4:15pm
The markets traded lower today after being liberated from the manipulation of options expiration. The S&P broke below its ascending trendline but saved its uptrend by not making a lower low. Stay tuned for today’s video. (click image to enlarge)
3:36pm
FNM and FRE are both down more than 20%.
3:09pm
ES touched 1274.50 but did not make a new low. Uptrend remains intact. Bulls may take the market long here with a stop at 1274. Also interesting to see the SPY find support just 6 cents shy of its 20 daily moving average. This is an ideal trading opportunity because the entry price is so close to a clear exit price. The risk is low and clearly defined. I would not hold the market long overnight, however, because the market could gap down.
3:04pm
ES at fresh session lows to 1275.
2:23pm
Have to make note that today’s selloff is on light volume.
2:21pm
If the ES breaks last week’s intraday low (1274.50), the market could really start to roll over, as it would end the trend of higher lows.
1:26pm
The ES tested and is currently holding the ascending support line. However, the bulls are not defending the level with much volume, so a break could occur this afternoon. If we break lower, the next support level is at last week’s double bottom (1276.50).
12:45pm
The ES is approaching the ascending trendline around 1283.
12:37pm
Nat Gas at session highs but still negative on the day. FNM and FRE both down more than 16%, XLF down almost 3%.
12:02pm
ES at session lows as the dollar weakens and commodities bounce off their lows. The ES is just 4 points above the ascending trendline. Take profit on short positions at the ascending trendline (~1283), and if that breaks, put the shorts back on.
10:51am
Crude oil continues to fall, now down 70 cents to 113.07
10:30am
Reversal candle on ES 10-minute on light volume. Oil is falling as the US Dollar firms. Oil is back under $114.
10:27am
The ES bounced off Friday’s low exactly at 1290.50
10:20am
ES testing 1291.
9:52am
Watch the 1291 level for support. If we break below 1291, the ascending trendline sits around 1283.
9:47am
ES at its lows to 1294. Testing pre-market lows.
9:43am
Financials weak this morning. XLF down 2%.
9:40am
ES testing support at 200MA (1298).
9:33am
Crude up $1. The dollar is weaker this morning.
9:20am
Good morning. S&P E-Mini Futures (ES) higher by 3.5 points this morning. Crude is higher by 75 cents. The dollar is off its highs.
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August 18th, 2008 at 9:34 am
Craig,
Will GS be a good play for support on the uptrend line?
http://finviz.com/quote.ashx?t=GS
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August 18th, 2008 at 9:45 am
Its not for me. I will not get long any financial right now.
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August 18th, 2008 at 11:04 am
yeah.. in fact, i think a good september options trade, would be to sell open the 23$ calls, as this downard momentum might prevail for more than a month.
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August 18th, 2008 at 11:08 am
Oil and SPX, the inverse correlation seems to be weakening in the last 2 days? Any ideas on this?
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August 18th, 2008 at 11:12 am
Clarke, great observation. The takeaway here is that the market now has once less catalyst to move higher. This is a bearish sign for the market.
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August 18th, 2008 at 11:19 am
Look at NYSE. That chart doesn’t look nice.
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August 18th, 2008 at 11:22 am
Hey Craig,
New to you site! Quick question for you. What has your experience been with the broader markets after an OE week?
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August 18th, 2008 at 11:29 am
What I meant to ask was, do you see sideways action, or is there a bullish/bearish bias after OE week?
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August 18th, 2008 at 11:42 am
I think he means what do the markets usually do after OE week, and i think the right answer, is usually, but not always, they tend to liberate from the enforced resistance, and support lines that were drawn by Strike Prices on options, so take for example EMC, had huge volume on the 15 $ august call, so the stock price drifted higher in order to reach that SP, now that the 15$ strike price is no longer as strong, EMC can move back down.
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August 18th, 2008 at 11:53 am
u05ikoren did a nice job of explaining the action after options expiration. If options expiration maintains a tired trend, the markets are free to reverse after the options expire. But sometimes options expiration serves as a volatile market reversal, and the reversal continues the week after options ex.
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August 18th, 2008 at 12:03 pm
craig, you buying this hit of the ascending, or are you going short, for a possible head and shoulders?
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August 18th, 2008 at 12:09 pm
Thanks for your input guys!
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August 18th, 2008 at 1:00 pm
any one want to comment on the dollar or uup?
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August 18th, 2008 at 2:03 pm
The dollar/gold. Both the dollar and gold have had significant inverse moves in the past month. Gold has fallen below the december 2007 base from where it began its move towards 1000+. It is up today and at some point will need to consoliodate at that level for a period of time.
The dollar is the inverse. There needs to be a consolidation period for the enormous move that was highlighted by the largest daily and weekly increase in the dollar index in a decade. As a trader, I believe in the long term the dollar’s bottom is in, as Europe has ceased raising short term rates. Eventually the dollar will continue to build upon it’s recent rise, and gold’s top is in, and should continue to slowly fall in the months ahead.
Look at the charts for both of these on a 5/10 year basis and in a linear format to help guide your decisions.
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August 18th, 2008 at 2:04 pm
Gold’s consolidation should be around the base of ~ 810.
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August 18th, 2008 at 2:17 pm
thanks for commenting michael.
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August 18th, 2008 at 3:11 pm
Selloffs don’t need high volume for confirmation.
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August 18th, 2008 at 3:16 pm
Sean, you’re welcome and thank you for the kind words!
Pat, you are very right. And when you consider how high the existing short interest is, a substantial move lower could occur on light volume. In other words, most players are already short, so a selloff may result from a mere absence of buyers, as opposed to short-sellers hammering the market lower.
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August 18th, 2008 at 3:28 pm
Does anybody know a free simulation trade service for trading futures? Thanks, Jack
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August 18th, 2008 at 6:44 pm
Craig or any other expert chartist out there:
I have a nice fundamental and momentum play in Alexion (ALXN). Do you see this as a runaway gap?
http://finviz.com/quote.ashx?t=alxn
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August 18th, 2008 at 8:13 pm
Hi Sean, Thank you so much for the information. I will check with my broker to see what they can offer.
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August 20th, 2008 at 9:25 pm
Mohan, sorry for the late response, but I think this ALXN is interesting. I am going to keep an eye on it. Let’s see if it holds the 89.50 level. The volume was nice on the breakaway.
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