These Charts Are Screaming At Me…Here’s Why

  • April 14, 2003
  • Derrick Hobbs


The 60-minute charts of the broad indices
and sector ETFs are screaming at me tonight. I’ll use the E-Mini S&P and Nasdaq
contracts to illustrate what I’m looking at.

First, below we are looking at the
S&P E-Mini contract (ES03M).

  1. We have an
    immediate resistance zone from 886.75-889.00. If that small resistance zone is
    cleared this contract is likely to make a quick move up to 893 to 897.

     

  2. If this contract
    hits the 894 level, we have two bearish patterns that complete.

    a. From X1 we
    have a Bearish Gartley (outlined in red)

    b. From X2 we
    have a Bearish Butterfly (outlined in grey)

So, there you go
key price decisions for tomorrow’s activity. Personally, my plan is this:

  1. If 889 is
    cleared, I would consider a long “scalp” trade up to 894.

     

  2. The bigger
    opportunity in my opinion based on this chart would be to look for short
    trades against the 894 to 897 level based on pattern completions. My stop
    would be just above 897 if a short is initiated.


Next, we have the
Nasdaq E-Mini 60-minute chart
(
NQ03M |
Quote |
Chart |
News |
PowerRating).
Again, a similar situation. Basically, I’m waiting for this contract to hit 1066
where it officially completes the Bearish Gartley pattern. I look to go short
and my stop would be above 1079. Now, if we clear 1079, there is a large Air
Pocket that could provide the nimble trade an opportunity to go long with an
objective up to the next Fibonacci resistance zone up around 1105.


Try not to have a
“taxing” evening!

Derrik Hobbs