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Michael Noonan Edge Trader Plus Michael Noonan is the driving force behind Edge Trader Plus. He has been in the futures business for 30 years, functioning primarily in an individual capacity. He was the research analyst for the largest investment banker in the South, at one time, and he... More
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  • S & P - At A Market Turn? Waiting For Confirmation. 0 comments
    Apr 13, 2011 10:23 PM

    Wednesday Evening  13 April 2011

     The numbers on the chart show how many days the market has
    corrected since the March low.  In a strong up trend, first degree
    corrections last one to four days.  Tuesday's low was minor
    relative to the previous day, just 50 tics, but it did become the
    fifth lower low since the recent high, and the volume has been
    greater on this decline, as well.

     There are two horizontal lines to define resistance and support
    areas: starting at 1320 for resistance to 1300 as support.  Both
    are areas and price can exceed either by an acceptable amount
    while still keeping their integrity.

     The Monday break under the 1320 area can be significant. 
    Friday's close, third bar from the end, was the lowest within the
    previous eight day trading range, erasing the effort to go to new
    highs, and volume increased on the decline.  The mid-range to
    low end closes of the last 10 trading days shows sellers to be in
    control.  These are not compelling factors that shout "market turn,"
    but they are the existing facts that must be recognized and dealt
    with, accordingly.

     After a five day decline, the market could be due for a technical
    correction.  The net down progress on Tuesday supports this notion. 
    This is not to say Wednesday can be lower and close lower; rather,
    it is just something of which to be aware.  One will have to wait for
    the close on Wednesday to know that.

     We took a short position on Monday, and half was covered on
    Tuesday, at a small profit, just in case there is a reaction rally. 
    What is critical to watch from here on is the character of any rally. 
    Tuesday's rally failed right after the opening, as price worked lower
    throughout the day, a sign of weakness and sellers in control.

     If the next rally has smaller ranges and less volume, and  it stops
    at or below a 50% retracement, that will be an important message
    that the 1300 - 1295 support will not hold.  If that turns out to be
    the case, the next objective will be the 1240+ area, the mid-March
    lows.

     One phase at a time.

     

    S&P D 13 Apr 11

    Themes: SnP, SPY, QQQQ, Dow
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