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Thursday, November 26, 2009


23:15 PST
While the USA spent the day away from the markets we had a breath taking day in the USD and the /ES. Considering that the markets were closed in the US this drop comes with a significant amount of Volume.

First chart below is an Hourly chart of the /ES. Clearly a five wave move to the support level I mentioned early this morning. There are two Andrews Pitchforks in this chart. The small fork is steep and contained within the larger fork. The market has ventured past the 100% line and appears to be ready to turn at the 150% line of the larger fork.

The chart directly below this chart shows a new Andrews Pitchfork (blue). Notice how it too lines up well with the change points. Within the next few days we should be able to determine which fork to keep.

This next chart is the Daily Ichimoku. Notice how the Kumo and the Kijun-sen have offered support.

The Bears have gained control, clearly breaking below the trend line from March (purple) and out of the trading range that has contained this market for the best part of November. Now they must break the trend line from July (Yellow).

I'm looking for a retracement off this low to the center line of the larger fork. This correction may help us determine which fork will prevail.

08:15 PST

Weekly /ES

Daily /ES

Hourly ES

All my indicators have turned Bearish.
Price below the Kumo, and a Tenkan-sen/Kijun-sen cross have turned the M60 Ichimoku chart bearish.
MoneySpy has slipped below the Buy/Sell line
The Upward Pitchfork has been violated, and a new downward Andrews Pitchfork has been established.

The last remaining hurtles are the trend line from July, and the trading range between 1112 and 1082 which remains unbroken.

On Tuesday I said that if the market were to go down it would most likely be on Friday morning where the Kumo makes a Bearish transition on the Hourly SPX chart . We will have to see how that works out, but as it stands it appears that a large gap down can be expected tomorrow morning.

We are currently at the bottom of what I believe is a well placed Pitchfork. I base that on the way the center line meets the change points. I expect the market to trade within this fork and recover to the center line.

We are once again trading below the March trend line. I expect we will oscillate near this upward trend line, and if the Pitchfork holds through Monday the Bears will take control and show their might once again.
The Daily Kumo and the Kijun-sen will first offer support near 1070 and then near 1040 where the flat Kumo will offer another level of support. Should these levels be broken the Weekly Kumo will offer support near 1020.

I still don't have a good EW count to base any further forecast on, but chances are P3 has begun. For now I'll continue to play by the short term indicators that have been serving me so well.

Analysis presented on this Blog has only informational, and educational purpose, and does not represent a proposal for buying or selling currency contracts.

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