Before the Open (Jan 13)

Posted on by Jason Leavitt

Good morning. Happy Friday.
The Asian/Pacific markets closed mostly up. China dropped 1.3%, and Japan and Singapore moved up 1.4% and 1.8% respectively. Europe is currently mostly up. Austria is up 1.8% and France 1%. Futures here in the States point towards a negative open for the cash market.

The market keeps going and going. The S&P has moved up 15 of the last 19 days and 22 of the last 32. Every dip gets bought; every gap down gets bought. Complacency is high. Fear is nowhere to be found.
But it’s a little fishy to me that if you eliminate the opening tick every day, there has been no net gain this year. Last week the market gapped up on Tuesday and then closed the following Monday exactly where it opened – no net change. This week the market again gapped up on Tuesday and again it hasn’t changed since then. Eight days of trading (seven of them closed up) with no net change whatsoever except for two gap ups. Hmmmm.
My bias of course remains to the upside. There are lots of bullish patterns to trade and virtually no good bearish ones. But I’m staying on my toes.
The market is closed on Monday for MLK Day. That makes today the day before a 3-day holiday weekend. The market has been very slow for two weeks, and it’s not likely to suddenly come to life today. Next week the holiday season officially ends. Hopefully we’ll start getting some intraday movement. 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 (Jan 13)”

    1. Raymond – thanks for your reply last eve to my inquiry about your FTK comment “model of action to come” yesterday. What I thought you were implying was that FTK may be a predictor of broad average upside breakout to come. I don’t trade individual stocks and only invest in dividend stocks for myself and clients (no margin), but your comments are imformative and appreciated.

      1. YW,
        I am not sure if div stocks are a good option if you’re monitoring the mrkt every day. A good sweep on equity can wipe out any gains on any divs. We find that compounding on swings (overnight – a week or so hold time) during windows of opportunity, going to cash or hedge pairing on pull backs even with a +3m acct works more effectively. But each to their own.
        Increased cash position, short side looking more attractive short term.

  3. Brian – we exchanged EW ideas and today’s opening action could help clarify things, IMO. I note the uptrend line going back to DEC 21st on the hourly SPX chart has been broken (after 5 touches indicating an important trendline, IMO)and the Tues gap open in SPY has been almost completely filled. If we continue to trade below the uptrendline on a backtest today, it may be an indication that we have completed wave 3 of and ending diagonal (for wave C) and a downside break of 1267 would confirm that in my opinion. That would imply that a wave 5 advance beyond 1297 would follow to complete wave C and the ending diagonal. If this is what’s unfolding, the upside target area can be estimated based on where the wave 4 decline ends. Do you have any thoughts based on your EW interpretation?

    1. How are you folks using EWT?
      When I was more of an investor / position trader I used to subscribe to Gartman and Mauldin then EWT. With due restpect to Robert P (he did win a trading contest and was head of the mrkt tech assoc), I found all their advisory pricey and neutral to useless.

      1. I’ve read RP’s two monthly publications, EWT and EWFF, for years. I use it as a view of the the bigger picture. I found their MWF daily updates to be nothing more than entertainment, not worth the cost. I also periodically check in with neowave. I think of the difference between the two similar to moving from algebra to calculus. At least it is probably what Neil would like you to think.

    1. jimmaya – I don’t know abour ES, but SPX lod could have already been hit at 1277ish. Below that, I’d watch SPX 1273 & 1268 but maybe that happens next week, if at all.

  7. Hey PeteM and all, Just got up. Nice move down from very early this morning. Again, based on the futures in 6 min bars, I see the move down from the high yesterday morning as a ‘c’ of 4 of C of Y of 2. If the initial drop from yesterday’s high premarket is a 1 and the drift up from that low all day and last evening completed a 2, then the move down from 1 am CST this morning is a nice 3. The rally off the low today of 1272.75 is likely the beginning of 4 which has a target of around 1282.75. Then down to complete the c and initiate the 5 of C of Y of 2. “IMO” of course. The biggest problem with EW is that it is best viewed historically rather than real time. Personally, I have found that everything takes longer than I expect in real time.

    1. Good question. I’m labeling the end of wave 3 (of an ending diagonal wave C) at yesteday’s SPX 1296.82 high. If SPX rallies back to the broken uptrendline going back to DEC 21st on the hourly chart and fails/reverses around the .618 retrace (1289-1290ish) of 1297ish high yesterday to today’s 1277ish low, I’d think about a short position targeting the overlap of wave 1 (1267ish).

  10. Brian – I think your labeling of the end of wave 3 as Jan 10th is just as valid as my interpretation. To me the more important thing now is what happens on a backtest of that broken trendline I mentioned, i.e. if we break through it in a 5 wave sequence, we probably see a new high above 1297 and wave 3 is still in progress.

  15. I haven’t invested in individual companies or specific sectors for many years – I’m too lazy. If this 4 of c doesn’t turn out to be a triangle, i.e. ES rises above 1282.75, I’ll try a short about 1285.5 – but, it is looking like a triangle is forming. If that is the case, then I’ll probably attempt a long position around 1268.

  16. i have decided to downgrade the world
    this will make y/days high as the high to this corrective sequence
    the bulls are devistated and in disbelief,vowing to hold their longs to zero

  17. While under the hood we continue with all time highs though some going parabolic –
    FAST
    GWW
    CMG
    VRUS
    PNRA
    etc
    Other potential new leaders still strongly neutral / perky.
    I wonder if the indices are put together by the same clowns that conduct the timely and accurate debt rating 🙂

  20. I received a boat load of trading / investing books for Christmas. Most are garbage but of worthy note I just finished-
    Super Boom – Jeff Hirsch of seasonality fame (I watch for but not a big fan of seasonality). If youre a bull
    The Great Crash Ahead – Harry Dent. If youre a bear
    Markets Never Forget, but People Do – Ken Fisher. Neutral, intelligent.
    These provide interesting perspectives and it would be worthwhile to read them be you a bull, bear short term swing or long term position trader.
    All the best.

  22. Brian – at the .618 retrace (1289-1290) wave c would = wave a and it could be the backtest of the important uptrend line on the hourly SPX chart I’ve been looking for as a place for a reversal and a resumption of the down move to the 1267 overlap area. We shall see. But, I have to see some kind of reversal pattern in the area first in order to go short.

  23. Well short trader, do you feel lucky? Well, do ya, short trader? (Clint Eastwood – famous trader)
    Me? Not too excited about gong short with less than a half hour to trade and holding on over a 3 day weekend.

      1. But we got right up to the .618 retrace and SPX is hovering there begging for a short position. Raymond says sitting tight is the hardest part – and it is! Always about risk vs. reward and keeping losses minimal. Of course, come Tues. SPX could gap down on the opening and I’ll be tempted to do a woulda, coulda, shoulda, but Jason wouldn’t approve of that behaviour. I’ll just watch into the close.
        Good weekend to all!

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