Saturday, June 5, 2010

Jimmy Joyce is not alone

First things first.  My trade from thursday to go long at 23.87 that went bad.  on thursday I got a DMRM signal at 24.23 which I took at 23.87.  With all the hype about friday's unemployment number I decided to keep it.  Ignorning 1) spx closing only 3 points higher than round number 1100-- bearish and 2)  spx retreating after hitting 1x2 line on the dot -- bearish and 3) friday was closest to june 6th a 120 day important date from Gann cycles-- bearish  and above all carrying a trade home when there was so much  speculation  on Friday's unemployment numbers. When I wote my blog on thursday my views were biased.  My buddy Eddie always says "one's views reflects one's position".  
Moving on FAS opened sharply down and made a quick low at 22.54 and as is customary did a 50/60 cent rally to 23.16 and proceeded down. I finally jumped out at 22.67 taking a 1.20 hit.  Rest of the day was history in the making.  No one was buying.  FAS eventually dropped to 21.03 one of the biggest hits.  I did not trade after the sell. 
The first chart is the first decline from 1576 to 666 and subsequent rally.  The rally ended 8 points shy of the 61.8% retracement.  Just 4 weeks ago I couldn't find a bear even if I looked with a x-ray vision glasses.  Sh... I was one such bulls.  The point is no one really knew.  Now the perpetual bears claim they knew.  Fresh calls for this market to collapse and goto 60 on the SPX are surfacing again.  That is one of the reasons for the weekly chart.  There is enough support just above 1040.  Should we go thru 1040 the next level to watch is 956.  The daily chart is rally from 666 to 1219.8.  The 38.2% retrace ment is at 1008.  That would be good support.. 1x2 support at 976 at 50% line is at 943 another major support.  We are essentially getting into an area where there is lot of conjusted support for the markets.    Looking at the decline from 1219.8 on the daily Gann,  SPX is on the 2x3 line from a perfect rejection from the 1x2 line.  On the parallel line the support is at 1044. I am not categorically saying June the 6th the Gann 120 day is done on Friday.   May be Monday is the real low  To me it looks like SPX is pretty darn close to A low.  How would I play it.  I would rigorously play only the DMRM.  My buy point on FAS is currently at 21.70. I am feeling a lot bullish and slightly uneasy.  I plan to trade only half my normal amount until I can put 4/5 wins in.

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