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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 - Review The Known Facts. They Often Clarify Direction.

    Tuesday Evening 15 June 2010

     Just when it looked like the trading range was alive and well after
    Monday's failed rally at the high end  of the range, and the poor
    close suggested further weakness into Tuesday, price reversed
    course and embarked on a  steady rally into new recent high

     What do we now know?  We know we have to be flexible, at all times. 
    What was expected as a retest lower became a turnaround.  The rally
    was the fifth day with a strong close.   This is the first time for a five 
    day counter-trend rally.  Normally, counter-trend rallies last 1 to 4
    days, so today marks a change of behavior to the plus side, for now. 
    The close is the highest for the month of June and the highest for the
    past four weeks, another plus to the upside.

     Look at the weak close from Monday, second to last full bar, and the
    weak close three more bars earlier.  Twice, price closed weakly, and
    twice, price failed to go lower, but reversed and made impressive
    rallies.  All of these gathered facts tell us not to be short, which of
    course, we were not.  We were long going into the high of the range
    on Monday, but accepted profits prior to the turnaround and the lower
    end close.

     The momentum has shifted.  Just a day earlier, it looked like the intra
    day trend was to turn down.  The current rally can run into resistance
    at the 1020 area, not too far from Tuesday's close.  1020 is the close
    from the 6 May huge decline day and also the high of a small bar day
    that led to another sharp drop in mid-May.

     What do we not know?  We do not know for how long this rally will

     Mention was made that the kind of volatility the market was showing is often a form of distribution, selling by strong hands into weaker buyers
    who are late comers.  [See S & P - The Message Of The Market Is
    , click on, fifth paragraph].  What will be key
    from this point on is follow-though. 

     If the rally is to continue, we need to see increased volume on rally
    bars with upper range closes.  This will tell us that buyers remain in
    control.  If that does not happen, caution is warranted for longs.  If
    any decline is controlled with smaller ranges and less volume than
    the rallies, it may be a buying opportunity.  Should any decline
    develop with wide range bars and increasing volume, it could be
    problematic for the upside.

     Is there a clear direction to recommend?  No, at least not until
    developing market activity shows HOW the then direction is unfolding. 
    Nothing can be taken for granted.

    S&P D 15 Jun 10

    Tags: SnP, SPY, QQQQ, Dow
    Jun 15 11:37 PM | Link | Comment!
  • S & P - Trading Range Is Alive And Well

    Tuesday  15 June 2010

     Last time, we recommended buying weakness and did so at 1076,
    last Friday, shown on the chart.  Of some concern was a narrowing
    of Friday's range, indicating some lack of demand.  Overnight trade,
    coming into Monday's day session, showed price rejection at the
    1096 area.  We felt it was opportune to take partial profits at 1094,
    pre-opening.  As the day developed, a lessening of volume and
    upward range extension suggested there was not enough buying
    activity to get through overhead resistance, so we opted to exit the
    final portion at 1099, just prior to the highs for the day.

     It is apparent from the low end close on Monday, [second bar from
    the end...the last bar is overnight activity and pre-opening for
    Tuesday], that sellers were still active in defending the upper end
    of the trading range, and it appears that a reaction may ensue. 
    Support is expected around the 1070 area, which happens to be
    a 50% retracement as well as where demand showed up, last week.


     S&P D 15 Jun 10

     The 60 minute chart gives a more detailed look at where support is
    likely to halt any decline.  1070 is the 50% retracement, and there are
    a few lows that held just under 1070 on 10 June.   As always, support
    or resistance should be viewed as an area and not an absolute price. 
    For as long as the trading range remains intact, anything can happen
    in either direction.  We have areas where we want to initiate a new
    position.  It will depend upon HOW the market activity develops, at the

     No position, for now.

    S&P 60m 15 Jun 10

    Tags: SnP, SPY, QQQQ, Dow
    Jun 15 9:09 AM | Link | Comment!
  • Natural Gas - A Special Type Of Trade. One Of The Best Set-Ups.

    Friday  11 June 2010

    [Why have an interest in Natural Gas, or futures?  Charts are charts,
    and the principles behind them are equally true, regardless of the
    underlying instrument, a stock, bond or futures.  They all beat to
    the same force of supply and demand, reduced to price and volume.]

     When a market builds a sideways base, breaks out of it, then retests
    the breakout, it is one of the "safest" kind of a position to take. 
    Natural Gas has been in a sideways base from which a strong move
    up should emerge.  Once price breaks out of the base, in this case to
    the upside, it is a show of strength.  At some point, the breakout will be retested, and it is on the retest that a position can be taken with
    relatively small risk.  No trade is ever a guarantee, but some do carry
    a higher probability degree of a successful outcome.

     We recommended long positions this morning at 4.820.  The objective
    is the 5.250 area, and that will be refined if/as price moves in that


    NGQ D 11 Jun 10

    Tags: Energies, NGQ
    Jun 11 10:33 AM | Link | Comment!
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