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  • Twisted Rays Of Hopes And Despairs 2 comments
    Jul 11, 2012 5:55 PM

    Since the last Instablog; the stock markets went into multiple whipsaws for many traders with this chart as the guide as of June 20:

    - g13.picoodle.com/ltd/img13/5/6/19/aarc/f...

    Today, another Ray of Hope is at hand for aggressive traders:

    - img15.imagefra.me/i57b/aarc/141u_ba8_ubk...

    The 1333 to 1335 area could be considered as viable confluence of supports for those who are trying to find high-probability entry level while SnP500 is still trading near the 50% Fibonacci Level of the 1266.74 to 1422.38 Trading Range. It consist of the up-trendline; the 50ma; the 61.8% Fibo Retrace of the last run up; the horizontoal blue line that practically touches 3 price points from left to right - left not shown; and the 38.2% Fibo Retrace of the whole run up from the 1266.74 bottom (last one not shown to reduce clutter).

    On the Intraday Chart (for the Bulls):

    - img13.imagefra.me/i57b/aarc/141u_3ef_ubk...

    I bought ES and YM today using the potential Divergence Buy Signal (before it triggered) and the 127.2% to 138.2% Fibor Extension Reversal Levels (while SnP500 was testing those levels).

    For those who wanted to chase a potential rally. There are several Trading Strategies that can be employed after the initial bounce:

    1. Wait for a Potential Inverted Head and Shoulders to form with 1336.27 as possible Right Shoulder Support;

    2. Use a breakout above the potential Neckline Resistance of 1345 as an entry;

    3. Use a breakout above the Violet Down-Trendline Resistance as entry - ONLY IF Spx is able to make the breakout in less than half the time it took the A-B-C patttern to form from today's bottom;

    4. Wait for a 1-2-3-4-5 rally to happen on the 5min chart then wait again for a slow-grinding A-B-C down to buy for those with patience to monitor intraday charts. Don't buy if Spx goes down very fast after forming a 1-2-3-4-5 run up on 5min chart. As of now, the pattern is a potential 1-2-3 with 4 and 5 to follow. But reduce expectations since over-night price actions of Futures can easily distort the pattern at the CASH open tomorrow; or

    5. Buy above today's high tomorrow if a breakout happens - for those who prefer to use the daily chart.

    A breakdown below today's low is naturally the SOP Hard Stop Loss since a Spiral Meltdown could start forming if that happens. Use Trailing Stops if a rally actually happens since SnP500 is still in a very whipsaw territory. Hold on tight to your positions if SnP500 is able to break hard above the 1370 Major Resistance. Next Major Resistance is 1451 on a break above 1422.

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Comments (2)
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  • Billy Smithee
    , contributor
    Comments (12) | Send Message
     
    Hi, thanks for your instablog and comments. I've been following for a while now, and while some of the technical stuff goes right over my head, I always learn something. I also like your firm grasp of history as it relates to the markets. Keep blogging and commenting and I will keep reading!
    Best regards,
    Ken
    11 Jul 2012, 10:27 PM Reply Like
  • Billy Smithee
    , contributor
    Comments (12) | Send Message
     
    Hi, thanks for your instablog and comments. I've been following for awhile now and some of the technical stuff goes over my head, but I always learn something. I also like your firm grasp of history as it relates to the markets. Keep blogging and commenting and I will keep reading!
    Best regards,
    Ken
    11 Jul 2012, 10:28 PM Reply Like
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