MKTstate

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.

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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.

Monday, May 10, 2010

EURUSD - FRESH MEAT

Technically the MKT is in a NEUTRAL CORRECTIVE state producing a positive signal against a negative trend. Opportunity exists on both sides of the MKT however the threat of the return of the negative momentum must be respected as a good probability with all trading below the 12946 Inflection Pivot.

On the SELL side accept BREAKOUT, FADE and REVERSAL strategies off major inflection points with the expectation that the negative momentum is going to resume. REVERSAL strategies are recommended over a FADE at the 12819 and 12946 levels, which should have at least 1 if not 2 challenges to its integrity before executing a short sale against it. BREAKOUT strategies below the 12692 support pivot can risk a little more if current events and other MKTs of confluence confirm a negative posture with the expectation that the negative trend is going to resume. If not a better approach would be to FADE a positive "squeeze" reaction against 12819 after a negative breakdown as the neutral technical position can keep the trend sideways.

On the BUY side avoid FADE strategies off 12692 until after the previous session high point or major resistance has been taken out to confirm a break in momentum. Until then a better opportunity will be a REVERSAL strategy but only off the 1st major support 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 CORRECTIVE signal any weakness is just a "head fake " before it follows through. BUY BREAKOUT strategies above 12946 can be profitable but they are aggressive and should look to take profits and potentially REVERSE short at resistance targets. The trade is corrective and the eventual play is a resumption of the negative momentum.

Note: The MKT is in a corrective position with the potential to produce a sharp short covering rally, a messy sideways digest or a resumption of the negative trend. 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. If you have > 3 losses consider reversing strategy.

JS

Join our "LIVE" TRADE ROOM and learn JS Services Strategy Based Trading approach using CLEARBOX automated strategies! For more information please contact me at info@jsservices.com. You can also visit http://www.jsservices.com/ and sign up for a Complimentary FREE Trial.

Thursday, May 6, 2010

10YR T-NOTE Futures - BULL TREND EXTREME

** BULL TREND EXTREME **- Technically the MKT is at the positive extreme and is flirting with an exhaustive turn. Keep your dancing shoes on this Technical State has the potential to get a little wild.

Key off the 120-06 Inflection Pivot today for an indication of the session tone. All trading below here keeps the contract vulnerable to a retreat.

On the SELL side accept REVERSAL strategies off 120-25 and 121-215 resistance levels should work on the initial break in momentum if they are going to. BREAKOUT strategies below 119-19 are aggressive but do have the potential to be the start of a corrective turn, so look to get in early on the initial break in structure. Lock in any unrealized profit on these strategies, as the underlying momentum remains positive. 118-13 and 117-15 are the lower targets.

- On the BUY side accept FADE signals off the 119-00 and 118-13 major support levels after the 2nd or 3rd confirmation. The MKT is extended and may need to digest a bit before it produces a positive push. REVERSAL strategies are valid off all major support inflection points as well as the 119-19 support pivot, with the expectation that the underlying positive tone will try to assert itself. The outlook after a REVERSAL signal will be more firm digestive than positive trend. BREAKOUT strategies above 120-06 and 120-25 should just go, so keep stops and position management tight. If not the likelihood of a sideways trade developing is high.

Note: The MKT is extended and any push to new move highs is not expected to be sustained. Emotional trading conditions are expected.

Wednesday, May 5, 2010

USDJPY - CORRECTIVE SIGNAL = OPPORTUNITY

Technically the MKT is in a NEUTRAL CORRECTIVE state producing a big negative signal against a positive trend. Opportunity exists on both sides of the MKT however the underlying positive tone will maintain the controls above the 9350 Inflection Pivot.

On the SELL side avoid FADE strategies against 9493 until after the previous session low point or major support level has been broken to confirm a negative shift in momentum. REVERSAL strategies should be avoided as any positive signal is more likely an indication that the underlying trend is going to resume. SELL BREAKOUT strategies below 9350 can be profitable but they are aggressive and should look to take profits and potentially REVERSE long at support targets. The trade is counter trend so avoid any negative commitments.

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 at the 9350 level, which should have at least 1 if not 2 challenges to the support integrity before executing a long off it. BREAKOUT strategies above 9493 can risk a little more if current events and other MKTs of confluence confirm a positive posture. If not a better approach would be to FADE a negative "squeeze" reaction down to 9422 after a positive breakout signal above 9493 as the neutral technical position can keep the trend sideways.

Note: The MKT has produced a big technical signal against the current trend. Be aware that the negative action may be a 1-day event with the positive trend quickly re-establishing itself. If the MKT is really going to turn it should remain hard pressed and provide little or no relief.

Tuesday, May 4, 2010

SP500 - VULNERABLE

The SP500 broke out to the down shifting into a BEAR TREND ACCELERATION technical state. If the negative signal is going to follow through the Index will not do much if any trading above the 1173.75 Inflection Pivot.

This is the price point which will determine today's bias. Below here the pressure stays on high targeting 1156.50 and 1146.50 on any new weakness. Use caution. Although reactions are expected this sell off does have the potential to flush down to 1131.50.

A held trade above 1173.75 takes the edge off for a difficult trade up to 1183. If the MKT is going to fall back into a soft sideways trade any show of strength will fizzle here. If not a play for the 1202-1199 resistance band is the outlook. Expect no follow through.

Note: The MKT produced a major negative technical signal which should at least produce a new move low. If not it is an underlying sign of strength that will foreshadow a resumption of the underlying positive momentum targeting 1225.