Market Update: Trend Break
November 7, 2008 11:59 AM
What we have here today I believe is simply a trend break. This is going to be a difficult day to predict as we still have zero firm lows of any kind. My guess is this will be a temporary move and a rejection of the highs seen will likely come probably Monday or Tuesday. Tuesday ideally. As far as today, the intraday chart should dictate this as it is not a close day. We would likely have to significantly get below yesterday’s low to cause pressure as this would break the trend line.
If this trend break is going to hold today, we should give a strong reversal above today’s low. I believe this move today should be limited to the upside, most likely. The chart says it is far too early to take this up with any confidence at all and we have no lows below.
The problem with parabolic moves, in either direction, like we say the last two days to the downside is there are zero firm lows and zero firm highs. Yesterday was all trend, no rejections. So there is no firm low and no firm high - until one is created. This will likely trade on sma lines and i despise that type of a move, as I often mention, because once they reverse, down she goes.
To keep this simple, this trend break suggests the trade is long above yesterday’s lows. I think it is as simple as that. If we get much below yesterday’s low, we may see panic. This is why news is not that important, in general. Should we be going up today with brutal news? No way. Does it matter? No.
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The hourly trendline is right here at about 8840, if this is going to hold, we need to not go much lower here
bouncing right off the trendline…. as i figured…there is nothing to trade on but trend lines and sma’s today…. so they should hold it here and/or reverse the weakness unless we are going test the low
They are waiting for the sma’s to catch up I believe…. as long as we do not go much below 8840 area before 12:00 EST, we are liikley to challenge the high, eventually
actually, the trendline is about right here, 8830… we should reverse right here if this is going to hold
both the 5 min and 15 min sma lines are in the sma spot, 8800… I think we have to stay above them or we should revisit the low
the hourly tren line is broken here i believe, the sma lines need to hold here above 8800
direct bounce off the 5 min sma at this low, just above 8800… ugh this is going to be sma crap all day long, i can see that
ut ohhhh…. 8784…the 5 min is breaking down a bit here
I think we need a strong reversal near the low here to have any confidence this move can last…
what did i say last night? “if we open higher, early strength will be sold once it stalls”. Bingo… the chart doesnt support early strength …well facts do not either, but lets not reality get in the way here
As mentioned todays open created a trend break to the upside… therefore i believe 900 has to hold today… if we get under it, it looks to me the trend would be broken and we may go straight down
Therefore, I think there will be buyers above 900 here on any weakness…and thats probably their stop number for the day… I think if we get under that we may see some panic
Ok, so let’s keep this simple…. there should be buyers on weakness unless we get much under yesterday lows… if that happens it should trigger stops… so I believe that is the trade here… so I like this nonsense? no… but it is what it is
If we close out 12:00 EST in this 8840 area or higher, we should immediately test the high
8850 or so should contain any weakness here before 1:00 est, thats the trend
They are going to pop it down a bit, it should reverse here and challenge the high
8890 and climbing, couldnt have guessed that - ha
If we take out the high i believe we will pop to at least 9000, maybe slightly higher
There is caution here as todays high is an issue unless cleared…. this may take a bit of time… I still think the entirety of todays move - whatever it will end up being - is complete nonsense and wont last in coming days
what a beating, this move higher is a complete nonsense bounce and the traders know it…if they really wanted to take out 1044 in the coming days on the SP they should have spiked this lower today and then reversed it
there are two short points now for traders…. this is looking shaky, at best, and the hourly trend did not hold up, I still think this is simply blind long above yesterdays low - for today… nothing else will get them concerned
it looks like 914 needs to hold on weakness or we will test the low…. this is going to be brutal as everyone on the floor knows what this is about - a trendbreak bounce
If we have seen the highs of the day…and I am not sure we have, but certainly possible…. watch out into the close… I think the odds of selling this train wreck late would be high… these highs, especially the most “recent” high have to be cleared
IT has to take out this recent high and keep going… it is decision time right here
926 HAS to be cleared… we have a 1 2 3 top in place… if that cannot be cleared it will be concerning for the close
it backed off it just over 925…. they HAVE to take this out or I think they are going to rip this to shreds into the close
Normally i would say this sideways action here is good…. the sma line is strenghening this the longer we stay above 915 or so…. the problem is we have a 1 2 3 top in place and it has to be cleared
the sma is getting stronger and stronger below…. ugh i hate this nonsense
it looks like 918 is near term key… if that clears, then trouble may be brewing… it refuses to move here right now
This is not going to sit here the rest of the day… we are either going up or this is going to break down into the close… which is going to happen i am not sure as of yet… the refusal to take out 926 is getting concerning….
918 needs to hold or i smell troubleee into the close….I am just hugely skeptical of this nonsensical bounce off a trendbreak and horrible news… it is complete bs
I believe the action is going to pick up here after 2:00… the3 range is getting tighter and tighter, it has to break soon
as long as 918 holds we are ok here…. if that clears, then I am not sure… the sma is getting stronger at about 916 or so… we have to break one way or another reasonably soon…
ok 2:00 I think it has to decide here
The hourly trend lines suggest we are going to take these highs out here… but the hourly trends have not held today, unlikely yesterday
amazing. refused to take 926 out again….
what I would like to see is a pop to 930 reverse, close out 3:00 below 920 and then they would likely sell it down hard into the close…
this thing is stuck between 918 and 926 one has to give - eventually
the trendline is at 922, it held, I think it has to clear 926 here
unbelievable… this is the slowest I have seen since last year…
ha… refused to take out 926 AGAIN….
918 is still key here i believe… a break and hold under that and I think we are in trouble
this sideways action cannot hold into the close… it has to break… the sma lines are getting tighter and tighter, it will break one way or another before the close here… the sma lines and this sideways action suggest we will break to the upside…but i am not certain of it…. I do not trust moving averages long term
yep, finally… 927
if we clear 930 before 2:45 it will shoot straight up
didnt happen. backed off 930…
new high…. I have no idea how high we will go… as I think this move is complete nonsense, but there isnt anything really to stop it other than common sense
If they want to shred this into the close, they will close out 3:00 below 8876 I believe
its close…. this better hold up or traders will have the number to torch this thing
what did i say earlier… “what I would like to see is a spike to 930 and reverse and close out 3:00 below 920″ ….ha ha ha
they may torch this here… extremeeee caution
918 clears here we may see panic, im not sure, but that would be my guess
915… going negative is not out of the question
this is still up in the air for the close.. this high is an issue I believe… if we cannot reverse here, I still think panic may set in
That should be the high of the day, I will be shocked if they take this out here…
914… panic should begin to enter the back of their minds…
912
there is support at 910….support bounces are nonsense in my view
we would have to close out 3:15 above 920 to even have a glimmer of hope of taking out this high IMO
ugh bounce from 911 all the way to 919
920 what a bunch of nonsense
ughhhh they couldnt sell it down, closed just above 919…. ugh ugh ugh… we were close to ripping this nonsense bounce day apart too
that may be it now, no idea, they had their chance to sell this down and it reversed at about 911, we would have to clear this low now to maybe get a close selloff….
If this low doesnt hold , my first second and 3rd guess is we may go negative
its getting close… there had better be buyers here
If we clear this before 330, we should go straight down i would think
Hereeee we goooooooo… look out below, IMO
910 support bounce once again, the longs will not give this up unless we get under 900 most likely
come on, I smell negative…
whatever, this is so stupid… there are no lows supporting this nonsense, they simply are not going to give up unless we get under 900, its as simple as that
unbelievable, 920 off a support bounce at 910
well, what do i know, 922 off a support bounce… amazing
If we do clear the high the shorts will cover …. this is a complete waste of the longs time, it isnt going to last in coming days
shorts are clearly covering because they couldnt sell this down… days like today are frustrating as it makes no sense… people are “blind long” above 900, and thats just the way it is
That had to be the most ridicilous bunch of nonsense I have seen in a long time… 20 point move to a new high off a support bounce and short covering… unbelievable… what do I know, nothing apparently
anyhow, 910 is clearly a big number going forward now…. have a good weekend