Zone Awareness
We
start the week with early red futures, which
is good in order to take the major indices lower into a more tradable reflex
level. Plus/minus four calendar days around the Sept. 21 cycle date will most
often see a reversal with very high probability. That is not subjective, but
based on historical fact around such cycle times as those that fell on July 24,
Aug. 22, and now Sept. 21. This coupled with the awareness zones outlined last
week puts you on alert for any strong intraday reversal patterns, such as 1,2,3s
and RSTs.
The daily chart is
certainly closer to this condition as opposed to being able to sell short on a
retracement to a declining longer-term moving average or even the 20-day or
50-day EMAs. On the daily and weekly charts, until you see the Change in
Direction bar, there is no change in direction.
The weekly chart reads
continued down, while the daily chart had a narrow-range bar as the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) churned in the 840 – 845 zone all day on Friday, closing at
845.39. This morning’s red futures certainly will take out the 839 Friday low if
they hold red through the opening.
Triple Witch program
action saw NYSE volume reach 30% above average on Friday at 1.8 billion, a
volume ratio neutral at 55, and breadth at +152. Friday was not a trader
friendly day based on the early down, then sideways action, as most traders
wasted their time playing the guessing direction game into expiration.
The Dow Jones awareness
levels today are 7867 and 7863. For the SPX they are 831, 830, 829 and 827
twice, so there is a confluence.
Have a good trading day.
Five-minute chart of
Friday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Friday’s NYSE TICKS