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).

MARKET COMMENTARY (7-9-09)

Nice reversal at the end of the day. This was confirmed by a hammer on higher volume. The close also puts the head and shoulders formation on hold since the market was unable to close below the horizontal neckline. We are at regular oversold levels, so I do expect a sustained up day.


I will be busy today, but I will try to fit some trades into my schedule.


Here is the SPDR sector breakdown. Many are showing high vol reversal candles. XLB, XLE, and XLI are forming falling wedges, with upside targets as close to the upper boundary as possible. XLP is still forming a bear flag. XLU is in an ascending channel. XLY is range-bound but with a smaller descending channel within. XLF is forming a large descending pennant/descending triangle. XLK is forming a symmetrical triangle with a smaller descending channel within.

MARKET COMMENTARY (7-7-09)

Blood Angels Land Raider/Thunderhawk Gunship Assault

---

Let me reiterate something here. The head and shoulders pattern is only confirmed when the neckline is broken. The neckline is the last major support level that is keeping the chart intact, and it's not broken, yet.


In addition, I see possible symmetrical triangles forming on the COMP and SPX. Keep an open mind to all of the possibilities that are present. If we consolidate long enough, and the pattern remains intact, then we might not even decline as much. I am waiting for further confirmation by either a H&S neck break, or continued neutral range-bound consolidation.


Here are the SPRD Select Sector ETFs. XLB, XLE, and XLI are forming descending wedges. XLV and XLU are still in ascending channels. XLK and XLP are forming symmetrical triangles. XLY is in a neutral range. XLF is still forming a large pennant.

MARKET COMMENTARY (7-06-09)

The market will open just 2-3 pts from the 200-day MA. I expect strong support at this level. I left enough spaces for the rest of the month. I did this a several times up to this point, but it's all the same - it's going to get complicated for the month of July.