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Wednesday, May 25, 2011

E-minis [Update 3:30PM]

[Update 3:30PM: As per this morning's suspicion, e-mini 1323 was in the bag due to the positive divergence in MACD, etc.  The near term target is 1328.5 where the Sunday night gap down exists in the e-minis. This level corresponds with resistance. Then we see.
[Update 3:21 PM:  The best overall long term bullish count is a Minor 4 triangle still. Playing around with cycles results in some interesting patterns.  I have the final Minor 5 high timed for a Fibonacci 13 months duration for Intermediate (C). We would need to confirm [c] wave is over and [d] up has begun.
[Update 1:50PM: The old adage about support is that if it keeps getting tested, it can break.   The series of 1's and 2's down is still a very much legitimate count.  We have plenty of headroom here for red [2] to meander a bit.

Although the SPX cash index hasn't followed the e-minis futures down under support, market internals are fairly weak so-so and there is plenty of time left to close the market in the red or if you like, it'll happen tomorrow.

I was correct in seeing that the 20th of April candle range and gap was important to the bulls. Call me Captain Obvious. They again defended the very lowest end this monring. And now the 20th of April gap up is officially closed.

The rebound, although a temporary relief, has a long way to go to fully correct the technical damage done here above 1312. For instance to break the "lower highs" your looking at a market that has to traverse all the way to 1346 SPX.

For the bulls, they need to hold the market flat here at least and try for an overnight gap up situation to gain momentum to any upside in a bullish open tomorrow and break some short stops.

I'm apt to think 1312 will eventually break down here but, as usual, its all about timing. There is a lot of uncertainty and you figure that has got to favor the bears at the moment.  We just need some real selling of course.
Nice recovery.  Positive divergence on MACD and stochs suggests we are going back up to above 1322 on this chart or higher. Having the overnight futures plunge like that and if the cash index fails to follow it likely marks a turning point (in this case bullish) even if only at a small degree.

Just like at 1249 SPX the futures had an overnight plunge and the cash index did not follow the next day. Or at the 1370 high the futures got way more bullish overnight and the cash SPX failed to follow the next day although it tried.  All these marked small degree turning points.

Still obviously a lot of time left and I have to go to work, but those are my thoughts at the moment. The e-mini  gap down at 1328.5 is the short term target for e-mini bulls.
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