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Pre-market 08/11/2010

IWM/$RUT PnF pre-market has decisively lost both the 30 minute and long term potential support area of 64.25, currently trading at circa 63.32. On the 30 minute PnF, the next potential support area is 62.80 – 62.40 area, which is another 1.5% lower from here. That would take a lot of honkin’ selling to make it in one day…but the Wednesday prior to OPEX often sees volatility spikes.

The Aug 2 gap on SPY has been filled pre-market. The $SPX 20 SMA is 1104.26 and the 50 SMA is 1087.59, with the long term PnF potential support between the two at the 1093 area. My guess is we may overshoot the 1093 area to go down to probe the July 30 price range. It held above 1093 on light volume for seven trading days.

I’ll be watching the volume on downdrafts and bounces from here. Most likely, I’ll be adding to my shorts via TWM on bounces back up toward 64.25.

My $0.02, only.

Good luck today, everyone. CH

Hi Everyone,

I hope some of you caught the reversal area I sent you on Sunday. Fortunately, I did. J
Those levels are all still in play. www.flickr.com/photos/8258970@N03

Sorry I don’t have time now for more elaboration; I’m super busy with a government compliance deadline at my business.

My work with PnF, SMAs, gaps, volume/price, breadth, sentiment and seasonality is indicating:
If we close above SPX 1078.48, there is high probability the SPX climbs back to the SPY 109.33 area (SPX 1093) at which point there is good probability of a normal selling reversal at this major PnF potential support/resistance level. It may achieve the 20 SMA at 1096.47, though.

If the selling is contained to a 3 box selling reversal, there is good probability of filling the May 20 gap at 111.76.

My aggressive growth account is 60% long and the market timing account is 40% long, with all hedges taken off Tuesday.

No one knows the future, least of all me. My best guess, only.

Best regards and good luck,
CH

Click on the chart, then click on the zoom magnifier icon above.

SPY Price and Volume Analysis, Very Short Term To Swing

SPY
Good Probability Very Short Term Reversal = 106.05 area (105.88 to 106.21)
Good Probability Short Term Reversal Short Term Reversal = 104.40 area (104.24 to 104.56)
Good Probability Swing Reversal = 104.00 area (103.48 to 104.56).

Good Probability Very Short Term Sell = 109.33 area (109.17 to 109.49)
Good Probability Short Term Sell =110.71 to 111.18
Good Probability Swing Sell = 115.85 area (115.22 to 116.33)

This analysis is based on Price and Volume only.

With the very negative breadth and sentiment indicators, the market either collapses (very low odds, but it happened in 1987) or reverses strong in my opinion.

My current bias is on the long side. I am scaling in against the ST trend, hedging positions at loss of key potential support/resistance levels. Watch the volume very carefully at the levels mentioned above.

Good luck. CH

Click on the chart, then click on the zoom magnifier icon above the chart.

Very near term the 5 min PnF does NOT show the bears “in control.”

Longer term $spx needs to regain the major confluence area we are presently in (10 SMA=1083.81, 600 SMA=1088.59, Major PNF potential support/resistance are 1093) and if so, will again most test the 200 SMA at 1105.56.

The 10 day ma tick on NYSE closed at the lowest since March 5, 2009.

Trin figures are flashing very oversold.

Day traders’ fatigue = the market carves and gobbles ‘em up on a daily basis.

Good luck, CH