ChartsEdge (S&P 500) map for 4/2; and additional comments on the markets

Market Map for Apr02

Posted: April 2nd, 2009

Author: Mike Korell

Filed under: One-Day Market Map

=============

Folks, just a comment of my own (Ariel), the action so far this week has been more consistent with the ChartsEdge weekly forecast for this week, hasn't it? (You can find it quickly using the "ChartsEdge weekly" label in the labels list at right, or check the ChartsEdge website (always included in the "other sites of interest" listed at right). Since they are based on different methods, this could spark some interesting discussion at some point. If you want a refresher in the methods, check the ChartsEdge information I've posted at my trading education site (link in the welcome paragraph at right, or toward the bottom of the "other sites of interest"), and you can also find it at the ChartsEdge webpages.

Since we like to reference a number of methods, let me just say that for a larger swing trading perspective, I'm looking at the ChartsEdge forecasts, the Elliott Wave probabilities, the trendline and technical indicator analysis, the Fibonacci cluster zone 806-833/838 with the supply overhang that had existed in this zone, and the T Theory information. If you looked at the charts I posted at the UBTNB3 site yesterday evening, you'll see that the TRIN and CPCE charts haven't looked the most confirmingly bearish (part of the sentiment analysis), yet the VIX has remained above 40 and still just toying above its 200-day moving average. My personal situation is to be skeptical that the market can get above the 833/838 levels, and other than that I'm doing very little with equities this week; how you choose to play - or not - the market is up to you. If you can be daytrading and were able to work with the channel post I made yesterday, opting to the ChartsEdge weekly forecast when the day's map looked like it wasn't going to hang in for the day, then you should have done fine for the day (and possibility for this morning given the futures as I post this).

It's been said that this time period for a bear market rally would be zig-zaggy and probably too much for individual traders to navigate, so it really depends on your daytrading or swing trading abilities and which models you select to trade - and your willingness and ability to swap out one paradigm for another intraday if that's what the market wants to do. It isn't like any one paradigm is "right", it's just that any one paradigm may have probabilities or may be the "lucky" one chosen by the crowd at any given time.

As for the banks and financial sector being discussed this morning, and thinking back on the post I made about the XLF, one might think that heavy call interest in the XLF could be a way to hedge other positions being taken in individual stocks, and therefore should not be relied on as a single indicator - of course, I always advocate looking at more than one indicator. Then again, note that the premarket levels being discussed with such enthusiasm are not to new swing highs - yet - so I cannot get all enthusiastic yet.

As always - be careful out there, and happy market navigating!