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发表于 2009-3-22 16:44
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 Helping traders overcome fears and emotions in trading
A Quick Look at Crude Oil and the US Dollar
March 21st, 2009 by Corey Rosenbloom
I posted yesterday about “Crude Oil and the S&P 500 Index” but let’s take a look now at Crude Oil and the US Dollar both on the weekly timeframe.
Crude Oil (WTIC):
Crude Oil seems to be completing a “Rounded Reversal” pattern that I’ve been highlighting for some time now, and we’re finally getting a rally of the significant positive momentum divergence that has been forming (particularly on the daily charts).
As it stands now, we’re at key potential resistance via the 20 week EMA, but if price clears this level, there is ‘open air’ or open room to make a play for $70 per barrel. Again, this is just taking a chart view on this possibility, not including fundamental or other considerations. If the dollar continues to weaken, crude oil prices (and that of many commodities) will continue to rise. A little inflation would be a good thing in an environment of deflation virtually across the board.
US Dollar Index:
The Dollar Index appears quite bearish in its weekly chart, particularly after having formed a doji (and sort of evening star pattern) at its recent price highs at the $89 level. Look closely to see that a distinct negative momentum divergence formed on these highs as well.
The “angle of ascent” (I drew trendlines around it) ‘feels’ odd - almost corrective in nature, and that a down-move seems the natural pathway to work off that rise. It almost feels like an “AB = CD” Measured Move pattern is forming, whose targets would be roughly the $78 index area.
There is potential support about the $81.50 level via the rising 50 week EMA, but if that support level gets taken out, then we would have similar ‘open space’ on the weekly chart to the downside as we do upside in Crude Oil.
We’re sitting now on the 38.2% Fibonacci retracement from the 2008 lows to the 2009 highs, and the 50% comes in at roughly $80.50, while the 61.8% retracement is at the $78.30 level. The $79 level also reflects prior resistance from the September price swing, which should be expected to act as (at least) temporary support.
Keep watching these charts closely for additional clues.
9 Comments | add comment
Two Markets - Two Directions - SP500 and Crude Oil
March 20th, 2009 by Corey Rosenbloom
Adam Hewison of Market Club released a video last night (that was precient on today’s move!) where he discusses the ‘rhythm’ of the S&P 500, Fibonacci resistance (as I’ve been describing), and the next likely move in both the S&P 500 and Crude Oil.
(Clicking the image opens the free video page)
Entitled “Two Markets - Two Directions,” Hewison traces the likely pathway for the S&P 500 and then compares that to a potentially different move in Crude Oil.
Strangely enough, Adam draws the same conclusion I’m finding in both markets, only without using Elliott Waves, Moving Averages, Oscillators, Trendlines, and the like. Sometimes it helps to ‘keep it simple’ as he always says. There’s clearly a reason why he’s a 30 year veteran of the markets!
Take a moment to watch the video (was was released earlier to members and released here by permission) and consider becoming a member. I have a heads up and have previewed the new charts for Market Club members and they’re quite impressive. I’ll keep you updated when they roll out those long-awaited upgrades!
Corey Rosenbloom
11 Comments | add comment
A Look Back on Prior Quadruple Witching Days
March 20th, 2009 by Corey Rosenbloom
Friday brings us the infamous “Quadruple Witching” event which might be a big deal in the market, and it might not. Let’s define the concept and then look back in the past at some recent Quadruple Witching Days.
Options traders know that the third Friday of every month is “Options Expiration Days” which can lead to frenzied activity, volume, and volatility as large funds (and traders) ’square up’ any remaining open options positions before they expire and settle on Saturday. Perhaps they would prefer not to take posession of a large amount of stock, and so they may unwind hedges and/or sell/buy positions in the options (and stock) market.
Quadruple Witching occurs not only when equity options (like Google, Exxon-Mobile) and index options (like DIA, SPY), but also when futures contracts “roll over” and options on equity index futures (like @YM, @ES, @NQ) expire along with single stock futures options.
The following four components comprise a “Quadruple Witching” Day:
Equity Options
Equity Index Options
Index Futures Options
Single-Stock Futures Options
Often, the result is a rather erratic, volatile trading day that can confuse many intraday traders who aren’t aware of this occurrence. Quadruple Witching occurs on Expiration Friday in March, June, September, and December.
Let’s look back at regular Expiration Fridays and also Quadruple Witching Days in the S&P 500:
(You’ll need to click the chart for a larger image)
The last Quadruple Witching occurred on December 19th which resulted in a small-range day with volume running only slightly above the average at the time. It was a ‘dud’ in terms of normal Quadruple Witchings.
Prior to that, we had a decent range day on September 19th, with volume surging during the run-up to that Friday as price began its downslide into the October lows. That Friday took many traders by surprise as it was a sudden up-move in a down-swing that only served to delay the inevitable decline.
The first example shown on the chart comes from June 2008, where price formed a Trend Day Down on higher than average volume in the context of a down-swing.
So, not all Quadruple Witching days result in big moves, but the intraday squiggles (price swings) can occur seemingly randomly and not follow the typical expectations of technical analysis. Funds are balancing positions and they typically are looking at their books and not their charts to do so, which can cause seemingly perfect intraday trade set-ups to fail.
So, do trade with caution today but perhaps not with extreme caution. Some retail traders take these days off and start their weekend early. In the end, it’s up to you.
Corey Rosenbloom
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
Register (free) for the Afraid to Trade.com Blog to stay updated
16 Comments | add comment
Fibonacci Confluence on NASDAQ and Dow Jones
March 19th, 2009 by Corey Rosenbloom
A couple of readers have also asked me to post the Fibonacci Confluence Levels (grids) for the NASDAQ and the Dow Jones Index currently. Here is a quick, mid-day update on these levels (which, to me, are not as clear as the confluence on the S&P 500).
NASDAQ Daily Fibonacci Confluence:
The grid logic is roughly the same as this morning’s “Fibonacci Confluence in the S&P 500” post. Fibonacci grids are taken off the November, January, and February highs and all drawn to the recent March Lows to find confluence (overlap).
The NASDAQ Index has already blown through its key Confluence Zone at roughly 1,465, though it appears to be coming back to this zone in today’s action, having found resistance at its second-level confluence zone (the 50% from November and 61.8% from January).
Dow Jones Daily Fibonacci Confluence:
I’m not picking up much Fibonacci Confluence (at least, not as clearly as we are in the S&P 500) in the Dow Jones at the moment, as the confluence ranges from 7,601 to 7,757 (a 150 point spread really shouldn’t be called ‘confluence’).
However, the Dow is holding resistance just beneath these levels.
Once again, Fibonacci is only a tool for market analysis - there is no guarantee these levels will hold but sometimes it can be quite useful in your analysis and trading.
Corey Rosenbloom
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
1 Comment | add comment
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