Will the SPX follow thru??

Comments:

1. The tendency of this market lately is to rally, and then fall back as profit takers grab some quick gains. The action today reflects some of that. If we don't retrace most of yesterday's gains, then we may be headed higher. Earnings, on balance, have not been that bad this quarter - mostly the financials dragging things down, and that seems to have bottomed somewhat.
   
   Skittishness seems also to cause a drop prior to weekends.
   
   But to address your thousand dollar question, I think it unlikely that we will close higher today.
   
   My guess, based on recent patterns, a drop today, up tomorrow, down Friday.
   
   Vern      by VTallman
   
2. It's looking to me - especially on your chart - like a textbook ascending triangle. If I had to bet (and I guess I am, on a limited scale), I'd favor the odds of a break to the upside in the relatively near future - if we don't suffer another Indymac / Bear Stearns style surprise.      by Coyote
   
3. Mojo, why would you call the MACD useless? What i see in that chart is an ascending triangle and divergence in the MACD and price.. I see an effort to break above, is going to take some more convincing. I may be wrong so this is why im gonna sit on the sidelines until the picture is a little more clear to me.
   
   Nate N2M      by Nate N2M
   
4. There is no denying the ascending triangle as pointed out by others. I, too, would not be surprised to see a breakout, but I am concerned it won't have legs, and indeed will draw in bulls for a bull trap. This is why.
   
   I am a believer in the monthly pivot points as major support and resistance levels. The price is likely to be drawn to the upper resistance point, but not spend much time (if any) above it. You'll see support broken much more often in a major down move than see resistance broken on the way up. (See chart below). A breakout will draw in bullish traders hungry for a chance to make some money, and it will be no more than a trap.
   
   I don't trust "V" shaped bottoms (I know, the Russel and Dow are not really "V"). The SPX is especially hindered by having so many financials in it, and one of the best trades all year has been fading any up move in the financials.
   We have some serious down left in this market (I think).
   
   Heck, I am probably all wet on this, plus I don't really trust fortune telling (technical analysis) any more than I trust V-shaped bottoms. You are probably exactly right in your analysis. My greatest challenge in trading is trading what I see and not trading what I think is going to happen.
   
   Darkdoc      by darkdoc
   
5. Whoops.
   
   I hate to even say this now, but S&P futures are down 5.75 And the Dow down 54.00.
   
   This speaks for a gap down in the morning. This is just so typical right now.
   
   Whatever you do, trade safe.
   
   Darkdoc      by darkdoc
   
6. Nate N2M -
   
   I was having a discussion with some other traders about how long an indicator can stay oversold / overbought or suck people into to buying or selling at the worst times.
   
   From my personal experience I feel like that too little emphasis is given to the price and too much emphasis is giving to the indicators.
   
   Thanks for the comments!
   
   Mojo      by Mojo
   
7. Darkdoc -
   
   How to the Person's pivots work in your image? What do the different colors represent?
   
   Thanks,
   
   Mojo      by Mojo
   
8. Right now my focused strategies are calendars and ICs. I also see SPX going side ways. I placed a double calendar around 1200 / 1300. this is where the trade zone indicates (fib retrace). Interesting enough, John person's pivot is showing more or less the same range.
   
   looks like I am doing the sep / sep (quarterly)
   
   ej      by ejliu
   
9. That's why I love these forums.
   
   There's always more ways of looking at things.
   
   I'm not worried about today's drop (maybe I should be?). But I am not expecting huge gains in the S&P in the short to intermediate term. Not until the financials start having some good news instead of "bad, but not bad enough for us to start jumping out of the windows" news. The drop in oil prices (I expected the bounce yesterday - we got it today) is also helping, I think.
   
   But have we seen the bottom? I wouldn't bet even money on it.      by Coyote
   
10. Quote:

    Originally Posted by Mojo Nate N2M - I was having a discussion with some other traders about how long an indicator can stay oversold / overbought or suck people into to buying or selling at the worst times. Mojo

    I do agree with that      by Nate N2M
    
11. Quote:

    Originally Posted by Mojo Darkdoc - How to the Person's pivots work in your image? What do the different colors represent? Thanks, Mojo

    These are the thinkorswim Person's Pivots set to "monthly" instead of the default "daily". They are supplied with the TOS Charts.
    
    The central blue line represents the calculated pivot. This is the "High + Low + Close divided by 3" calculation based on the previous month. Just a normal pivot calculation, but for the month rather than for a single day. TOS also does weekly ones.
    
    The upper red line represents resistance point #1 (R1). The lower green line represents support point #1 (S1). They are calculated off of the central pivot point number, and you can also calculate resistance and support points #2 (R2 and S2), although they are not usually used in monthly pivots. If you Google "pivot points", you will see the standard calculations that are used. They are pretty simple.
    
    Red = Resistance (major)
    Blue = Pivot
    Green = Support (major)
    
    They work like any normal support and resistance line that you have ever used. They are amazingly reliable in my experience. Between these and linear regression, I get the best answers to projected highs and lows, and turnng points, of any technical analysis that I use. And they are fractal - they are good when calculated in just about all time frames from minutes to months.
    
    I like to use daily and weekly pivots to help with entry and exit points on my trades. For daily and weekly, I use the #2 levels as well.      by darkdoc
    
12. That's a great explanation and wonderful tool. Thanks for sharing!
    
    Mojo      by Mojo
    
13. Interesting I havent seen persons pivot before. Could you use these monthly persons pivots as a guide for putting for example and iron condor as assessing support and resistance levels?
    
    Thanks
    
    OTM      by optiontraderman
    
14. Quote:

    Originally Posted by optiontraderman Interesting I havent seen persons pivot before. Could you use these monthly persons pivots as a guide for putting for example and iron condor as assessing support and resistance levels? Thanks OTM

    OTM,
    
    I use them as major support and resistance primarily. They supplement and add to your other applications of support and resistance such as that that you might see with fibonacci, or any other ways that traders determine support and resistance.
    
    In that sense, I use them to look at where prices will both be drawn to and also be reversed at. I don't use them for placing wings of a condor, though I suppose there is no reason why you couldn't (short term, though). They can be pretty good for suggesting where prices are going to be contained for the month, but of course, next month will be different and condors usually extend across months. It helps sometimes to see where next months prices are in range.
    
    Darkdoc      by darkdoc
    
15. Boy was I off about my analysis. I added another Calendar today, SEP/SEP05 1350. my new break even is 1205 / 1363. I serious doubt it will go to 1360. Now I said it. I think it's going to 1360 next.
    
    ejliu      by ejliu
    
16. It looks like it might be breaking down as of today. Lucky me, I got out of my bull spread on SPY on Friday.      by Coyote
    
17. Friday was the last exit bef. the diving lesson. Good one Coyote.
    
    Interestingly the ImpVol. has decreased further. My position is underwater whichever it goes. With SPX currently at 1267 & my breakeven at 1202/1362 Guess I'll ride it out till expiration.
    
    ejliu      by ejliu
    
18. I guess I was wrong about the move higher. These last two days have been pretty nasty.
    
    I do appreciate the higher IV that's coming in. I'm using this adjust and add to my Sept IC on RUT. Much better credits!
    
    
    Mojo      by Mojo