market discussion 17 jan 11

8/8/2019 Market Discussion 17 Jan 11

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Andy¶s Technical Commentary__________________________________________________________________________________________________

S&P 500 ~ 180 min with Weekly Support and Resistance

-y-

b

-1-(5)

-2-

-3-(5)

(a)

(b)

(c)

(d)

(e)

-4-

Last week¶s message that it would be prudent to wait (for shorting) on somesort of ³sign´ was decent. The market did not trigger any sell stops (at 1233). At this point, though, I¶m getting an ³itch´ to short this thing. Thus, I¶m raisingmy sell stop to 1253, the 23.6% retrace of the last leg up (Wave -5-). 1253looks like it should be ³classic chart support´ as well. So, a break below thislevel this week should lead to more selling. A break of 1226 would cause me toincrease the level of shorts even further.

(1)

(2)

(3)

(4)

(1)

(2)

(3)

(4)

[a]

[b]

(1)?

(2)?

(3)?

(4)?

-5-(5)?

REPRINTED from 1/9/2011




S&P 500 ~ Daily (Log) with Weekly Support and Resistance

b

-1-(5)

-2-

-3-(5)

(a)

(b)

(c)

(d)

(e)-4-

Patience, on initiating shorts, was once again rewarded last week as thisoverextended market continued to grind out shorts like chuck beef. Thisparticular wave count is now ³out of time´ with -1- = -5- targets at 1291 and1310 (-1- = -5- in %). Additionally, the last few weeks of pricing action isbeginning to look more like a ³corrective´ channel higher--it¶s not of an³impulsive´ nature.

The bias remains to sell (initiate shorts) on signs of weakness. At this point thefirst level of support lies at 1262. Thus, we¶re raising ³sell stops´ to 1260. Themuch more important level remains much lower at 1226. So, bulls can continueto ³feel comfortable´ all the way down to 1226.

(1)

(2)

(3)

(4)

(1)

(2)

(3)

(4)

-5-



DXY 180 min. with Weekly Support and Resistance Levels


-1-

-2-

-3-

Our last look at the DXY presented a bullish ³impulsive´ wave count. The Wave -4- developeddifferently than I had imagined, but this bullish interpretation is still viable. The Wave -4- waslonger enduring relative to the Wave -2-, but that¶s exactly what the requirement is for an³extended´ fifth wave«..

(a)(c)

-4-

(b)

75.63

The proposed Waves -1- and -3- here are of equivalent length; therefore, if this is an ³impulse,´the fifth wave MU ST be the extended wave. The minimum target for the proposed Wave -5-would be 84.70, for Wave -5- = -1- -3-. We have remained 20% of a Max. Long in the DXY.We were stopped out of our last foray into adding length, but given the bullish setup here, weare of a ³buy dip´ mentality. For instance, there are layers of support at 80.69, 80.34 and 79.75.New length will be added in the following manner: 10% at 80.75; 20% 80.40; 50% at 79.85.That strategy would lead us to be 100% of a Max. Long position in the DXY at 79.85, right infront of 79.75, which is the 61.8% retracement of Wave (1).

(1)

(2)

(3)




DXY 180 min. with Weekly Support and Resistance Levels


-a-

-b-

a-c-

Last week¶s foray at ³scale buying´ the DXY was a loser. We bought 80% of a MaxLong at an average price of 80.10 and was promptly stopped out below the 61.8%retrace at 79.70 for a 0.5% loss. O h Well . We remain 20% of a Max Long and willprobably have that posture for ³a while.´ That¶s a core long position.

75.63

-a-

-b-

-c-?

b

The various waves all look ³corrective´ in a nature at this point.

Some sort of test of the 60-80% retrace (77.95-76.79) would not surprise. We¶re staying away from any more ³toe dipping´ in the

DXY until we get another ³impulsive´ looking wave higher.

(a)

(b)

(a)

(b)



G old (Feb11 Futures) Daily


I must admit that the shape of the pattern up from the late July lows is the MOSTBIZARRE pattern I ever witnessed. It¶s indecipherable to me. In other words, it¶sgoing to take me a lot more time to understand what we¶re witnessing and how itmight fit in the bigger picture. In the meantime, using classical charting methods, wehave what ³looks´ like a huge ³rounded top´ forming with a powerful looking movelower from $1,424. If a major pattern did conclude around $1,424, then $1,397 wouldbe the ³stop´ level for new shorts, the 61.8% retrace. The ³rounded top´ idea getsblown up on any action above $1,424. Good Luck here«.




G old (Feb11 Futures) Daily


Last week¶s commentary wasn¶t completely useless. This rounded top lookingpattern was identified and 1397 was pegged as key resistance (61.8% retrace off the1424.4 high). The market was repelled in front of that resistance level as bears seemto be wresting control away from bulls. 1377.8 and 1392.9 look like good R1 and R2levels in the week ahead as Gold looks like it wants to visit the 1320s.

1424.4



RBO B G asoline Weekly (Log Scale)


RBoB has been killing fundamental traders the last few months as it hasbeen rallying ³counter-seasonally on Brent Crude strength and refiningupsets. It¶s probably worth noting at this point that it¶s rallying right into the61.8% retrace of the entire decline. Additionally, there is ³chart resistance´ at$2.65--that¶s the level that RboB began it¶s unidirectional collapse inOct. ¶08.

Bottom line: there should be a robust zone of resistance between $2.55 and$2.65 for this gasoline component.

$ 2.65



WTI Weekly (Log Scale)


In comparison, WTI crude oil has been struggling to clear the 50%retracement of it¶s epic decline«..



WTI Daily (Log Scale)


What should be troubling to ³Energy Bulls,´ besides the fact that energy hasbeen the weak sister performer in the commodity sector, is the ³RisingWedge´ that both WTI and RboB are sporting the last few months. Anysharp break of the lower dashed blue line should be taken very seriously.

The ON LY way to confirm the conclusion of arising wedge pattern is a very violent and

sharp move lower.

Check out how the RSI failed to set a new h igh on repeated occasions



DISCLAIMER WARNING DISCLAIMER WARNING DISCLAIMER

This report should not be interpreted as investment advice of anykind. This report is technical commentary only. The author is NOTrepresenting himself as a CTA or CFA or Investment/Trading

Advisor of any kind. This merely reflects the author¶sinterpretation of technical analysis. The author may or may nottrade in the markets discussed. The author may hold positionsopposite of what may by inferred by this report. The informationcontained in this commentary is taken from sources the author believes to be reliable, but it is not guaranteed by the author as tothe accuracy or completeness thereof and is sent to you for information purposes only. Commodity trading involves risk and is

not for everyone.

Here is what the Commodity Futures Trading Commission (CFTC)has said about futures trading: Trading commodity futures andoptions is not for everyone. IT IS A VOLATILE, COMPLEX ANDRISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience,goals and financial resources, and know how much you can affordto lose above and beyond your initial payment to a broker. Youshould understand commodity futures and options contracts andyour obligations in entering into those contracts. You shouldunderstand your exposure to risk and other aspects of trading bythoroughly reviewing the risk disclosure documents your broker isrequired to give you.

Wave Symbology

"I" or "A" = Grand SupercycleI or A = Supercycle<I>or <A> = Cycle-I- or -A- = Primary(I) or (A) = Intermediate"1³ or "a" = Minor 1 or a = Minute-1- or -a- = Minuette(1) or (a) = Sub-minuette[1] or [a] = Micro[.1] or [.a] = Sub-Micro

market discussion 17 jan 11

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