Best of the Week
Most Popular
1.How U.S. Dollar Destruction Threatens the Global Economy - Steve Forbes
2.Why UK House Prices Will Continue Rising - 'It's Immigration Stupid' - Nadeem_Walayat
3. Bitcoin Price at Beginning of a Move up? - Mike_McAra
4.Gold Price to Plunge, Visiting Fort Knox - David_Hague
5.Silver Price Forecast - Metal to Gain Ground in August on These Factors - Jim Bach
6.Gold And Silver Will Rise With US Dollar Demise, Just Not Soon - Michael_Noonan
7.Bitcoin Price Strong Move Possible - Mike_McAra
8.Israel Gaza War Crimes - Soldier's Ordered to Shoot Civilians Including Children - C4News - C4News
9.UK House Prices Crash Warning - Daily Mail Cognitive Dissonance - Nadeem_Walayat
10.UK House Prices Boom - Top Quick Cheap Tips to Help Sell Your Home - Nadeem_Walayat
Last 5 days
President Obama Strongest Statement Yet on Israel Gaza War - 20th Aug 14
Peak Gold? Russia To Surpass Australia As World No 2 Gold Producer - 20th Aug 14
AI, Robotics, and the Future of Jobs - 20th Aug 14
Stock Market Investors What's Your Exit? - 20th Aug 14
The Gold War - Thinker, Trader, Holder, Why? - 20th Aug 14
Ukraine Interest Rates Soars to 17.5% As External Debt Cannot be Repaid - 20th Aug 14
Rising Interest Rates and The End of Stimuland - 20th Aug 14
Inflation Watch: $245,000 to Raise a Child in United States - 20th Aug 14
Inside the Stunning Deal That Put Apple and IBM on the Same Side - 20th Aug 14
The US Gold in Fort Knox is Secure, Gone, or Irrelevant? - 19th Aug 14
Bitcoin Price On The Brink of a Possible Reversal - 19th Aug 14
Why Tesla Stock Price Will Double in the Next 12 Months - 19th Aug 14
Europe's Economic Malaise: The New Normal? - 19th Aug 14
The Coming U.S. Economic Collapse Will Trigger a Revolution - 19th Aug 14
Market Bubbles, Bubbles Everywhere - 19th Aug 14
This is Your Economic Recovery With and Without Drugs - 19th Aug 14
Stock Market Strong Start to Jackson Hole Week - 19th Aug 14
Iraq, Ukraine - Oh, What A Tangled Mess We Weave - 19th Aug 14
How to Apply Moving Averages as a Trading Tool - Video - 18th Aug 14
Why Short Stock Traders Are Losing Money This Week - 18th Aug 14
Stock Market Rally May be Complete - 18th Aug 14
Why Chinese Citizens Invest In Gold - 18th Aug 14
Palladium Reaches 13-Year High Over $900 oz as Gold Trading Volumes Surge 66% - 18th Aug 14
Understand and Profit from Surging European Volatility - 18th Aug 14
No Escape from The Dollar as The Currency Standard - 18th Aug 14
Stock Market New Highs Less Certain - 18th Aug 14
German Stock Market DAX About To Drop - 18th Aug 14
Stay on Board - Stock Market Big Picture - 18th Aug 14
Europe Economy Is Tanking, QE Is Coming - 18th Aug 14
Are You Ready for The Greatest Technology Revolution Yet? - 17th Aug 14
Why King Coal is Bigger than Oil or Gas - 17th Aug 14
U.S. Empire of Death and Lies - 17th Aug 14
Ukraine - Whose Spin Are We Caught Up In Here? - 17th Aug 14
Time Decay And No Escape For Abenomics - 17th Aug 14
India BSE SENSEX The Party Is Over In Bombay - 17th Aug 14
Stock Market Uptrend Looks Underway - 17th Aug 14
The Key Role Of Conspiracy Theory In Dumbing Down Society - 17th Aug 14
The Federal Reserve in Denial Mode - Bond Market Explained - 17th Aug 14
Stock Market Ukraine-Triggered Volatility, But a Flat Finish - 16th Aug 14
Stock Market Investors Conditioned To Catch The Falling Knife - 16th Aug 14
Decline And Fall Of The CO2 Crisis - 16th Aug 14
Gold Stocks Major New Upleg - 15th Aug 14
Don’t Assume What Is “Unseen” Doesn’t Exist - 15th Aug 14
HUI, Gold and Silver; Fun With Monthly Charts - 15th Aug 14
Cry for Argentina: Fiscal Mismanagement or Pillage? - 15th Aug 14
New 'LBMA Silver Price' - Still Not Transparent - 15th Aug 14
America the Neighborhood Bully Recklessly Throws its Weight Around - 15th Aug 14
The Single Best Investment for the Semiconductor Tek Stock Boom - 15th Aug 14
The Something For Nothing Society - Inflation and Getting Paid NOT to Work - 15th Aug 14
Forecasting Ability of the Elliott Wave Principle - Trader Education - 15th Aug 14
The Most Hated Stocks Bull Market - 15th Aug 14 - Puru_Saxena
America's First Oil Sands Producer and Other Natural Resources Surprises - 15th Aug 14
Life and Times in Propagandistan - 15th Aug 14
The Biggest Lesson from Microsoft’s Recent Battle with the US Government - 15th Aug 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Biggest lie in Stock Market History Revealed

NDX, S&P 500 Trading, Exciting Options Expiry Week

Stock-Markets / Stock Index Trading Jan 17, 2010 - 02:22 PM GMT

By: Piazzi

Stock-Markets

Best Financial Markets Analysis ArticleWhat a week!

This was one of most exciting OpEx weeks that I remember for months – all sorts of crazy price actions on and off hours.


The week had some real curve balls. It’s been bandied about that the bond auction weeks are manipulated lower so that bonds can sell better, well, Thursday was 30-yr bond auction day and any trader who went against the market hoping downward manipulation got it handed to him on that day. It’s a popular belief that an uptrending market roars on higher in an OpEx week. Anybody who banked on that got chopped up and down for the entire week.


S&P had a price range of 20 points for the week but ended -8 points – basically flat. NDX did more poorly and ended -28 points out of weekly range of 45 points - no bullish bias for statistical traders.

We stayed more with our price levels than statistically shaped popular beliefs.

For NDX, I had specified resistance at 1890+

NDX tried a number of times to get past resistance but was rejected each time.

Notice that RSI is at a level that has provided a support shelf for short term momentum since mid-November. Price is sitting on 21 EMA, which has held every pullback since November.

Also notice that MACD did a cross, and RSI, after carryover rally from last year, could have not been able to make it past 70.

For the week, NDX had a number of down days on expanding volume.

If it wants to blast higher from here it should do soon. Further weakness may cause enough damage to the weekly technicals to change trader’s psyche from rally to correction, and, where the psyche turns, price follows.

So, the 1890+ level of NDX offered excellent short entry to traders all week

I had also specified a number of actionary levels for NDX, namely, 1886, 1867, 1850

The actionary levels did well, especially the lower 1850 area that held the drops and offered good long (short cover) entry for trading purposes.

NDX is not broken, but looks wounded. We may have a top, or it may be just setting up for a 5th wave. A sustained move below 1850 will increase the odds of top being in, targeting 1810 area as a first level of support. I810, by the way, coincides with 55 daily EMA at this time. A move and hold above 1890 may fetch a sizeable short-covering rally.

NDX breadth, as measured by McClellan set of oscillators looks soft and in need of urgent reinforcement i.e. money to bid things up

In the Wednesday’s post, I had said

OpEx week is not over yet. But I find it hard to believe there are many shorts still in the system. If not, then either buyers bid it up on their own, or market finds a price and then drift sideways into expiration.

In Thursday’s post I said

I guess bulls ran out of shorts to ride up today.

Friday’s action was in line with our way of thinking about short-squeeze rallies.

Well, there must be quite a few shorts in the system now. Looking back at 60-min chart, and the Arms Index, NDX is oversold enough to fetch, at least, a bounce early next week if the uptrend is still good and healthy. That may happen after some residual selling. So, I’ll keep an eye on 1850 area (give or take a few points) and see if index holds it for a bounce, and if so, we’ll see if 1890 craters or not.

----------------------------------------------
S&P had a flat week

Overall, it’s been less volatile than NDX. It’s been holding well, so far, after breaking above the 2007 downtrend line

Index had two distribution days last week. It is sitting on an uptrend line from March 2009, and on its 21 EMA that has provided support since mid-December.

S&P’s breadth as measured by McClellan group of oscillators look neutral

Short term frame is quite oversold

Index is inside the 1133 pivot area, and supported by 89 EMA of 60 min frame. As long as 1133 pivot area is not broken, index has a chance of gathering itself and doing a bounce. A break of 1133 pivot will target next pivot at 1107. A break below 1133 pivot area will likely turn the short term trend down. A break below 1107 pivot area will increase the odds for a change in mid-term trend.

To the upside, we have the 1168 pivot and my range target of 1185. S&P’s performance after the range break has been very disappointing in the sense that it could not reach the range’s first target (NDX got there with no problem).

I have two trend lines (in pink) which I think are important in the hours and days ahead. They, coincidentally, provide immediate support around 1133 and 1107 which we just discussed.

I may trade the levels I just discussed on S&P and NDX, but, at this moment, I have no desire to establish a long index position to hold.

Long term trend is up. Mid-term trend is up. Short term trend is up (a break below 1133 may change that)

Support is at 1133. Resistance is at 1168.

Enjoy the Rest of Your Weekend!

By Piazzi

http://markettime.blogspot.com/

I am a self taught market participant with more than 12 years of managing my own money. My main approach is to study macro level conditions affecting the markets, and then use technical analysis to either find opportunities or stay out of trouble. Staying out of trouble (a.k.a Loss) is more important to me than making profits. In addition to my self studies of the markets, I have studied Objective Elliott Wave (OEW) under tutorship of Tony Caldaro.

© 2010 Copyright Piazzi - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014