Market Ready For A Pullback?

[Soultrader 12]

Are we ready for a pullback? The daily charts indicate a market slowing down and perhaps pulling back to the 20 ema at 11525. As long as prices can sustain the trend, this pullback will be healthy.

 

Taking a look at the market profile charts, we went from 4 days of equal or higher value placement. The last 2 trading sessions have created a lower value placement. Today's late afternoon rally should not be mistaken for a bullish move. We ended up developing a lower value and this indicates weakness.

 

From an intraday perspective, this information can be helpful as I will consider looking for setups on the shortside until the markets test the 20ema.

 

Take a look at the charts.

[ant 10]

Interesting analysis James.

 

The chart below shows the key reference areas above and below the close for the YM on 9/19.

 

During today's trading, the YM traded up to the high volume node of the composite profile for the previous 2 days and reversed. This becomes the key reference area above the YM's close to monitor. So tomorrow I will be watching 11660 - 11670, an area that includes a high volume node and single prints. Perhaps we'll get a shorting opportunity in this area tomorrow. We'll see...

 

The YM then traded down to the single prints from 9/13 and reversed. This becomes a support area for the YM since it appears that there are still buyers in this area.

[Soultrader 12]

Very nice analysis also Antonio Those two levels will be ultra key to watch tomorrow. Especially the high volume node at 11660 - 11670; it is also in line with the high from 9/13 and 9/19.

 

I will most likely look for a short opportunity in this area if market internals confirm it. It could be a good opportunity for a solid +30 points.

[Soultrader 12]

Here is a chart for some of the key levels for tomorrow. A couple interesting cluster zones. Also notice both of the levels you mentioned are also a cluster zone. This will be ultra ultra key.

[Soultrader 12]

Markets gapped up above the previous days range. It tested the previous days high and found buyers. Price then ended up rotating between the R1 and R2 pivot line.

 

Whats interesting is that the gap up caused the market to trade above the key price level of 11670. This area became support and offered several good long opportunities.

[Soultrader 12]

Hey Antonio,

 

Timing was off by 1 Day but it looks like we got that pullback

[Follow The Trend 10]

The Dow is not far off an all time high at the moment.

 

It might be healthy for a little pull back, consolidation and then push again.

 

However, I read recently that the difference between rental income and mortgage costs, in the US, has never been greater. Many people seem to be over stretching themselves and they will not all be bailed out by an increase in the value of their homes. Once the housing market cools, we will see the economy slowing, etc.

 

A little depressing, and it does not bode well for the medium term.

[ezduzzit 10]

Well the housing market is already headed toward the cooler and thank your lucky stars if you are not a condo owner heh, heh.

 

I think you are correct in your comment regarding equity in real estate. So many have counted for so long on their R.E. equity being there to bail them out of any crisis that might come their way however, I suspect that is going to be tested here at least temporarily. Frankly, a home should always be considered shelter and an enjoyable place to live rather than an investment, but greed is greed and everybody always wants in on a good thing. Let's just see if things decline deep enough and for long enough to shake out some of the unwanted speculation and ridiculous over-valuations from the market.

 

I have no idea where it will all end up, but then I have my hands full just trying to master the obvious on my trading charts.

 

Happy Trading