Inverted head and shoulders on the SPX?

Quote from jmonday:

AMT,

I'm also confused about the 800 level that we broke through yesterday even though we were net short 40,000 contracts.

How do we know that new buyers didn't come into the market or that peoples positions were simply hedged that allowed price to break 800 without having to neutralize first?

If this is the case how can we ever know if an important s/r area is going to hold or break due to it being net long or short??

Thanks,

-monday
More...
jmonday.....I am at an airport right now traveling back to Austin soon. Send me a copy of your chart showing what you are talking about, going back to the first time we traded up to the low 800's several days ago.

The 800 to 804 zone inventory was taking out on the last push which traded up through that area......as a typical result, the run beyond that area exceeded the typical 5 point minimum move beyond the nuetralized zone. Also, remember there was PREVIOUS contract inventory which had held from the first tests of that area (which eventually rolled over to the new contract). There is NO CURRENT product available to track and account for the old contract inventory held from a significant s/r zone, and blend that information/data with the new contract. This I do with my proprietary delta tracking tool I have mentioned before.

Again, send to me a copy of your chart so i can see what you are talking about....thanks. :)
 
Charts Predict: S&P Could Fall Toward 600
Topics:Investment Strategy | Economy (U.S.) | Stock Market | Economy (Global)
By: CNBC.com | 24 Mar 2009 | 08:24 AM ET


The S&P 500 may not have formed a solid base yet and the recent surge could give way to another steep decline, with long-term support providing a backstop at 600 points, Roelof van den Akker, technical analyst at ING Wholesale Banking, told CNBC.

“We should not be surprised if the S&P will make new short-term lows below 670 (points) in the coming weeks in this longer-term bottoming process,” Akker said. “Longer-term support is coming in around 600,” he added.

“It’s still far too early to conclude that we have seen the lows within this bottoming process,” according to Akker.

The S&P [.SPX 811.37 -11.55 (-1.4%) ] needs to break above the upper end of its “falling trend channel,” Akker said, which is a range-bound trend of lower highs and deeper lows.

A move above 850 points on the S&P, a rise of around 3 percent, would signal a break above the all-important range and could mean a bottom is forming in the chart, he said.

If this week’s early surge was to give way to declines, there is a possibility of a solid support level between 766 and 755 points, Akker added.
 
Quote from Whisky:

Some big sellers sold the 800-802's, the thing dropped about 10 points. The buyers picked it up and pushed harder, and the previous sellers at 800-802 stopped and reversed. (Huge initiated buying at 802 and above are the SAR shorts).
JW
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Yes you are on the right track.....that push to the 806 area was the final neutralization of the 800-804 zone (with most of their stops up to 806's). After zone neutralization, price rotated for a short time and then LAUNCHED up to the 821's :) This was a very typical playout of a delta resistance zone getting worked by buyers, until an eventual punch through which caused resting sellers to finally bail. :)
 
Quote from AMT4SWA:

jmonday.....I am at an airport right now traveling back to Austin soon. Send me a copy of your chart showing what you are talking about, going back to the first time we traded up to the low 800's several days ago.

The 800 to 804 zone inventory was taking out on the last push which traded up through that area......as a typical result, the run beyond that area exceeded the typical 5 point minimum move beyond the nuetralized zone. Also, remember there was PREVIOUS contract inventory which had held from the first tests of that area (which eventually rolled over to the new contract). There is NO CURRENT product available to track and account for the old contract inventory held from a significant s/r zone, and blend that information/data with the new contract. This I do with my proprietary delta tracking tool I have mentioned before.

Again, send to me a copy of your chart so i can see what you are talking about....thanks. :)
More...



AMT,

sent you a pm w/a chart, thanks!
 
Hi AMT,

Could CD be telling a lie if those who had positions on would also hedge those positions ??

For example, why do a zone need to be defended with x amount of contracts. if they are already hedged, wouldn't it be very hard to determine the exact amount of contracts needed to break through?

Thanks

JW
 
Nope....I have never ever seen any situation in all my years of using delta to support what you mention.....a full understanding of Auction Market Theory will also give you the answers as to why this would not be a problem.

Problems seen with delta by various posters are most likely a result of using backfilled data/delta calculation language/and or breaks with missing points of tracked data. Also, contract rollover periods have to be taken into account, or only looking at the NEW contract data will not tell the whole picture. :)
 
10k IRT/IQ chart attached for comparisons. This is the last IRT chart I'll be posting because I'm switching over to Gomi's NT version. Many thanks Gomi.
 

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