.
I found this rally to be suspicious and that's why I take 7 points profits and close the position.

Good trading

LONG

I am long the market (ESZ7).

The market is ready to take action in the near future.
As usual trade recorded in my collective 2 system.

Stopped out

Market is on major sell off. Maybe because of options expiry.
I stopped out with major loss but not one to wipe capital.

We keep risk management and that's why we still have gained major profits in collective system including today.

Good trading

LONG

The market is strong.

Though tomorrow is option expiry , I still see a positive picture that makes
me to trade the long side.

In my Collective2 system , we took long yesterday 5 points lower with greater risk.

Good trading

EXIT SHORT

It's been a tuff trade.
I Closed the short at break even. At collective2 we managed to get out with small profit.

Usually when a trade is going against me in such case , I am trying to get out ASAP though I believe there is still a chance for down side move in the coming days.

Good trading

NEW SHORT

New short ES. Details later. Trade recorded at collective2.

Exit Short

I don't like this price action plus major economic numbers are about to release tomorrow,
led me to decide to take a small profit and to be on the safe side of the equation risk/reward.

Trade recorded at collective2.

Good trading
www.collective2.com/go/indexwin

SHORT

Over the previous week the market was very strong as it didn't react to all weakness signs I was getting.

Right now I still see a weakness as I am short form yesterday in Collective2 system which is very close to the price now.

Good trading
www.collective2.com/go/indexwin

confustion

Well the market is pretty hard to analyze at the moment. The VIX and VXN are pointing higher while prices refuse to decline.

So the current market status is watch out from new longs but no new short yet in the blog.
I may short at my collective2 system - www.collective2.com/go/indexwin since it's a trade that need more of attention.

Good trading

EXIT SHORT

I am closing the short position with a minimal profit.
Price pattern gave me the impression of a move down and eventually it happened but with very limited momentum.
We may still have a massive sell-off but I decided to reduce risk and close the trade.

I may re-short the market when we break down. Meanwhile I am neutral.

www.collective2.com/go/indexwin

Short

Well , market is pretty weak.

We may experience a double top but I decided to short here.

As usual , trade recorded @ www.collective2.com/go/indexwin

Fed Summary

The fed decided to cut interest rate by half point and the market said its word.

From our point of view , I didn't see any mistake in taking step aside out of the market till the announcement release. This is what difference us from gamblers.

We take a logical decision when the odds are on our favour. We don't have to be in the market all the time.

I detected a weakness yesterday but I waited for toady's action. So we weren't in the market at this huge rally but it could have been the opposite. so no regrets.

Good trading.

What to do?

Well , today weakness arrived and the leading indexes closed down.

My analysis showing a sell signal but tomorrow Mr. B. is about to say his word and things can get out of control in perspective of technical analysis.

Stay tuned.

Exit long - 28 points profit

I am closing long position. The market may attempt going higher but it can reverse.

As usual , Trade recorded at my collective2 system ( we went long a bit lower with greater risk , so the profit there is 36 points) :

http://www.collective2.com/cgi-perl/systems.mpl?session=663202903583546466586801804467887&want=publicdetails&systemid=27432745

Long

I am long now.

At collective2 , I took long 8 points lower.

Exit short

24 points profit. Trade recorded at my collective2 trading system.

http://www.collective2.com/cgi-perl/systems.mpl?session=663202903583546466586801804467887&want=publicdetails&systemid=27432745

Short alert

Market can go either way. I placed a short order.

As usual , Trade recorded at collective2 system.

There is also a 7 days free trial and the cost is only 49$ a month.

Not only you get an instant message/SMS when any order is placed but you will receive a intra day trades as I trade.

Good luck

Exit long.

35 points profit. Trade recorded at my collective2 system :
http://www.collective2.com/cgi-perl/systems.mpl?session=663202903583546466586801804467887&want=publicdetails&systemid=27432745


Please see performance link here :
http://usindex.blogspot.com/2007/04/to-break-out-or-not.html

LONG

Going long. Trade recorded at collective2.com.

http://www.collective2.com/cgi-perl/systems.mpl?session=663202903583546466586801804467887&want=publicdetails&systemid=27432745

Good luck.

Out - Exit short

Taking 10 points - I may re-short this market.

Trade was recorded at collective2.com -

http://www.collective2.com/cgi-perl/systems.mpl?want=publicdetails&systemid=27432745&session=234533883142655022631511812754301

Just closed intra-day

Just closed intra-day trade @ http://www.collective2.com/cgi-perl/systems.mpl?session=93485179248556263417345234444143532&want=publicdetails&systemid=27432745

Short 1466. covered 1456. 10 points profit. continue with the short from 1453.

Close long and reverse

I am closing The long with a loss of 15.50 points and reversing to short.

A real time update was posted at http://www.collective2.com/cgi-perl/systems.mpl?session=93485179248556263417345234444143532&want=publicdetails&systemid=27432745

Real-time updates

The market is performing what is usually called a rocking bottom. No immediate and aggressive advances though no major declines. Traders starting to realize that panic is over and things look like getting back on track.

For Indra-day signals and receiving on-line notice once order is placed , you can review my system at collective2 site -

http://www.collective2.com/cgi-perl/systems.mpl?want=publicdetails&systemid=27432745&session=746818468483882455100115483868916

Update

As you noticed the last trade was very hard to handle. The reason I don't exit was Panic.
The VIX is at extreme high , suggesting panic is about to vanish.
I hold the position and know for the coming weeks the markets will fly from here. So I held tight even though it's still not easy.

For investors the, I must stress , Unless something very extreme will happen (i.e. NC bomb) , these levels are very attractive to buy.

New long

New long placed @ 1468.50 September S&P 500 E-mini contract.
we may expirence a one more leg down but you never know.....

Out - Exit long

I am out. Exit long 1472.50.
15 points profit.
I still believe we may have a rally next week but now it's look like a neutral.
I am planning to take long if the market will allow ,at lower levels. Stay tuned.

Long

LONG @ 1457.50 s&p E-mini contract.

Good trading

Out !!!

I am calling to close the long trade. It's quite a major loss but as we experienced in the past , 2 trades of 25 points profit can overcome it.

The market is too volatile for me to try to stay and wait for correction. I still believe we can bounce more but for leverage trades , it's too much. Moreover, there is a risk for more swiping longs , so why to risk more?

For investors , No need to panic.


When I first entered the trade , It sure looked like a brief correction and I didn't realize it's going to be a trend change for intermediate term. So the market said its word and now the most important thing to do is to sit aside and watch.

Panic is here !

Panic is here and needed to be taken in advantage. Yesterday the sell off was combined with a panic and when this happens, usually the prudent way to act is to wait till close ( or all longs players are dead) and then to re-evaluate the position. As it looks , we will need some patience.

The market in similar situation in the past ,bounced several percents from this levels but it may do a new lows. All breadth suggesting a correction. I will evaluate today activity as If I would see a good exit point -a post will be published . It's better to exit in reasonable loss than to bite leaps for more than a week.

Look at NYSE new lows reaches the 700 area. As you can see it is a major bounce area.

What's next?

Market ignores all buy pressure and that's mean panic is celebrating. When it appears - I would wait for the close to see what's coming.

Long here

Taking long here @ 1518 .sp500 e-mini contract. details later.

Breadth Saying up

Breadth indicators suggesting another move up. much like the one last week when we closed the short position. Unfortunately I am not sure If I would be on-line available Monday till Tuesday ,to monitor the market.

I hope so, to post a long call but I would like to see the market behavior first.

We have also positive divergence in the leading indexes. Divergence suggesting a reversal point coming but the timing is up to the chart reader. That's why you don't need to jump on a trade every time divergence occurs and have more tools to define current market status.

Good trading

Support here !

If momentum is alive , support levels are made to be broken.

This wasn't the case yesterday and that's why I exit the short. I do believe the bears are still around and as you know , we don't enter right away from long to short , as the market usually doesn't behave like.

There is usually a time for exchanging flags between the bears and the bulls. So I am waiting for more clues as the options expiration on Friday isn't usually categorized in big momentum plays.

Exit short - 15 points profit.

Exit short - 15 points profit.
Update later.

Short alert

Short alert !

Don't like the way the market behave. looks week and waiting for the bears to show around. An update will be released. Longs are not recommended at all.

Risk Permium

When looking at the volatility index , there is a interesting pattern that occurs. The VIX which known as the fear and grid indicator is telling us that although market is advancing , the fear from crash is here. how can we know that? By looking at the index - you can see the market makes new highs but the VIX no new lows. So pay attention all investors and traders.

Thank you

Yes - that's what we need to say to the market - because immediately after the exit point,

NASDAQ , S&P500 , Russel , DJ began to advance. Yesterday S&P 500 advanced 0.57%.

So what's now ? Well It's a difficult situation. We have strong bulls with positive divergence here but the bears are still around. So I can't call it a long nor short. I am neutral till further signs from the market.

Take it !

Exit short. 23 points profit. i won't be on-line most of the day so I take profit now before the market will swap it.

The trend is your freind

Well sure it is.

But sometimes the trend for the short term, signals us for a potential reversal point only 0.5% change .I am not sure if this is the case now. You never know how it will be ended.

I see some weakness on all indices. Take a look at the Dow Jones Average index , 60 min chart. Negative divergence just sitting there and wait for the bears to show.

So be careful with longs here. As I published yesterday , I am short.

Weak market

As of today , current market - S&P looks quite weak.
I favour the downside. I believe the bears have the power to do so.

Update will come later.

Exit long - 27 points profit

Exit long. 27 points profit. I believe we would see some declines next week but lets wait and see.
Thank you.

Did you survive ?

I hope you survived this harsh volatile environment.

Finally the market recovered and bears suffered in the last 2 days. However when looking into SPX and NDX charts , there appears a not alike bullish candle - inverted hammer which hint that there could be another wave down before we continue to advance. Look at the chart below of S&P500 with my best guess.

I remain bullish overall though I hedged myself a bit.

RISKY BUT

As the market continue to act volatile and angry , it shows a sign of bullish.
Look at bullish divergence here at SP500. so i would take long but it ain't conservative alert , so pay attention in this wild environment.

Taking Profit

We waited and the down move came just in time to collect more than 20 points e-mini S&P to our pocket. In the meanwhile the market can bounce here but no conservative buy signal yet.

Waiting for decline

Well , as of Monday close - the market looks approaching his top.
Monday was a typical distribution day and it's a good stop bullish sign. We may have a few distribution days in the rest of the week but the short are just across the corner. And remember the more those distribution days occur , the stronger the down move would be.

Good luck

Watch Out

Friday trading on the NASDAQ 100 (NDX) gave us a rare pattern with 2 components.

One is the the daily data. First huge gap up when open is above high yesterday and second a black candle. Not a positive signs for bulls.

Second, we entered a possible turning point according to volume reading - please see the chart and what happens when the volume is above the blue line. Usually a reversal point. So be careful out there. I am not short yet.

Another win !!!

In my last post - what's next? , I alerted to watch for a bullish bias as the SP500 signaled a positive sign upwards. So what happened since ?

The market struggled with an extremely volatile environment but finally moved to our side with a favourable 20 points profit. So I decided to take the profit as I aware we are still in bullish sentiment and the market can advance much higher. So at the moment I am neutral.

what's next?

After seeing the market drops well below out of taking profit point - we examine the market closely and revealed new signs of bullish. On Friday we got a buy signal on daily charts on all major indexes. Usually this signal is very strong over a period of week or longer time frame.


Below is SP500 daily chart. The yellow dot is a bullish sign.

Another 20 points profit

I hope you guys followed the last post of the blog. In the counting profits post I wrote :

"Today we got some sort of exhaustion pattern. I suspect this levels are quite dangerous for longs and prepare for negative bias if not today then next week."

Oh boy - It came strong and fast - as sells off are usually act. 20 points E-mini SP500 were taken. I decided to lock profits instead of letting the market to deceive me.

In the below image you can see the entry and exit timing.

So what's next ? First , the bearish bias is still intact though there are signs it might changed.

Take a look at VIX chart. For those who are not familiar with method - you are invited to take a look here - method was developed by Mr. Connors.

According to the method, an upside reversal point is expected. Pay attention that this method does not have 100% track record but usually gives you another reasonable vision of current market direction.

Counting Profits

As I alerted in my previous post Going higher ?

"Looks like the bulls want to push it one more time higher."

The SP500 traded at 1515.70. Yesterday close was 1531.18 and futures are going higher now as we took 20 points profit in the SP e-mini. So what's next? Today we got some sort of exhaustion pattern. I suspect this levels are quite dangerous for longs and prepare for negative bias if not today then next week.

Going higher ?

Over the last months the indices have been waiting for brief declines of no more than few days to reach new highs. On Thursday the SP500 was 1% sold off but on Friday we surprisingly or not , recovered a bit and hidden positive divergence has been taken place and can be seen in NASDAQ 100 and SP500. Although we are at the supply zone in SP500 - watch for more upside bias in the next week. Looks like the bulls want to push it one more time higher.

Supply Zone

The SP500 is a spit distance from all High levels. This area at the year 2000 provided quite established resistance to send the market much lower. Will it stands also these days?

I am not sure. But when negative divergence are screaming everywhere - it looks reasonable to step a side from the longs and prepare for some reversal.

Time for reversal ?

Is it the time for reversal ?

Yesterday The sellers came in power and pushed the SP500 from 0.8% up to no change level.

When looking into NDX daily chart , I can see the index is at the upper channel. So I would be cautious here with longs.

Exhaustion

Friday's close outcome an exhaustion pattern. The pattern occurs when the open of the current day is above the high of yesterday. Means small trades/investors who are trading at the open , are anxious to place new longs or cover shorts. They are in panic.
The big guys identifying these behaviour and taking advantage of it by selling.
In the below SP500 Cash chart, you can see what happened few days after the pattern occurred. (The red dot above the price).

Where are we going?

I hope you took what the market gave us two days ago.
The bears had no power nor the will to break down 1480 level at SP500 . So watch this 1480 carefully.

Looks like the SP500 wish to reach a new highs in the coming days although there is something fishy in its handle.
In conclusion , watch for a choppy market with an upside bias.

Party is over

Well , it sure looks like the rally is over for the short term.

Our Analysis from Friday is on the right way.
Please note that you should consider take what the market is gives us. i.e. If you short with profit although the sentiment is still bearish , don't let the market swipe your revenue. You can place stop loss above the high of yesterday.

Take a look at the NDX chart below. Whenever the market crossed and touched the Volume blue line at the bottom of the chart , we got a point reversal. This phenomenon suggests swapping hands between bears and bulls , and therefore the very high volume - way above the average.

End of party :?

The market continues to ignore divergence though as you know every party must come to its end and I believe the current rally is approaching that step.

Take a look at the 60 min SPX divergence. We do need to back off a little , to charge power , if this market wants more upside.

Bar Mitza for the DOW

Well , at the moment the Dow Jones industrial average crosses the 13,000 level and celebrating

Bar Mitzva (When a Jewish boy reach 13 years old). This situation when the market ignores overbought area , is quite destructive for Technical analysis traders. That's why I become neutral at the moment and waiting for the dust to be settled.

Performance

DISCLAIMER

Government Required Disclaimer - Commodity Futures Trading Commission. Futures and options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.

CFTC Rule 4.41- Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefits of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.

Huge rally more to come?

Not sure about that....

This negative divergence appears also on the NDX 60 min chart.

Plus take a look at Friday's NDX movement. open at huge gap up
and closed way below the open. The first hour candle is also bearish one.

Stop Hunters

Take a look at this stop swapping and then immediately going back to range. Since my last post
Which indicated a bearish sentiment - the NQ - NASDAQ 100 futures is traded -0.8% lower and Still there is more room to come.










and thats the way it looks like in daily chart.

Going up ?

Generally the blog will concentrate on swing trades - 2-5 days trade and will
move from one sentiment to the other.

Hopefully, if the sentiment would long more than few days , we will take advantage of it.


The US market seems to be lacking more gain at the moment. Take a look at the NDX chart.
Negative divergence usually signal a turning point. I would Watch for bearish sentiment.