Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

NDX, S&P 500 Trading, Exciting Options Expiry Week

Stock-Markets / Stock Index Trading Jan 17, 2010 - 02:22 PM GMT

By: Piazzi

Stock-Markets

Best Financial Markets Analysis ArticleWhat a week!

This was one of most exciting OpEx weeks that I remember for months – all sorts of crazy price actions on and off hours.


The week had some real curve balls. It’s been bandied about that the bond auction weeks are manipulated lower so that bonds can sell better, well, Thursday was 30-yr bond auction day and any trader who went against the market hoping downward manipulation got it handed to him on that day. It’s a popular belief that an uptrending market roars on higher in an OpEx week. Anybody who banked on that got chopped up and down for the entire week.


S&P had a price range of 20 points for the week but ended -8 points – basically flat. NDX did more poorly and ended -28 points out of weekly range of 45 points - no bullish bias for statistical traders.

We stayed more with our price levels than statistically shaped popular beliefs.

For NDX, I had specified resistance at 1890+

NDX tried a number of times to get past resistance but was rejected each time.

Notice that RSI is at a level that has provided a support shelf for short term momentum since mid-November. Price is sitting on 21 EMA, which has held every pullback since November.

Also notice that MACD did a cross, and RSI, after carryover rally from last year, could have not been able to make it past 70.

For the week, NDX had a number of down days on expanding volume.

If it wants to blast higher from here it should do soon. Further weakness may cause enough damage to the weekly technicals to change trader’s psyche from rally to correction, and, where the psyche turns, price follows.

So, the 1890+ level of NDX offered excellent short entry to traders all week

I had also specified a number of actionary levels for NDX, namely, 1886, 1867, 1850

The actionary levels did well, especially the lower 1850 area that held the drops and offered good long (short cover) entry for trading purposes.

NDX is not broken, but looks wounded. We may have a top, or it may be just setting up for a 5th wave. A sustained move below 1850 will increase the odds of top being in, targeting 1810 area as a first level of support. I810, by the way, coincides with 55 daily EMA at this time. A move and hold above 1890 may fetch a sizeable short-covering rally.

NDX breadth, as measured by McClellan set of oscillators looks soft and in need of urgent reinforcement i.e. money to bid things up

In the Wednesday’s post, I had said

OpEx week is not over yet. But I find it hard to believe there are many shorts still in the system. If not, then either buyers bid it up on their own, or market finds a price and then drift sideways into expiration.

In Thursday’s post I said

I guess bulls ran out of shorts to ride up today.

Friday’s action was in line with our way of thinking about short-squeeze rallies.

Well, there must be quite a few shorts in the system now. Looking back at 60-min chart, and the Arms Index, NDX is oversold enough to fetch, at least, a bounce early next week if the uptrend is still good and healthy. That may happen after some residual selling. So, I’ll keep an eye on 1850 area (give or take a few points) and see if index holds it for a bounce, and if so, we’ll see if 1890 craters or not.

----------------------------------------------
S&P had a flat week

Overall, it’s been less volatile than NDX. It’s been holding well, so far, after breaking above the 2007 downtrend line

Index had two distribution days last week. It is sitting on an uptrend line from March 2009, and on its 21 EMA that has provided support since mid-December.

S&P’s breadth as measured by McClellan group of oscillators look neutral

Short term frame is quite oversold

Index is inside the 1133 pivot area, and supported by 89 EMA of 60 min frame. As long as 1133 pivot area is not broken, index has a chance of gathering itself and doing a bounce. A break of 1133 pivot will target next pivot at 1107. A break below 1133 pivot area will likely turn the short term trend down. A break below 1107 pivot area will increase the odds for a change in mid-term trend.

To the upside, we have the 1168 pivot and my range target of 1185. S&P’s performance after the range break has been very disappointing in the sense that it could not reach the range’s first target (NDX got there with no problem).

I have two trend lines (in pink) which I think are important in the hours and days ahead. They, coincidentally, provide immediate support around 1133 and 1107 which we just discussed.

I may trade the levels I just discussed on S&P and NDX, but, at this moment, I have no desire to establish a long index position to hold.

Long term trend is up. Mid-term trend is up. Short term trend is up (a break below 1133 may change that)

Support is at 1133. Resistance is at 1168.

Enjoy the Rest of Your Weekend!

By Piazzi

http://markettime.blogspot.com/

I am a self taught market participant with more than 12 years of managing my own money. My main approach is to study macro level conditions affecting the markets, and then use technical analysis to either find opportunities or stay out of trouble. Staying out of trouble (a.k.a Loss) is more important to me than making profits. In addition to my self studies of the markets, I have studied Objective Elliott Wave (OEW) under tutorship of Tony Caldaro.

© 2010 Copyright Piazzi - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in