Thursday, June 9, 2011

S&P (ES) Re-entry opportunity 6/9

Anyone who has followed this blog in the least bit knows that me and Dolemite have been shorting the equities quite a bit, and it looks like another opportunity to get in is coming via the S&P index. We see a retrace today heading us towards the all important 1290 area, as the bottom of an important retracement channel and some previous peaks and valleys. It looks like the MACD is providing some continuation divergence between today and Tuesday's highs to boot. Also to note is the extremely low volume today (shown in light blue below the candles) compared to the volume for the down days. Any signal, such as the shooting star forming now, and I think its sell sell sell.

Edit: To note, you can see my charting application has actually switched front months to the Sep contract, but the Jun contract is also quite low in volume and is already at the 1290 level, with highs at 129300.

EUR/USD Head and Shoulders verified 6/9

After 2 and a half trading sessions, the Euro pair formed a great head and shoulders pattern with a neckline shown in yellow. We broke this earlier this morning (and what a break!), and now we look for the price target. Usually we find a price target for a H&S pattern by taking the height of the neckline to the head and projecting it from the area the neckline is broke (shown in purple). So with that said I would expect a target price of around 1.4425, although in the end I think we might be heading even lower.

Silver (SI) Update by popular demand 6/9

A 4 hour chart of silver to our left here, we see that after silver sold off from 38.75 to near 35, we bounced back up to the 37.5 level. This was within the retracement of the down move shown in purple. But it then moved downward to retrace the up move and stay within those bounds (shown in green). So right now were at a decision point. Silver either continues moving up in this small up trend seen by the green retracements OR we continue down, just forming a mini double top here and enter back into the purple retracement zone. I personally dont like either play at the moment, but if i had to choose it would be to the short side as we are in the upper portion of the range formed after the early May sell off.

Crude Oil (CL) Providing another short opportunity? 6/9

So a lot going on in this hourly chart of crude on the left, so lets break it down. It looks like we are kind of holding the retracement of the recent down move (the purple) at the highest level, we also seem to have ultimately topped out at a previous peak (@101.9, shown in green). While we are not quite up to the trend line in yellow that we spotted in a previous post, its close and this will provide an ultimate "I'm wrong" line in the sand. Lastly we are showing some continuation divergence in the MACD (shown in light blue) as the oscillator pulls back farther than its previous peak with the price not making a new high. I think this is a good opportunity to try to pick up a few dollars on oil.