Best of the Week
Most Popular
1.Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - Nadeem_Walayat
2.Gold and Silver Stocks Apocalypse Now, Bear Market Review - Rambus_Chartology
3.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
4.Ebola Terror Threat Suicide Bio-Weapons Threatens Multiple 9/11's, Global Plague - Nadeem_Walayat
5.Second-Richest Man Says Mortgages Now a "No Brainer" - Dr. Steve Sjuggerud
6.Gold And Silver Still No End In Sight - Michael_Noonan
7.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
8.The Gold Bug is Set to Bite Back - EWI
9.How Alibaba Could Capitalize on the EBay-PayPal Split - Frank_Holmes
10.The Consequences of the Economic Peace - John_Mauldin
Last 5 days
Tesco Meltdown Debt Default Risk Could Trigger a Financial Crisis in Early 2015 - 24th Oct 14
Saudi Move to Cut Oil Prices Is Now Russia's Biggest Economic Threat - 24th Oct 14
US Stock Market Top Is Now In Sight - 24th Oct 14
New Profit Points in the Shifting Balance of Power, Welcome to Saudi America - 24th Oct 14
QE Failure & Folly Of Paper Mache, Treasury Bond Integrated Lifeline Patches - 24th Oct 14
U.S. Economy Faltering Momentum, Debt and Asset Bubbles - 23rd Oct 14
Annuities - Afraid Your Money Will Vanish before You Do? - 23rd Oct 14
What Debt Deleveraging? - 23rd Oct 14
How to Profit from Massive Spin-Offs with Just One Play - 23rd Oct 14
Evaluating Ebola as a Biological Weapon - 23rd Oct 14
Euro, USD, Gold and Stocks According to Chartology - 23rd Oct 14
Why You Should Always Be Invested in the Stock Market (Even Now) - 23rd Oct 14
Five U.S. Housing Market Warning Signs Point to Real Estate Market Downturn - 23rd Oct 14
The Better Short: Gold or Silver? - 23rd Oct 14
Focus on Graphite Companies with Green Energy and Technology Strategies - 22nd Oct 14
Crude Oil Price Hitting Bottom - 22nd Oct 14
Evidence of Another Even More Sweeping U.S. Housing Market Bust Already Starting to Appear - 22nd Oct 14
Gold Or Crushing Paper Debt Stocks Crash? - 22nd Oct 14
India Gold Demand Surges 450% and Bank of Russia Demand At 15 Year High - 22nd Oct 14
Bitcoin Stock Exchange Could Be "More Valuable than Alibaba" - 22nd Oct 14
Currency War - How to Profit from a Stronger U.S. Dollar - 22nd Oct 14
Banks Hold Treasuries and Make Loans- 22nd Oct 14
Gold and Silver Timing is Everything - 22nd Oct 14
Don't Get Ruined by These 10 Popular Investment Myths (Part VII) - 22nd Oct 14
Follow the Baby Boom to Biotech Stock Profits - 22nd Oct 14
Copper, Nickel and Zinc Won't Be Cheap for Long - 22nd Oct 14
How Will We Know That the Gold & Silver Price Bottom Is In? - 21st Oct 14
Is Gold as Dead as Florida Hurricanes? - 21st Oct 14
First Swiss Gold Poll Shows Pro-Gold Side In Lead At 45% - 21st Oct 14
The Similarities Between Germany and China - 21st Oct 14
The REAL Reason Why the Stock Market Turned Down - 21st Oct 14
Petrobras is a 'Scheme, Not a Stock' - 21st Oct 14
Stocks Bear Market Indicator Is Off the Mark - 20th Oct 14
Stock Market Ideal Turning Point is at Hand - 20th Oct 14
Investors Quit Complaining, The Environment is Perfect Right Now - 20th Oct 14
Ebola Armageddon Could Trigger a Rebirth in Gold and Silver Prices - 20th Oct 14
Gold vs Euro Risk Due To Possible Return of Italian Lira - Drachmas, Escudos, Pesetas and Punts? - 20th Oct 14
Stocks Rebounded Following Recent Sell-Off, But Will It Last? - 20th Oct 14
U.S. Responsible for West Africa Ebola Outbreak Says Liberian Scientist - 20th Oct 14
Stock Market Intermediate B Wave has Started - 20th Oct 14
Gold Stocks Analysis – FNV, CG, NCM, SBM - 19th Oct 14
Stock Market Primary IV Wave Counter Trend Rally - 19th Oct 14
Gold And Silver - Financial World: House Of Cards Built On Sand - 18th Oct 14
Anatomy of a Stock Market Sell-Off - 18th Oct 14
Why OPEC Has Declared an Oil War on Russia - 18th Oct 14
Gold and Silver Extreme Shorting Peaks - 18th Oct 14
Bitcoin Price Fall to $350? - 18th Oct 14
Tesco Supermarket Crisis Worse To Come as Customers Vanish! - 18th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

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