Before the Open (Dec 16)

Posted on by Jason Leavitt

Good morning. Happy Friday. Happy Quad Witching Day.
The Asian/Pacific markets closed mixed and with a bullish bias. China gained 2% and Hong Kong and Indonesia gained more than 1%. India dropped more than 2%. Europe is currently mostly up, but there are no 1% movers. Futures here in the States point toward a moderate gap up open for the cash market.
The dollar is down. Oil and copper are up. Gold and silver are up.
We entered this week with the market being in decent shape. The indexes had rallied at the end of November and then settled into a consolidation period at the beginning of this month. Several signs suggested a year-end rally could materialized once the major news events were out of the way. But here we are 4 days later and things have changed. Three days of selling pressure have zapped the positive sentiment, and I’d call the market very neutral right now. The S&P is unchanged over the last two months and unchanged since the first week of August. We’ve gotten lots of up and down movement, lots of gaps, lots of news and in the end the indexes are unchanged. That’s not bad, but it hasn’t given us much to play with.
I’ve been doing more watching than trading lately. I see no reason to allow the market to frustrate me with its lack of follow through and daily gaps. I’d rather preserve capital and maintain my emotional stability so when things get better, I’ll be ready to go. More after the open.
headlines at Yahoo Finance
headlines at MarketWatch
today’s upgrades/downgrades
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Dec 16)”

  2. opex Friday all comers get taken to the ropes. Better head to the Blarney Rock bar and grill and chill out with a few brewskies before losing too many shekels. Shalom! HW/nyc

  3. You were expecting the markets to rise a bit, due to the abundance of puts. The day is early, kinda looks like EURO stuff may let the puts make some money.

  4. This move up above the 50 day EMA and Bollinger Band midpoint seems to be confrimed by momentum indicators. From the EW perspective, it’s becoming more probable that we saw a 5th wave completion on WED completing the correction from 1266, and we are now in a breakout smaller wave 3 upward from the WED low, IMO. SPX 1235-1241 sould be near term resistance. SPX 1226 needs to hold any pullback in the near term for this bullish interpretation (smaller wave 3 in progress of an anticpated 5 waves upward) to be correct.

      1. RichE – your assumption, I presume, is that the Euro direction is still closely locked with U.S. stock market. I’m not so sure that’s still as stong a correlation near term as in the recent past.

  5. It looks like short cover. I’m still short.
    The EUR/USD is going up and the ESH2 is going down. …and now a some Batman color, “Crash”, “Biff”, “Slam”, “Bam”

  6. So far, in EW terms, we have 3 small waves up on the hourly chart from the WED SPX low. Since the AM high today at 1231 we’ve declined below the high of wave 1 (1227ish) which indicates that this move up from WED is not a 5 wave sequendce and may be part of a continuing sideways pattern that will emerge later into upward move.
    Jason appears to be correct that there’s not a recognizable trend in here. I’m treating it as an intraday day trading affair. If support develops in the 1222-1223 area, I’ll go long.

  10. SPX 1218 is a .618 retrace area of the 3 wave adavance from WED low (1209-1210) to today’s 1231 intraday high. If we get there and show signs of a reversal, I’ll look to go long for a 1225 upside target initially.

  11. ESH2: still short.
    EUR/USD 1d1m: almost a perfect HS IMO.
    I think the SPX has given up but the EUR/USD is still holding on.
    No Santa rally. I wonder if people will be returning what they bought. Man! that’d be bad.

  13. RichE – you’re correct! I am/was “probing”, but since there was no support & reversal at 1218, I’ve yet to take a position today in either direction. What is clear now is that the move down from SPX 1231 is impulsive (a 5 wave downward pattern). What it suggests to me is that the downward (corrective)pattern since 1266 may not yet be over and SPX 1200 may still be tested.
    If anyone recalls, I labeled the move down from 1266 into WED’s low as a probable “double zig zag”, i.e. “abc x abc” pattern. However, if the corrective pattern has not yet ended, we could be seeing, IMO, a “triple zig zag” (abc x abc x abc)downward pattern that could end at 1200 or even lower. Therefore, given the impulsive 5 wave decine from 1231 so far today, I’ll change my thinking and watch this 1PM bounce for a possible shorting opportunity in the 1220-1225 area. By the way, congrats on your profitable short position!

  14. By the way (sorry, Aussie Jay), if you look at an hourly chart of SPX, you’ll be able to draw a very nice channel connecting the declining tops and bottoms since the triple top. Within that declining channel you may be able to see my double zig zag pattern into WED’s low followed by the 3 waves up into today’s high, with the expectation that a final 3 wave(abc) dwonward in progress.

  21. Stopped out of my short position at 1220.
    Hey, RichE – I’m a little tired after a day of “probing” with nothing to show for it, but at least no loss. MON I’ll probably start the day looking for another place to short.
    Aussie Jay – I know what you’re thinking! I’ll try harder next week.

  22. try pit trader piviot lines as put out by nyse daily at midnite
    price was held at main piviot since europe close on all usa indexes by the quad witches
    and for spx rut ndx index rebalancing at the close of trade

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