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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 - Higher...But How High? Could Be A Little, Could Be A Lot. 0 comments
    Apr 26, 2011 12:20 AM

    Monday Evening  25 April 2011

     Back on 13 April, we were looking for a potential turning point,
    and in fact went short, for a short period of time.  [See S & P -
    At A Turning Point?
    , click on http://bit.ly/hsgGjh3].  Half the short
    position had been covered, and the other half was covered next
    day when price did not have downside follow-through.  There was
    a turning point, but it was to have the market turn back to the
    upside, and that brings us to the present tense.

     The top horizontal line represents the high when March was the
    lead contract back in February.  [See S & P - What Is In A Name? ,
    click on bit.lyhoQkq0, first paragraph after first chart].  The current June contract has returned to its previous highs, February
    and a few weeks ago.  It is apparent that after a strong three day
    rally, price has stalled with small ranges and declining volume at
    the area of obvious resistance.  The last bar is the Monday evening
    session going into Tuesday, so Monday's bar, second from the end,
    shows yet again a lack of demand, and also a lack of selling that
    would extend the range lower.

     The longer price hangs around resistance, as opposed to moving
    down and away from it, the greater the likelihood it will be broken. 
    There is a minor conflict in reading the developing market activity
    up here.  On the plus side, price is starting to consolidate, holding
    at the upper end of the rally, instead of correcting a bit lower. The
    former is a greater sign of strength.

     On the negative side, and not too negative, price is beginning to
    cluster around 1330.  When price begins to cluster, it can turn into
    a turning point.   The reason why this is not too negative is that we
    are only looking at two days, and price could be engaging in a
    resting spell, just prior to going higher.  As was stated in "What Is
    In A Name? article, the weekly chart shows a greater momentum
    for new highs, based on the OKRs mentioned.

     A new high could be brief, as in a failed probe that reverses, or a
    new high on strength that could resume the uptrend to the 1350 +/-
    area, to as much as 1441, a retest of the January 2008 high that
    also led to the March low at 665.   However improbable it may seem,
    given the lack of strong up bars and strong volume on rallys, the
    improbable may become likely, absent the failed probe potential.

     Waiting for clarity.

     

    S&P D 25 Apr 11

    Themes: SnP, SPY, QQQQ, Dow
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