Posts by Steve Rushton

A few more days of strength? Watch the action should the market continue up and meet the mid-point – in 1920s towards the end of the first arm of the split centred T structure, 23-14 oct.

Above there we have the 55EMA to contend with in the 1950s – probably strong resistance now.

Looks like we get a expiration short covering rally. Short term Buy Signal at 1884 – easily within reach today – especially with nice comments from the FED.

If we get above the 200MA at 1905, then more buyers will come in.

Beware if failure occurs below 1875 as that would be a continuation short signal.

ok looks like we had a pre-expiration panic with loads of delta hedging causing a flush.

Nice recovery, but futures are seriously negative again today. A retest of the 1830s perhaps.

Notice those 70 day pulse projections are forcing the market down. It looks like we may need to wait til end of the month before stabilisation can occur.

Looks like we have a double bottom in vol oscillator, which may mean that things are stabilising under the surface. If correct then a potential recovery into mid November.

Rather an ominous failure at 1900  – previous support becomes resistance.
Potential target now the MOB at 1830-40.

So we breach the 200MA, as afternoon trade repeatedly collapses.
Trade now favours the short side until the 200MA is recovered.
We will need to see strength into a close to confirm a turnaround.

However, we did hit S3, and this has closed the ellipse (august low-september high).

So we finally arrived at the 200 ma. And we have now penetrated my gray channel to the downside.

There may not be much more downside this week as these levels and the ellipse tool suggest strong support in the 1880 area. That and the potential for profit-taking from significant bearish put positions on the indexes.

However the market is now vulnerable to further declines.

There is a classic chart pattern and a rare one at that called “railroad tracks.” That pattern describes the action in the indices the last two days. Railroad tracks point to distribution, i.e., professional selling. Because they often occur near a top, the pattern is a sell signal. (Mish Schneider)

Certainly ugly. Next point of possible return is the 1905-1910 level on the Gann line from the Feb low. Also the 200ma.

A steep decline, waterfall, may well be required. The MOB indicates possible turns today and a secondary one on 23 Oct.

Perhaps we bounce there today and try to recover into expiration next week.