ES Fri 8-5-11

On Thursday the market opened below the value area and never returned to it so not giving the Market Profile trader a chance to get short from the VAL. Considering the size of the down day we had today I'm surprised that we only got one single print out of it in the Q bracket at 1206 even.

Just some thoughts.
I have extension targets from the 1244
123%-1217.50
138%-1201.5
162%-1175

The baseline of that H&S pattern is about the 1260 area.
The Daily 200 MA is about 1278.
The Daily 50 MA is at 1296.(Why you trade price, not indicators- even though I rely on indicators myself.) This is usually calling for some kind of return but the daily trend is flat for the year(sideways). All that up and down occurred with them in the same vertical relative positions.

I would think a shallow return, IF there is one, to sub 1218 area/level would be (or at least could be) very negative here.I mention it because the projections from the 1347.75 high has 1196 as the 238% level(approximate). The 261.8 is at 1181 just to point out the potential for lower. I'm thinking retaking and holding 1200 would be used as a kind of victory by some for Friday, if it can do it.


Higher? I think the 1204 was the last level of need to be broken and held if memory serves. Larger scale I'd think the 1201 has to hold for more lift here. Last daily bar high about 1236-7, from today.
Prior low to take out, yesterdays 1330.
Larger scale level to break and hold. 1244.

I point these things out since the low today actually broke the high of last October. The traditional thought is a H&S pattern declines at least a length equal to the heigth. Calculating from 1260 gives one a minimum target of approx. 1137, off the top of my head. If correct, the path to it more important.


I'll also note that a usual correction target would be sub 1100 by a few points. This could be just the first of 3 waves down. Trade with the trend until it's broken.

Some other projection levels are 1188 and 1158 from the yearly high here.

It's been fast and I doubt most(nontraders) had a chance to go to cash/money markets/etc... It doesn't have to slow down. There's been no real recoil yet. By the time most decide to exit, it's too late.

Then again, a correction Friday,would give hope to the weekenders and 401k holders, if given the chance.

I know it's rambling thoughts but only what I thought of as I typed.
Just sharing fwiw.


Summertime.

sentimenttrader seems to agree with the possible Kools Tools analysis.."The most likely scenario, based on the kinds of extremes we're seeing and the magnitude of the price moves, is a 2 to 3 day relief rally, perhaps after an early dive lower and recovery on Friday. Then we get a re-test of that panic low, and subsequently head higher for the next 1 to 3 months." and also.."We respect the ominous technical condition of the market, which means rushing in to buying into falling prices may not be the most wise choice. If we do bottom somewhere around here, then there is typically a re-test during the next one or two weeks that creates a better buying opportunity for longer-term traders and investors, and that's the kind of opportunity to take advantage of the breadth and sentiment extremes that we'll be looking for."

Thanks, Kool, much appreciated.

prestwickdrive, if you are around, how would you treat that 1min bar that spiked down before the 8:30 data and then obviously moved up leaving a gap in data in between

do you take the low and high of that red bar prior to 8:30 (that is 1191.75 - 1202.25) ? if so, the market stopped right at its full projection of 219.25

thank you

Hi KB, Welcome back!. I was posting some Kools Tools driven price projections yesterday and tried to explain a little of the methodology, as I understand it. If you have time would you please review the Thursday ES posts and correct any errors in what I wrote should there be any? Much thanks.

Originally posted by ayn

prestwickdrive, if you are around, how would you treat that 1min bar that spiked down before the 8:30 data and then obviously moved up leaving a gap in data in between

do you take the low and high of that red bar prior to 8:30 (that is 1191.75 - 1202.25) ? if so, the market stopped right at its full projection of 219.25

thank you

ayn,

I am using two sets of projections off the jobs number. On the upside the move from 1191.75-1219.0 gives an initial projection of 1236.0 and a full of 1263.25. The retrace off of 1219.0 to 1207.25 gives an initial projection of 1200.00 and a full of 1188.25. A touch of 1191.75 negates the up projection and a touch of 1219 negates the down one.

got it, impressive nonetheless that the full projection of that red bar prior to the 8:30 data landed the current top of 219

Originally posted by prestwickdrive

Originally posted by ayn

prestwickdrive, if you are around, how would you treat that 1min bar that spiked down before the 8:30 data and then obviously moved up leaving a gap in data in between

do you take the low and high of that red bar prior to 8:30 (that is 1191.75 - 1202.25) ? if so, the market stopped right at its full projection of 219.25

thank you

ayn,

I am using two sets of projections off the jobs number. On the upside the move from 1191.75-1219.0 gives an initial projection of 1236.0 and a full of 1263.25. The retrace off of 1219.0 to 1207.25 gives an initial projection of 1200.00 and a full of 1188.25. A touch of 1191.75 negates the up projection and a touch of 1219 negates the down one.

Futures leading cash here at open

Originally posted by prestwickdrive

Originally posted by ayn

prestwickdrive, if you are around, how would you treat that 1min bar that spiked down before the 8:30 data and then obviously moved up leaving a gap in data in between

do you take the low and high of that red bar prior to 8:30 (that is 1191.75 - 1202.25) ? if so, the market stopped right at its full projection of 219.25

thank you

ayn,

I am using two sets of projections off the jobs number. On the upside the move from 1191.75-1219.0 gives an initial projection of 1236.0 and a full of 1263.25. The retrace off of 1219.0 to 1207.25 gives an initial projection of 1200.00 and a full of 1188.25. A touch of 1191.75 negates the up projection and a touch of 1219 negates the down one.

1263.25 and 1236.0 projections failed on touch of 1191.75. 1188.25 projection hit

Downgrade or no downgrade, the status quo is deplorable indeed... in the USA, Europe, Japan... a downgrade at this point is just a symbolic kick in the leg.