click charts to enlarge
There appears to be levels of resistance at or near the current price of the stock indices. We have included charts of the cash S&P 500 to help illustrate. The charts were prepared early on Thursday October 22. What they show are major trend line resistances and also the .500 Fibonacci retracement.
The action of this week has been interesting to say the least. New highs on Tuesday followed by heavy selling pressure on Wednesday but strong recovery on Thursday. Friday morning has seen selling pressure reemerge even with positive earnings news from Microsoft, Amazon and others. It looks like the willing sellers were satisfied selling to the “news” buyers.
Here is an approach we suggested in our weekly Trade Focus written yesterday (Thursday) afternoon:
S&P 500 (Dec. Emini) -- Last week we ended this section saying that the next level that may serve as an objective is the .500 retracement from the October 2007 high to the March ’09 low which is approx. 112625. We do not see a long entry suitable for this near of a possible objective. Certainly it could go beyond but we will watch for developments that are more indicative. We do, however, believe that if this “bull run” is nearing an end that short entries can be initiated with intraday penetration of 106625 or with a close at or below 106925. Suggested stop protection for this short entry approach should be intraday penetration of 110275. We believe another short entry approach for new or additional short entries would be with a close at or below 101150. If this short entry approach is elected we believe stop protection should be intraday penetration of 105725. We will update retracement levels following additional pattern development.
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www.cbandsbrokerage.com
Good trading
Jeff and Diego
CB&S Division
MF Global Inc.
312 261-7380
800 321-5810
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
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