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Hello,
Welcome to
Stock
Market Trading
the new look newsletter for
2011 from Traders
Day
Trading & Kenny's
Elliott Waves Blog.
*****
S&P 500 Cash Index - The
Week Ahead
The
Week That Was...
Another week, another weekly Doji
candle.....the third in a row.
The various trend lines
were
eneough to provide support and allowed the bulls to recover 1325 on the
first test, but did close under 1337 for the week resulting in a doji
candle on the weekly chart.
It
should be no surprise as Doji candlesticks are a sign of indecision
and that mood was clear towards the end of the week.
Last week I was looking for confirmation of the trendline breaks and
some continuation.....My comments on the forum and in Kennys Blog on
Tuesday night, suggested that the S&P500 cash quotes should hit
1305 overnight after closing at 1316....
"Reckon
there is a good chance that quotes hit 1305 before the open tomorrow."
"Going
to stick my neck out a bit here and say that 1305 should print
overnight and we could be quite a bit lower than that before the
open......"
....quotes then fell sharply to hit 1305.1 overnight to hit my target.
But
contrary to my longer term analysis, the support there was much
stronger than expected, and quotes then pinged all the way back up to
close the futures opening gap before normal market hours. Cash then
went on to close higher on the day.
The
Week Ahead...
So where does that leave us for the week
ahead?
Keeping it simple on the
larger scale of
things, what we had this week was a break and consolidation below
1337....Monday, Tuesday and wednesday then became all about 1325 and
the
channel trend lines supports.
The
questions for us to seek answers to this week are, did the
break of 1337 seal the deal, and how much support was built up from
holding the trendlines? Enough for another run at the highs?
The market remains within the clearly defined down sloping price
channel
from the 1370 high. Prices decicively broke support and has been
back testing the break of the long term rising price channel.
The support at 1305 and recovery back above 1325 does now cast some
doubt over the validity of the break, and does open the possibility of
that run at the highs I mentioned last week.
|
| Pivots |
Monday |
Weekly |
Monthtly |
| R3 |
1345.75
|
1371.48 |
1480.68 |
| R2 |
1338.37 |
1348.66 |
1410.82 |
| R1 |
1334.73 |
1339.88 |
1387.21 |
| Pivot |
1330.99 |
1325.84 |
1340.96 |
| S1 |
1327.35 |
1317.06 |
1317.35 |
| S2 |
1323.61 |
1303.02 |
1271.10 |
| S3 |
1316.23 |
1280.20 |
1201.24 |
| Current |
Week |
Month
 |
Year
 |
| Open |
0 |
1365.21
|
1257.64 |
| High |
0 |
1370.56 |
1370.56 |
| Low |
0 |
1311.80 |
1249.05 |
| Range |
0 |
58.76
|
121.51
|
| Previous |
Day
|
Week
|
Month
|
Year
|
| Open |
1327.24
|
1333.07 |
1329.48 |
1116.56 |
| High |
1334.62 |
1334.62 |
1364.56 |
1219.8 |
| Low |
1327.24 |
1311.80 |
1294.70 |
1011.40 |
| Close |
1331.10 |
1331.10 |
1363.61 |
1258.84 |
| Range |
11.33
|
28.31
|
69.86
|
208.4 |
Key
Support and Resistance Levels
|
1381 |
Top?
|
1370 |
|
1360 |
|
1353 |
|
1344 |
| High? |
1340 |
|
1337
|
|
Current |
1331 |
|
1326 |
|
1322
|
|
1319 |
|
1312
|
|
1310 |
|
1305 |
|
1303
|
|
1298 |
|
1293 |
|
1288 |
| Low? |
1273 |
|
1268 |
|
1257 |
|
1249
|
|
1225 |
Bold
Numbers = Stronger Support and Resistance
Trade Set
Ups for the Week Ahead
Last weeks trade entries were not filled.
The open
position trades are currently running at 39 and 26 points in profit.
This may feel like an important point where it may be prudent to bank
profits on long term trades, but it is important to distinguish between
the different time frames for each trade.
Despite the short term
confusion, the longer term analysis remains intact for now and there is
no real reason to bank the trades other than for emotional
or money management issues...ie, fear of losing some of the potential
profits already
there....at the same time, I do not want to succumb to greed by holding
on to trades that are wrong, and I did not expect that the market would
still be up here at the end of the week..
With this in mind, the issue is
then to decide where the point is that the analysis becomes 'wrong'.
That is not quite so clear cut, as we can all see what we want to see,
and for every 10 technical analysts that you ask, you may well get 20
different
answers to that question.
As ever, we will trade with no emotions, instead, relying on the
analysis and money management strategies to do what they are designed
to
do.
Stop loss levels on both position trades should now be lowered to 1347
NB: As beforeThat is not to say that 1347 can not be broken before
reversing
again. It would just mean that the Blue wave count was negated, and I
would want to lock in some profits on those trades, until it becomes
clearer what is going on....if it happens.
Rightly or wrongly, rather than going on the defensive here, by using
the
analysis and money management strategies, I am going to trade this
agressively. These points of confusion often result in very strong
trending moves, and I do already have enough profit in this campaign to
allow me to attack it with very little risk.
In real time trading, I may become less optimistic if price breaks up
through the declining price channel but for the purposes of my strategy
here with only a weekly update, it is all about getting the numbers to
add up to a sensible trading plan.
******
NOTE:
For this format I am using a 10 point stop loss on the weekly trade set
up, 3 points on the day trade set up and 15 points on a position trade,
unless otherwise indicated.
******
Kennys Stock
Market Trade for
the Day
| Market |
Trade |
Open |
Target |
Notes |
| S&P
500 Cash Index |
Sell |
1333 |
1325 |
Trade Entry Valid
for Mon/Tues Only |
Kennys Stock
Market Trade for
the
Week
| Market |
Trade |
Open |
Target |
Notes |
| S&P
500 Cash Index |
Sell |
1333 |
1298 |
Trade entry valid
for Mon/Tues only. |
Kennys Stock
Market position Trade for
the
Week
| Market |
Trade |
Open |
Target |
| S&P
500 Cash Index |
Sell |
1333 |
1175 |
********************************
Open Positions
Kennys Stock Market Position Trade
| When
Opened |
Market |
Trade |
Open |
Target |
Stop |
| Week
2 May |
S&P
500 Cash Index |
Sell |
1370 |
1175 |
1347 |
| Week
9 May |
S&P
500 Cash Index |
Sell |
1357 |
1175 |
1347 |
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