Market Outlook

[AbeSmith]

	Quote:	EOD Traders
	Bears are not convinced by the recent Market action. I am neither Bull nor Bear @ this point. Time will tell. Doug Kass, founder of Seabreeze Partners, suggests buying the weakness that would possibly result from only a 25 basis-point cut and selling the strength that would possibly result from a 50 basis-point cut. "If there were a limited or opposite response to my two scenarios, I would do nothing,” Kass says. Prudent Bear Fund manager David Tice expects the Dow will fall another 5,000 points and stocks will fall by as much as 60 percent. "Everyone has patted the Federal Reserve on the back for avoiding recession,” Tice told the San Francisco Chronicle. "The problem is, we should have taken mini-recessions along the way.” Even gloomier, Euro Pacific Capital’s Peter Schiff believes that the new financial capitals will be in Asia, the Middle East, and Europe. "New York will certainly still have a role to play, but much like Detroit, it will be but a shadow of its former self,” Schiff says. Resolution to the bottom of the market being reached appears to be unresolved. Today may have just been a YAHOO burst. Next week should give a a clue.

Thanks EOD Traders. Sorry I didn't notice your post beofre.

[AbeSmith]

	Quote:	james_gsx
	The only thing I would recommend is wait until you get a better risk/reward setup before going short or long. But if this setup was in your trading plan and you took the trade, then that's what matters. Each individual trade is irrellevent over the course of your career. Good job!

Yes. Good point James.

[Phantom of the Pits]

Market outlook as of Feburary 2008 is like a swinging door. Meaning - Good opportunities now that we have a chance to buy the bottom 1/3rd and sell the top 1/3rd of our chosen ranges.

POP

[MC]

	Quote:	james_gsx
	The only thing I would recommend is wait until you get a better risk/reward setup before going short or long. But if this setup was in your trading plan and you took the trade, then that's what matters. Each individual trade is irrellevent over the course of your career. Good job!

I used DIA so I can get the volume in there, for some reason with a TOS prophet chart on the DJI I can't get volume even for daily.

This looks like a nice spot for a short...JMHO.
We have heavy resistance and the volume has dried up on the rally, we probably need new buyers/fresh volume to break that resistance. Also on the fibs we are in the ambush zone and close enough to the 50% level that I see good risk to reward using that 50% as the stop trigger.

I'm curious on your view of where we are on risk/reward and what you're looking for now. This site has the best traders and up and comers, I value all the opinions on here.

[Phantom of the Pits]

Good point. Just remember to sell early is to suffer longer than needed. There always seems to be early buying and a late selloff if indeed.

POP

[james_gsx]

Heres my view. The weekly and monthly charts look bullish to at least 13,000. We had a head and shoulders or double top on the YM which made the target in the 11,500 - 11,800. Price hit those levels in the wick we had a few weeks ago, it doesn't matter if price hung around those levels or if price touched them and took off. What matters is price was ACCEPTED at those levels, then moved higher. I expect price to test the old support level (which would now be resistance) before moving lower.



Volume may be drying up since the sell off, but if you look at where we've been volume is still very heavy. Looking at the INDU monthly we had a small box play, and that target was hit as well. Now we have a hammer with heavy volume which is bullish to me. Unfortunately using candlesticks we cannot come up with a price target like we could with more traditional TA. But I think it's safe to say we will at least test 13,000 before we test the old lows.





Not sure if makes any difference, but gold looks a little bearish here. I think if the market sentiment was to keep falling gold would be a safe haven and would look bullish. As you can see in the chart, we had a bull flag that broke out. Once the target was hit we got a gravestone doji with strong volume, this tells me the sellers came in and price wasn't ready to continue moving higher. Dojis are powerful signals in up trending markets.



Again, that's my own homework a long with some other things I've been reading. But if you do your own homework and come up with something different then trade that. Good trading!

[MC]

Nice analysis James...I agree with the overall sentiment, we just see the path slightly different.

Starting on the 24th I see some selling at tops and drifts up on low volume so this is why I think we may pullback prior to the 13k level but time will tell. Either way, this was my first bearish period in the market and it's funny to see how people shift to bull mode way too late and even still many are doom and gloom. You can tell who the real contenders in the market are/will be by how they handle the news and refuse to get sucked into the drama.

[james_gsx]

Exactly MC, I just try to play the charts and I'm more of a short term thinker. I don't understand VSA like some do so some people will see things completely different then I am so I am all eyes and ears.

For a while I have been bearish mainly because of the volume slowing on rallies and building on sell offs. But I really do think these rate cuts will help out tremendously over the long haul. I'm not calling for new highs or anything.

[Anonymous]

	Quote:	mcichocki_
	This looks like a nice spot for a short...JMHO. We have heavy resistance and the volume has dried up on the rally, we probably need new buyers/fresh volume to break that resistance. Also on the fibs we are in the ambush zone and close enough to the 50% level that I see good risk to reward using that 50% as the stop trigger.

I think you're right. That last candle does look like No Demand to me. The real key is the Hammer that you alluded to. We probably need to see more volume to push through that level.

Having said that, the game is fixed. The fed, whose mandate is unemployment and INFLATION, now has taken on the job of supplicating to the market.

[james_gsx]

So we finally got our push down today but with very little volume. I see a smaller body that would normally raise a red flag since it was at resistance, but I'm a little torn with the light volume. What do you VSA guys say?

I would have used a YM chart but the candle came up weird on eSignal so I used the ES instead.