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Friday, November 19, 2010

Very boring Opex Friday tomorrow

SPX made a HH and HL today.  That by itself is bullish for tomorrow.   SPX sprinted out of the gates up 5 points and by 7 it was 14 by 8 it was up 22 points and it stayed like that all day.  A small decline started after 12 noon and spx closed 4 points from the high at 1196.  The range was very good at 17 points.  The two reasons were GM's IPO and Philly index jumped to 22.5 from 1 the biggest number in 2010.  Here is a good link http://www.dailyfinance.com/story/philly-fed-index-jumps-manufacturing-best-2010/19723785/ for Philly's index. It was a perfect cloud day.  It was DKOD day on any and all bullish ETFs.  With the holidays approaching all in all the model is predicting a continued movement on the plus side. To me it appeared we have not completed the hit yesterday but hey with this kind of movement and if we have a follow thru tomorrow I would be hard pressed to hang to the bearish stance.  This is opex and the markets effectively killed the calls yesterday and the puts today.  Having done that tomorrow it can drift nowhere with a slight positive bias and close the options.  Option fridays are notorious for inaction. 

The chart on the left is dow daily.  This is the count that is currently being used by the bulls. That we are in a 4 of  3 of 1 of  P3.  I don't use EW that much for it is hard for me to trade with that. I do watch the 3s and we should be coming close to ending 3 of 1.
The next four charts show the Dow rallies and corrections from March 09 low.  The circles are potential equivalent of 4 of 3 in each of the upward waves.  A minor hit happens at end of each wave that is at least one parallel channel line lower and 25% or more of the rally from previous bottom.  From the end of iv to top of wave is usually drifting and not much of point gain. My main reason in looking at this was to gain some insight into where we are in terms of EW (big) If I follow the bullish counts.  Clearly we have a long way to go.  From my trading point of view I just keep this in the back of my mind. I will be watching my DMRM signals, my KOD flags , 10/20 cross on the hourly and HH and LLs on the dailies.  I really like the double top I posted yesterday.  Currently everything is bullish. Today's rally is back testing the top of the channel line.  I may not trade till  29th for volume should be getting low and tomorrow IMO should be boring.
Thanks for visiting my blog and offering your encouragement.

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