Before the Open (Sep 9)

Posted on by Jason Leavitt

Good morning. Happy Friday.
The Asian/Pacific markets closed mostly down. India, Singapore and South Korea lost more than 1%. Europe is currently down across the board. Belgium, France, Germany and Stockholm are down more than 1%. Futures here in the States point towards a weakish open for the cash market.
Let’s keep things simple here. The overall trend is down. To reverse this the market needs to rally big to invalidate the bearish rectangle pattern. Or it can simply keep moving sideways in which case the rectangle will morph into a neutral range. Until one of these two happens, I’ll consider the current movement to be a consolidation pattern within a downtrend. Rallies can be sold and shorted, and then it’s the bulls job to defend their stance when the lows of the pattern are approached.
Right now the S&P’s range is approx. 1150-1250. With yesterday’s close at 1185, we’re a little below the midpoint. Shorting the top of the range is easy because you risk a little for lots of downside potential. Buying a visit to the low comes with a little more risk but the risk/reward is still favorable. Entering positions here near the middle is more of a gamble…especially since day to day movement hinges on whatever major news just came out.
Here’s the 60-min chart. Despite the gaps and news, the pattern is pretty. It pays to back up and see the bigger picture…even if you mostly focus on short term charts.

Be flexible. Don’t over trade. Don’t churn your account. More after the open.
headlines at Yahoo Finance
today’s upgrades/downgrades
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Sep 9)”

      1. Sorry, Aussie. I think I’ll go back to
        sleep now since I was waiting for the Obama
        rally which never came today. Damn, and
        I bailed out of my SPY puts yesterday
        just a little bit too early. Oh well..HW

  2. yes i may go back to sleep to—-having bailed out of my ftse-dax-ndx-spx-dji shorts from preopen—just after cash opened and have been waiting for a europe close bounce
    dam just missed a scalp as i type—looks like the impulsvive has started down at least in europe
    daytrading is not a position trader and no intraday bias is a must,whilst u can be awear of the overall trend—the intraday TRENDS are unique to the intraday trading
    there are usulaly a few trends in a intraday –up sideways up–down sideways down
    or just sideways chop all day,or down all day or up ect
    one is constantly asking oneself –has that trend now changed to down from up and visa versa
    i think Jason was refering to be flexable on a larger time frame

    1. AussieJS – I agree that Jason was talking in regard to the larger time frame. At the noon time hour in the USA, we are looking at the second test this week of the lower trend line of the “flag’ formation on SPX from the AUG low. On the hourly chart, the move down from yesterday’s high has an impulsive look. We could see an acceleration downward on a break of 1140.

  3. if we change trend to up into the close from here, i will short europe for a hold over w/e
    as europe futures still trade till end usa close
    but whilst we are at S3 piviot and no sign of a reversal yet we could easy go down to S5
    but ill be watching for any change–currently short from S2 piviot

  5. Elusive Global Intraday Trend(s); how much credence Auss? Does Asia flow into Europe into America into Asia? How effective are they in determining each global market intraday trend? Who is the cursor, who the reverser?

  7. elusive—-nuh—-just have es/ym/nq 1 and 5 min charts and euro or usd charts open
    24 HOURS a day and u see the correlation
    also noting that there are 3 currency time zones–japan/asia—then europe –then usa
    and noting we have curency wars going on instead of trade wars—-no not star wars yet
    and traders are buffetered by risk and yeild

    1. No, the TICK was too busy for me. I only have one screen.
      I use the KVO and volume bars on a 1 minute 5 day candlestick.
      SHORT: If the low is a lower-low on I short the next high. Especially if there’s been some long nick. I’ve not found volume to be helpful in overbought.
      LONG: If the high is a high-high I go long the next low. Especially if there’s volume, tails and a Hammer.
      STOPS: I adjust stops to the highs and lows. If I get a higher-low while SHORT or lower-high while LONG I tighten.

  12. If SPX can hold 1150ish today, we can see a rally to at least 1162, in my opinon. I’d favor a longer term short positions from 1162 to 1176 if we can get back there, figuring a test of 1100-1122 at minimum on the following decline.

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