Luna $ Ticks

October 17, 2008

Down Hill

Filed under: Trading SPX SPY — moontrader @ 7:12 pm

Today was one of those very rare days that the market does exactly what you think it would do. I just got a little tense during the opening, but my apprehension vanished after mere 5 minutes. Ok, let’s go to a simple chart, more or less the same that I showed yesterday, updated:

What I see here is just great. Notice today’s bar: the market rallied almost up to DMA 7×5, and then in the last couple of hours it erased all the gains today, closing back below DMA’s 3×3. Stochastic is still up, but forget about it. MACD is still negative and, on Monday, DMA’s 3×3 and 7×5 are converging. This is a great combination and it tells me there is a good chance of a big drop on Monday. Notice also that for two consecutive days, SPY closed on top of the weekly pivot.

In this next chart you can see where today’s rally stopped:

A perfect Fib retracement! The only thing that concerns me a little bit is that SPY closed just above a Fib. So, Monday the market can even open higher, but I don’t think it’ll go far up. In any case, today’s high could be a reasonable stoploss.

That’s all. Have a great weekend.

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15 Comments »

  1. You trade or just draw charts? Post some unless you aren’t able.

    Comment by boss — October 18, 2008 @ 5:32 pm | Reply

  2. MoonT, are you going to short the Airline sector, when OPEC meets this week? ( they are expected to slash production)

    Comment by zee http://z-stock.blogspot.com/ — October 18, 2008 @ 10:47 pm | Reply

  3. Right now all my signals are kicking on all 8 cylinders__ ( working perfect) that’s why I haven’t done too much cruising around the blogs. I’ll be back.

    Comment by zee http://z-stock.blogspot.com/ — October 18, 2008 @ 10:50 pm | Reply

  4. ES Z8 pitchfork, 60 minute chart:

    http://www.screencast.com/t/XaOFNQdiO

    A few notes:
    1) ES has formed a triangle (red lines).
    2) Yellow line is short-term uptrend.
    3) Blue lines trace out Andrew’s pitchfork.
    4) The green line is a 1/4 point line from an Andrew’s pitchfork. Notice how it has tested that line and retraced each time.

    If ES falls and fails to bounce off the blue line look for it to drop to at least the red line. If that breaks then we are potentially in play for a test of the 2002-03 bottom.

    In addition to the above chart. Two ES Z8 pitchforks which might give us further guidance:
    http://www.screencast.com/t/2VUfbplV

    Comment by Hansons — October 19, 2008 @ 1:55 pm | Reply

  5. Boss, once in a while I post a trade. But the main focus here is not the trades, this is more about identifying trends and good entry points.

    Comment by moontrader — October 19, 2008 @ 2:23 pm | Reply

  6. Zee, I trade basically SPY options. What do you use to trade the Airline sector?

    Comment by moontrader — October 19, 2008 @ 2:25 pm | Reply

  7. Hansons, great charts. So, it looks like we’re up for a little bounce here, isn’t it? I’m still pretty bearish for this week.

    Comment by moontrader — October 19, 2008 @ 2:30 pm | Reply

  8. Moontrader, like you I’m bearish early week. If interested check out this pitchfork website: http://www.xoods.com/

    Comment by Hansons — October 19, 2008 @ 8:03 pm | Reply

  9. Moon,
    SDS is the double inverse of SPY. Any reason you dont like it?

    Comment by Rainman — October 19, 2008 @ 9:36 pm | Reply

  10. Rain, nothing against ETF’s. The thing is, in markets like this, when you have a certain confidence in an edge and are willing to take the risk, options can give you a lot more.

    Comment by moontrader — October 19, 2008 @ 9:47 pm | Reply

  11. Moontrader, I’m sticking to your OCT 10th Lunar chart for when this election rally gets going. I like the end of OCT. That seems like the right timing. Most of the stocks are so buried right now, I think it takes about that long for them to get going again.
    P.S.
    Can you change this comment section to narrow. Wide is too hard to follow. Thanks in advance or you can tell me forget about it.

    Comment by zee http://z-stock.blogspot.com/ — October 20, 2008 @ 1:28 am | Reply

  12. Zee, what you mean to change the comment section to narrow? What browser do you use?

    Comment by moontrader — October 20, 2008 @ 6:26 am | Reply

  13. Terrorist Bernanke with ticking time bomb attached to his chest
    http://news.google.com/news?imgefp=sQ_SBzG21PQJ&imgtype=1

    Comment by TObject — October 20, 2008 @ 11:20 am | Reply

  14. Hi,

    I am feeling today is a up hill day. I am watching that SPY held up 961 well, and now is 966. DO you think it’s time to cover?

    Comment by David YZ — October 20, 2008 @ 12:35 pm | Reply

  15. David, today is up hill, yes. At least so far. I increased my short position a couple of minutes ago.

    Comment by moontrader — October 20, 2008 @ 12:50 pm | Reply


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