Market Recap: Close Day Volatility In The Last 30 Minutes, Per Usual
October 31, 2008 4:11 PM
Well, I mentioned that today was a close day and have mentioned many times that those days are generally marked by huge volatility in the last 30 minutes or less. I mentioned in a post that “if they want to sell this down into the close they will spike it to a new high and then reverse it”. That is exactly what happened. We made a new high and reversed. I said “we have to be above 9400 at 3:15 EST or I think they will try and sell this down”. We closed below it and boom, down all the way to 9200. The SMA lines saved the market I believe and it reversed in the last 5 minutes to pop 150 higher.
At any rate, this is why I mention “close days”. This crazy nonsense generally happens rapidly into the close and can make moves that are startling and rapid. We could have easily gone negative at the close and lost all gains and they tried, but failed. If we had a few more minutes on the clock we may have gone negative. The move came too late. Another crazy close day. Have a good weekend.
Market Update: All Numbers Have Cleared, It Is Now A Close Day
October 31, 2008 1:42 PM
If we did not have key long term SMA not far above this move we would likely really pick up steam here as all numbers have been cleared. We saw a 50 point pop once 9380 cleared. It is now a close day and we may see big move into the close. We have to close positive today I believe. Dow SMA is a hair above 9500, that could be an issue, I am not certain. Normally the first time a line is touched I do not like it, on any level.
In addition, we have the election coming. I am not sure if traders want to be long going into that. No idea. Personally I think it is a bit risky. An Obama win might make the market nervous, but not certain of it. That may also depend on the makeup of congress. History suggests the markets will NOT like the Dems in control of all 3.
Market Update: My Numbers 9014 Dow and 938 SP
October 31, 2008 10:18 AM
Currently my numbers are 9014 Dow and 938 SP. If those clear we should see more pressure. At the very least they are the only firm intraday numbers to be long, as i see things. The outcome of this is still undecided but the wedge pattern is broken to the upside BUT we have Wednesday’s and yesterday’s high to contend with. In addition, if we clear those, it will be a close day and could see a big move into the close.
If we clear Wednesday’s high, I believe we will clear 1000 on the SP today on another bs short covering move. If….. It refuses to move right now…. Wednesday’s high is an issue here…
Close Update” Ok, was wrong, we only went to 984 and change. The pop after we cleared Wednesdays high was only 50 points so I became skeptical that we may see weakness late.
Market Recap and Tomorrow
October 30, 2008 4:22 PM
The market open did just as I thought and had told readers last night - we had to clear yesterdays high. Once the big futures open was under it, I assumed the open would be sold and it was. That was the days high, which happens the vast majority of the time. The only reason we did not see pressure is we could not get under yesterday’s low. If we had, selling would have likely picked up steam. I also mentioned that today.
For tomorrow, the action is very likely to pick up. The market is poised to break here - one way or another. If we gap down, the low needs to be bought to avoid trouble. There is key sma support coming below at about 912 on the SP currently and about 8800 on the Dow. Those have to be bought if we gap lower as I see things. If we gap higher, the gap has to be bought as we still have nothing to stop the fall to the downside. I am mentioning this because I do believe we may see a gap tomorrow, one way or another.
Again, my “guess” is that a gap down to those areas will likely be bought. While I always mention to never guess, you have to know what may happen there. If we are going to get severe weakness, it would likely not come until next week and would have to spend a significant time below those areas.
Market Update: Volatility Should Pick Up Soon
October 30, 2008 1:38 PM
The market has sat in this range for most of the day. The open was sold and this generally creates a high for the day and generally the pressure comes late in the day. The SMA’s have provided support for this, nothing more. It should be at an inflection point near the close or sooner. We either have to get moving to the upside or it will break down and 8800 is in the cards near the close.
Right now we have to get over 9145 to have any chance of taking out the highs. I do not like the intraday lows on any level. This house of cards is growing by the day.
Market Recap: This Is Why “Close Days” Are Risky
October 29, 2008 4:14 PM
I mentioned that today was going to be what I call a close day - the close is all that matters. These days generally have wild swings in the last hour, sometimes in the last few minutes, as we saw today. With about 10 minutes to go the Dow hit a new high of 9363 (I said it had to clear 9380 to be long there about 10 times) and boom, down she goes. It fell over 350 points in less than 10 minutes to make a small bounce in the last minute. This is why I do not like close days, on any level and you had better know what is “likely” to happen if this and this happens, or you will likely get torched hard without what you see as a warning signal.
This sets up a problem for the market, possibly for several days. Today’s high is critical. Traders can short below that high and if they want to take this down, they will. Even if we clear this high, i am not certain. It will just create more uncertainty most likely.
Market Update: No Movement After Fed Cut, It Should All Happen In The Last 30 Minutues
October 29, 2008 3:13 PM
The market is not moving at all after the rate cut. Somewhat strange. Traders appear unsure of what to do here. The low needs to hold into the close I believe or will give them an excuse to sell it. If we had a firm high the shorts would likely step in, but we do not. Not sure of the close direction because of that.
Market Update: We Better Reverse Here
October 28, 2008 11:06 AM
The market has done as it “should”. I mentioned early on that if this was a “normal” day, meaning no Fed, we WOULD test going negative. Well, we went flat already. There better be buyers here at yesterday’s low or this will get very, very ugly. My guess is we will reverse in here, or at least attempt it. Opening higher like this makes a plunge day far more likely. If the Fed was not meeting I would say a plunge would be reasonably likely and is not impossible as it is. This move higher would have been far more believable if we had opened lower or flat then moved higher.
At any rate, there were buyers just above yesterday’s low, which is normal. Unfortunately, we have no firm low to trade from as I see things. This issue could be revisited again. But again, once this gap essentially “filled”, it makes sense to have buyers at the flat line. Whether it can hold, I am not sure. Again, if the fed meeting was not going on, I would say no.
Market Update: Low May Have Been Seen At Open
October 17, 2008 12:32 PM
I mentioned earlier that I need to get my futures charts back up and running to have a better idea of where we are at the open. The reason for this is I missed the opening bell and not certain where the “true” open was and cash charts never reflect the true open. I believe that the gap down at the open was likely bought and the trade was long early in the day. Generally, when the gap down is bought like that, that puts in a day low. Therefore, unless we get news, the odds favor that the early low is it for the day. If we clear the low, it would almost certainly have to come late in the day. If we do clear it late, then trouble would be in the cards. But if my assumptions about the open are correct, the low of the day is likely to hold.
Market Recap: Difficult Day As Predicted, Support / Resistance Tip
October 16, 2008 10:57 PM
Today was difficult to make a call as I said was probably likely last night. There was no clear sign of a low (as I view things) but mentioned that it looked like we “might” have a tradeable low at 8197 but was not certain of it. Well it was. There are certain indications that I look for and we never had the type of low I prefer. I thought traders would want a firm no question about it low to go long being down 400 plus. No dice. However, I did also say that “there is no sign of a top” either. When this happens and the shorts begin to cover it can take off in a big way - and that is exactly what happened. The problem with days like today is if we get pressure going forward there is nothing to stop the fall. Therefore, if we get more bad news and it begins to fall, there is no clear spot to hold other than today’s low. Sorry I wasn’t more help.
If you are wondering why traders “may” have been buying at 8200 on the Dow, here is some insight. Pull up the 1 hour chart for 5 days and look at Friday’s trades. Do you see that the 8200 area had some problems clearing AND holding for several hours? Once this happens “support” traders will look for that area to buy as they view it as support. I probably greatly differ than most as I am not a fan of support and resistance areas UNLESS the market makes it VERY clear that it is support or resistance. Anyhow, I saw the support range and thought there “might” be buyers there, but was not certain of it and could not go long or advocate taking it. I look for support areas where reversal attempts may come in - not just blindly go long assuming it will hold. But that’s me.
The reason that this area held and took off from there is news came out about MSFT taking another look at buying Yahoo and shorts probably began to cover and the market took off as I had mentioned there was no clear area to short it - basically nothing to stop the move higher.
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