MARKET COMMENTARY (7-10-09)

I will do a complete SPX analysis today, just for the hell of it. This is just one of the steps I take to prepare for the next trading day.

Here is the 5-day chart + 1 blank day:



Each trend line is important in the setup of a blank day. The current anticipated range should be between 870-900. I know that that is pretty wide, but that's how it is. Some days are narrower and others are wider. The small orange boxes indicate intra-day pivot points that coincide with their respective trends. If done correctly, multiple lines should perfectly intersect each other. I give more weight on dual segment crosses thank single ones. Why? Because it is reasonable to anticipate slightly stronger support or resistance at these areas.

Moving on to the 2-month/60-min chart + the rest of the month:



I marked the shorter-term consolidation areas while simultaneously marking the pivots are the wider swings. These are my danger zones, or areas where I have to pay closer attention. Why? Usually large breakout or breakdown spikes usually create enough force for a temporary trend shift.


Now the 3-month/60-min chart:



The three separate boxes enclose the largest swings. The green and tred areas indicate that consolidation will take several weeks. Notice how not much time is spent in the orange box. This is the 'battlefield'. Major shifts occur in this area and it doesnt take long to determine the winner.


Finally, the 5-month/daily chart:




This puts everything I talked about above into perspective. It allows me to guestimate how the month will look like. This range is between 840-930., the major determining point obviously being 875-880, or the horizontal neckline (and current location of the 200-day MA).