Luna $ Ticks

October 5, 2008

Until Proven Otherwise

Filed under: Trading SPX SPY — moontrader @ 7:18 pm

Trend remains down. Although we had quite a drop this week, going down on Monday’s opening and closing near the low of the week on Friday, I still don’t see a sign in my charts of a reversal, not even a short-term one. Do you know that feeling that you have when you taste the stuff you’re cooking and there’s something missing? Well, Friday’s action left me with that feeling throughout the whole weekend. I said in a comment in Friday’s post that usually, as we approach a date we projected using Spiral Calendar, there’s some sort of clue of a reversal, something like a MACD delta getting close to zero or Stochastics pointing up. Even the nature of my post Friday – widening the time window – is an indication that calling a short/medium term bottom would be premature.

SPX is well down: Friday’s close is below the three DMA’s, while Stochastics and MACD are pointing down. The only hint of a bounce is DPO, which seems to be oversold. But obvously, I wouldn’t place a trade based on that.

I added a zoom to show Friday’s top just below DMA 3×3.

Other sectors

TRANS was badly beaten on Thursday, trend still very down (Stochastics and MACD), but seems to be oversold (DPO) and close to an important support level, suggesting that a bounce might be coming. I wouldn’t short TRANS right now or do anything with it.

UTILS is just going down, no reversal in sight yet. NASDAQ the same.

Here a couple of interesting things:

Although the bailout plan has passed, VIX suggests there’s been absolutely no improvement in the overall market sentiment. And Treasuries are back below our three DMA’s while its MACD is on Zero level and delta is negative, and Stochastics pointing down.

And finally, the only chart which might be up for a bounce up: the AMEX index.

But I wouldn’t bet on it. It’s just that Stochastics is close to zero, MACD is in negative territory but delta is almost zero and Friday’s close is near DMA 3×3. I wouldn’t trade on it as well.

My conclusion is that the trend remains down but I’m not confident right now in placing a trade on either side. Spiral Calendar date projection points to some sort of reversal but not my indicators. When this happens I prefer to stay in cash and just watch, letting the money I made in the last week settle in my account and waiting for a better entry point when I have a more clear view on what’s going on.

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3 Comments »

  1. We have to admit Spiral Calendar date projection has failed us!
    please return your Spiral Calendar book to the author immediatelly and demand a refund! ;-))
    just kidding :p

    Comment by Fork_Master_Serg — October 5, 2008 @ 11:51 pm | Reply

  2. Really, Fork. As I said before, I have a date towards the end of October, but I didn’t expect such a fall today. I wonder to what extent the market has been affected in the last week by the changes of rules. I’ll keep watching until I see a good entry point.

    Comment by moontrader — October 6, 2008 @ 6:33 am | Reply

  3. >I didn’t expect such a fall today

    but the Moon whent to Capricorn(cardinal) on Sunday
    http://www.safehaven.com/article-11461.htm

    Comment by Fork_Master_Serg — October 6, 2008 @ 3:06 pm | Reply


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