Thursday, September 2, 2010

Trader Brian updates on swing positions as market tests 1090 pivot and technical levels

Well the $SPX 1090 pivot that Tony Caldaro has mentioned often got tested again today! Its upper limit is 1097; but 1090 also happens coincidentally to be the mid-channel area of Terry Laundry's T Theory (Tm) envelope [note- corrected from 1097 to 1090 $SPX]. So while most (standard) Elliott Wavers are scrambling, we can play to our levels and be glad that the market acknowledged the Fibonacci retrace numbers like 1070 and now 1084.50 today. Andre Gratian had focused the 1085 and I know his subscribers are getting his updates intraday too. We are looking at the possibilities that the market finishes absorbing the new-month new money after today and maybe tomorrow, then rolls over for the "expected" September weakness of the 2nd year in the 4-year Presidential cycle and a probable, standard four-year cycle low in October. Meanwhile, what does Trader Brian think with his swing position view? Let's find out, since we're fortunate he sent an update this afternoon. Sorry I didn't post it sooner, but here it is now:
From: Brian
Date: September 2, 2010 2:39:17 PM EDT
Subject: Update

The swing trade continues to bring modest gains: 11/14 positive trading days.

Yesterday stopped completely out of my SDS hedge, but I added it back this AM rally. New CMG, Added additional 1/4 VMW, BIDU. Long by weight: POT, SDS, VMW, BIDU, CRM, RDY, CLF, CMG, GMXR, KWK. 20% Cash; 20% short/hedged.

Now below, I (Ariel) am providing three charts. First, the $VIX dropped to test trendline support today. Like the 1090/1097 level in the $SPX, either this line will hold - or if it breaks, that'll be new information to use in shifting my point of view. Next is the McClellan Oscillator for the NYSE ($NYMO) and notice too that the longer-range Summation Index just tested its own 50-day moving average. The MO itself entered overbought territory so it must be watched for when it'll roll down again. Finally the TRIN - what a chart ... Its moving averages are mostly still oversold but its absolute value and 3-dma are much lower, even the TRIN itself ticked up today but under .80 so it doesn't necessarily aid the bulls. Well - let's allow the levels to decide for us. There are arguments on both sides but I'm with Brian in remaining defensive given this time frame (as I said, so many 401(k)'s so little time!) and these technical levels. Unless these levels break, the bears are still growling.

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