MKTstate

Wednesday, May 19, 2010

GOLD Futures - HOW'S THAT LEVERAGE FEEL NOW?

Technically the MKT is in a NEUTRAL CORRECTIVE state producing a negative signal against a positive trend. Opportunity exists on both sides of the MKT.

Key off the 1212.80 Inflection Pivot for an indication of the session tone. Below here yesterday's negative signal remains in play.

On the SELL side avoid FADE strategies against 1207.2 and 1212.8 until after the previous session low point or major support level has been broken to confirm a negative shift in momentum. Until then a better opportunity will be a REVERSAL strategy but only off the 1st major resistance level. This is a one shot trade using a low risk big profit target criteria. The idea is that if the MKT is going to follow through on its negative signal any strength is just a "head fake " before it follows through. SELL BREAKOUT strategies below 1185.6 can be profitable but they are aggressive and should look to take profits and potentially REVERSE long at support targets. The trade is corrective and the underlying positive tone must be respected.

On the BUY side accept BREAKOUT, FADE and REVERSAL strategies off major inflection points with the expectation that the positive momentum is going to resume. REVERSAL strategies are recommended over a FADE strategies off the 1185.6 support pivot, which should have at least 1 if not 2 challenges to the support integrity before executing a long off it. BREAKOUT strategies above 1212.8 can risk a little more if current events and other MKTs of confluence confirm a positive posture with the expectation that the Bull Trend is going to resume. If not a better approach would be to FADE a negative "squeeze" reaction after a positive breakout signal at 1196.9 as the neutral technical position can keep the trend sideways.

Note: The MKT is in a corrective position with the potential to move in either direction. Keep your opinions to themselves and focus on what the MKT is telling you it wants to do. Don't fight it, roll with it.

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Tuesday, May 18, 2010

NAT GAS Futures - TRYING TO MAKE A DIFFERENCE

Technically the MKT has produced a major positive technical signal which remains in play with all trading above the 4.252 Inflection Pivot. A higher close today will confirm the signal and have the potential to influence the trade for the next 3-8 days.

On the SELL side BREAKOUT strategies below 4.252 are very aggressive and should be executed higher than lower. Expectations should be that yesterday's positive signal was exhaustive and a sharply lower reversal signal is due. Don't take the signal otherwise as any setback should be looked at as a buy opportunity. If the MKT is going to turn sour, it should be quick and relentless. Avoid FADE strategies against 4.492 as the MKT has just produced a major buy signal and fresh gains are expected. REVERSAL strategies as well are not recommended, as any resistance level violation that cannot be held is more likely a squeeze for the longs, which can quickly turn positive. The SELL side today is a dangerous place to be.

On the BUY side BREAKOUT, FADE and REVERSAL are recommended as the MKT is aggressively bid and all buy signals are valid opportunity. If stopped out at or near the low tic of a reaction and the MKT is not following through to the downside, leverage up using the squeeze low as a stop, expecting a quick reaction back above your original entry. If so stay with the position with the expectation of a play for new move highs. Look for pportunity off 4.252, 4.372 and 4.492.

Note: The MKT has produced a significant positive technical signal that has the potential to produce a fundamental shift in sentiment. Expectations are for steady gains after at most, one pullback. A laborious trade and the MKT may wait till the end of the session to make its move.

Monday, May 17, 2010

British Pound Futures - EXTENDED

Technically the MKT has produce a negative signal into the EXTREME of a BEAR TREND move and will need to hold structure below the 14631 Inflection Pivot if it is going to maintain an aggressive sell posture. Don't press it. Although the MKT is vulnerable a break in momentum has the potential to spark a sharp corrective rally.

On the SELL side downside BREAKOUT strategies below 14359 are valid and should continue to hold negative structure if they are going to extend. Get in to these trades sooner (higher) than later (lower) as new weakness is expected to be stop and go. A more conservative strategy is to FADE a positive reaction after a negative breakdown signal against the 14495 Directional Pivot and even better to wait for a negative REVERSAL off this corrective rise rather than stepping in front of it. FADE and REVERSAL are recommended at the 14631 and 14916 resistance levels especially after a sharp corrective rise. The MKT is negative but is also extended and the probability of a corrective rise is high. Wait for an exhaustive signals or confirmation to jump on.

On the BUY side BREAKOUT strategies above 14631 should have aggressive trail stops and tighter profit targets at 14746 and 14916. There is a good chance for a corrective turn but profit targets and position management should be tight as this is more likely a rally to sell. If you get on, ride it until structure is broken and then look to go the other way. BUY REVERSAL strategies will provide opportunity off of lower support inflections but will work best after a sharp trade lower through major support. Look for opportunity at 14359 and the 14245 and 14116 support levels. Expectations are for no follow through not a reversal of sentiment. Keep risk management and profit targets tight to reduce giveback as the underlying technical foundation today is negative. Avoid FADE BUYS as the negative trend remains enforce with sell FADE opportunities the better place to step out.

Note: Just because the MKT is extended does not mean it cannot get more extended. Any long ideas should wait for a signal don't force one.

Saturday, May 15, 2010

SP500 Futures - TASTE TEST

Technical indicators shifted negated after Friday's sell off but the underlying technical structure remains positive above 1121.50. As long as the June'10 contract is above this price point the sentiment bias is to the upside. A breach of the 1143.50 resistance pivot will confirm this targeting 1197 on the next reaction higher.

Key off the 1132.50 Inflection Pivot for an indication of the sessions immediate tone. Use this as an "over under" number today. Above here the MKT will be leaning positive and below negative with 1143.50 and 1121.50 the neutral Critical Range extremes. Only a breach of either extreme will signal the next trend move.

Expectations are for any positive move to be more of a "railroad" trade with sellers "scaling in" feeding a one way trade with only minor reactions.

A break under 1121.50 is expected to be more emotional with sharp sell-offs followed by positive price squeezes. As long as the MKT is below 1121.50 the potential for a release will remain a threat.

The price points presented define the behavioral shifts in market sentiment. Use them as an overlay to your outlook.

Good Trading

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Thursday, May 13, 2010

WHEAT N'10 - SENTIMENT SHIFT

Technically the MKT is in a BEAR TREND ACCELERATION and flirting with the lower extreme. The MKT has produced a big negative signal and any positive corrective action is expected to be short lived with only one upside "stop sweep" if the negative moemtnum is going to play out. Any held strength and repeated probe higher is a sign that the trade will turn digestive. This does not take away from the negative bias but does limit the profit potential for any new sales in the session.

Key off the 495-6 Inflection Pivot as the high point fo rany corrective squeeze. Sell strength below here.

On the SELL side accept FADE, REVERSAL and BREAKOUT strategies below the previous sessions high point and against 495-6. BREAKOUT strategies below 476-2 may need to be "worked" as the MKT is on edge and will be emotional, producing some starts and stops before it drops. FADE strategies are recommended over REVERSAL strategies against 489-2 and 495-26as the MKT is expected to hold lower structure and any momentum shift should be considered a potential positive corrective turn.

On the BUY side avoid REVERSAL strategies off major support levels as these signals are more likely short squeeze rallies and opportunities to SELL into and FADE. BREAKOUT strategies above 489-2 above the previous session high are a long shot, so risk less and go for more. Any BUY FADE off the 476-2 support pivot should have confirmation and are not recommended if the integrity of the previous session high is intact. After a break in the negative structure confirmed support levels can be used for short term reactions using aggressive position management.

Note: The MKT is on edge and is vulnerable to a big drop. If the previous session high is intact its just a matter of time before the sellers try to overwhelm the MKT. Look for excuses to get short. If the previous session high is breached opportunity will be on both sides of the MKT, however the bias still rests with the Bears.

Wednesday, May 12, 2010

S&P Mid Cap 400 Index - PROVE IT

Technically the MKT is in a BULL TREND ACCELERATION posture and has produced a big positive signal. The MKT is in "play" and aggressive action is expected off of technical signals. Anticipate opportunity and position management adjustments, as quick price action is likely.

Key off the 796.20 Inflection Pivot as the low point for any pull-back squeeze and the 818.10 resistance pivot as a trigger to a further gains.

On the SELL side REVERSAL strategies can be executed off 818.10 and the 832.70 resistance levels. Expectations should be for an immediate exhaustive turn with the MKT quickly moving away from the area. A gradual decline folowing a reversal signal and it more likely just a pause before another round of buying, so in either scenerio keep position management tight. Avoid SELL FADE strategies even with confirmation, as this is more likely a lid for a BREAKOUT BUY strategy. SELL BREAKOUT strategies below 803.50 are not recommended but can be used as a signal for a FADE against Directional reisstance at 810.80.

On the BUY side accept FADE, REVERSAL and BREAKOUT strategies above the previous sessions low point. BREAKOUT strategies abive 818.10 should just "go", so do not risk much. Be wary of these strategies early in the session and look to exit on the 1st break in strucutre. BUY FADE strategies at 803.50 and 796.20 are recommended over REVERSAL strategies as the MKT is expected to hold higher structure and any failure should be considered a potential negative corrective shift. The MKT is aggressively bid which should keep pace throughout the session if the TREND ACCELERATION forecast is going to play out.

Note: The worst-case scenario for a MKT in this technical position is to go higher early in the session and then break all day. Be alert to recognize this. If you have > 3 loser long trades consider taking the next sell signal anticipating a corrective turn. Remember in this technical position if the MKT is going higher it should just go. If not there is the potential for a corrective break or digestive trading environment.

Tuesday, May 11, 2010

EURGBP - NOT SO FAST

Technically the MKT is in a BEAR TREND but in a DIGESTIVE position. The probability is to the downside but there is opportunity on both sides of the MKT.

Key off the 8539 Inflection Pivot for an indication of the session tone with 8647 the high point for any upside squeeze.

On the SELL side BREAKOUT, FADE and REVERSAL strategies are valid with the expectation that the underlying negative momentum is going to reassert itself. Work any FADE or REVERSAL strategies within the digetive range, covering any position near the extremes. BREAKOUT strategies are valid however they may be choppy and more laborious. Work any position, covering on emotional sell-offs and re-entering on any sharp pullbacks. The probability is to the downside today but is not a day to press it.

On the BUY side avoid BREAKOUT strategies but rather FADE a negative reaction after a positive breakout signal. REVERSAL strategies are recommended over FADE strategies off major support inflection points as "sloppy" trading conditions are expected. Position management adjustments should be anticipated for all longs as the underlying negative tone can quickly reassurt itself and erase profits.

Note: The MKT has an underlying negative posture but there is the potential for a positive transitional move. Don't get stubborn if the MKT starts to get into trend mode in either direction as the contract may just be expanding its digestive parameters producing a one way trade into the close and new extreme.