YM, ES and DJIA Analysis

[brownsfan019]

It could be a tempting long James. I'd prefer it to have come down more, but the market waits for no man.

[james_gsx]

It surely wasn't the best looking candle.

But now, the market is back down - as usual


A few things I didn't point out about the "hammer". It wasn't really a great risk/reward seeing as how there are a few moving averages just in front of it, and the risk would have been too great.

[brownsfan019]

	Quote:	brownsfan019
	It could be a tempting long James. I'd prefer it to have come down more, but the market waits for no man.

There you go. 2 hammers on the daily.

I would have liked it to come down a little more actually but nice hammers on the daily *near* my support level.

[james_gsx]

I apologize for not being quite so active in here. These injuries have really taken me out more than expected. I know, it seems like it would be nothing to sit in front of a computer with a messed up leg and foot, but it really takes a toll when I have to be on my feet all day.

With that aside, let's talk about the ES. Some interesting price action this week, well not really. Of course the double hammers proved to be accurate. But that was then and this is now - real time.

On the daily we closed above the 100 EMA. Two immediate things stick out like a sore thumb.

1 - Every newbie in sight has been screaming we closed above the 100 EMA. So I went ahead and circled all those fake outs.
2 - Look at that long wick at 1400, shows some sellers came in. There is also a huge lack of volume that I would personally want to see for a breakout of such a big level. But that's just me.

I could be looking at this all the wrong way. My bearish bias could be taking hold of me and I could be missing something here, but I don't think so. IF we close above 1400, then we would have a double bottom and could see 1550. I think that breakout would be a huge win for the bulls.

As of right now on the daily, the better risk/reward trade would be to short at 1400.



Weekly shows a similar story. Resistance at 1400 and lower volume than I would like for a potential breakout. You should also notice the 100 EMA acted as resistance on the weekly. Just by looking at these charts, some bulls might be set up for a minor heart break. But if that resistance level breaks with strong volume, then I will obviously become much more bullish.

[MC]

I like the analysis James, I see a few things different this go round though. I added the orange arrows and trendline.

The prior break of the downtrend never had a wave bounce off and successfully test that trendline. We have a leg above the downtrend now. A full leg because last time a higher high was not made, here there was a higher high and a higher low above the downtrend.

Also I noted the ema's you're running had the fast blue line fall below the red line last fake out, but here it has stayed above.

As for the low volume, thats a good thing IMO. We don't want to see volume spike at overhead resistance, that would be distribution no?

I can't lie though, I'd feel a helluva lot more comfortable if there was a test of the lows with divergence. This is why I love the market though, history often doesn't repeat itself and we have to be on our toes.

[trader273]

[james_gsx]

	Quote:	mcichocki_
	Also I noted the ema's you're running had the fast blue line fall below the red line last fake out, but here it has stayed above. As for the low volume, thats a good thing IMO. We don't want to see volume spike at overhead resistance, that would be distribution no? I can't lie though, I'd feel a helluva lot more comfortable if there was a test of the lows with divergence. This is why I love the market though, history often doesn't repeat itself and we have to be on our toes.

Good analysis, thanks.

One thing I have noticed about the 8 and 21 EMA (the blue and red) is that they are great in a trending market, but when we are range bound they tend to be slightly irellevent specifically the 8 (blue).

About the volume, I'm not exactly looking for a volume spike. But I would rather see a gradual increase in volume leading to the breakout. This would tell me that there were more buyers prior to the breakout. A high volume spinning top at resistance would be bearish, but leading up to the resistance zone and a WRB through the resistance on strong volume would be bullish in the "longer term".

[neustaju]

Check out the Put activity on ESM8 while it is at 14010-1417 Apr 28th-May 2nd. T&S should reveal 500+ lots of short contracts being taken out with single prints. 1305 INDU closing prices.

[smwinc]

	Quote:	smwinc
	I tend to disagree with the bearish tone of the majority of the posts here - we haven't really seen 'strong' volume in any of the US markets or European equities indexes (DAX / ESTX50) yet. Perhaps I'm a little hopeful, but I'd like some good news intraday, or an 'event', which gives some nice capitulation to the upside. ......................... . I'd like to see us head up towards 1415's in the S&P. We have an area of confluence broadly from 1410 - 1430. That is where I would be comfortable buying puts. But perhaps I'm too optimistic. I'm sticking to daytrading that's for sure ! Good luck

I posted that on the 9th April. Seems I wasn't the only one thinking of buying puts up here.

We will probably slowly gyrate higher into October eventually. However, don't forget good ol' "Sell in May and Stay away"

[james_gsx]

I'm still waiting for 1400 to be broken. It's against my rules to buy in front of resistance. Until then, I still view this as rangebound. Sure there are plenty of things that are in place that SUGGEST price COULD break 1400. But it hasn't happened yet. Price is king, and price is yet to break that level.