ES 09-26-2008

The ES is now at the crossroads. You will recall that in the ES 09-22-2008 video, I articulated the view that I was looking for a 13-week line change (i.e. a correction of a quarterly trend magnitude). I also said that because I considered the low of October 18 to be a ‘spike’ low, I believed the retest to be one that would hold above 1157.

In last night’s trading the market came to my ideal level for the retest and provided a contraction setup:

  • 1-day swing (5-period 80 minutes swing) shows possible spring change in trend to the upside.
  • The 1173 to 1178 range falls within the ideal statistical time and price window for a buy.
  • There is MIDAS support coming through. The maximum retracement for MIDAS comes in at 1171.
  • There are price ratios coming it at 1183 to 1174.
  • The statistical time window has support from Jeff Greenblatt’s Fibonacci and Lucas time counts.
  • In Figure 1, the Delta Chart, note the decrease in total volume for today but increase in buying Delta volume – this is bullish provided we see follow-through buying today.
  • Figure 1 also shows the Market Profile. We have a Neutral Day closing in the middle quadrant. Known as a test day, a break above the high of the day will augur a short-term uptrend; a break below the low of September 24 will augur a short-term downtrend.

Given the above, we have zones and setups for the 1-day swing timeframe trader(my trader’s timeframe trend is still down, so I’ll pass on this long trade) buy signal. I’ll follow-up with a comment just before tonight’s open.

If the market accepts below September 18 low, I expect a directional downmove to begin and the seasonal pattern to invert.


FIGURE 1 Market Delta & Market Profile

1 thought on “ES 09-26-2008”

  1. Ray

    President Bush’s own party remained at odds with his $700 billion banking bailout. In jittery trading, stocks capped off the week relatively unchanged: the NASDAQ 100 was lower by 0.92%. S&P 500 advanced 0.34% and the Dow gained 1.1% on Friday.

    The markets were braced for the take over of WaMu, the nation’s largest thrift bank with over $300 billion in assets , taken over by JPMorgan for $1.9 billion. The markets seemed thrilled by the move and JPMorgan’s stock rose $4.78 or 11 percent to $48.24.

    What could play out are large declines followed by some retracements and slightly positive finishes.

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