Wednesday, January 25, 2012

Markets: Like Holding a Beachball Underwater

S&P 500 CASH
  • The high risk sell stop (short 1 HR) would have been hit Tuesday--depending on entry strategy-- and subsequently closed out during the ensuing rally. High risk sell or buy stops are not highly recommended if traders follow an intermediate cycle trading strategy.
  • If tomorrow has a higher high and higher low 1306.06 would be the  new high risk SELL STOP
  • 1248.64 remains the strongest pivot support since the November 25th low. Breaking below this level would add support to the argument that an intermediate downtrend will be in progress.
  • There is Fibonacci resistance at the 1325-1331 & 1350-1365 levels.
  • Next significant Time-Price Energy Point is Feb 3-7th.

U.S. Dollar Index
  • U.S Dollar Index is at a critical level: If the bullish trend is going to continue a low should be attempted in this price range over the next few sessions.

Using A-B as the base radius applied to the October-November rally:
  • Arc AC intersects vesica piscis @ the early October high
  • Arc AD intersects high @ D which is maximum time of cycle AB and coincident with price.
  • Note the green diagonal line that is tangent to the red circle (point E): it is currently at the level of today's close.
  • Resistance along BD: BD is parallel to AE

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