JSL's Strategy Lair

January 19
Intra-Week Chart Analysis
Wherever AAPL goes, one of its biggest components, so goes NDX.
http://img157.imageshack.us/img157/549/ndxjan182006kz3.png

S&P did come down along with NDX but it looks a bit reluctant to participate in the sell-off.
Per ES
http://img157.imageshack.us/img157/9058/es60jan182006rv1.png
per $
http://img264.imageshack.us/img264/751/sp60jan182006sy7.png

The Dow (here it's YM) is still in a trading range, though IBM, GE and C earnings will have quite an effect tomorrow. YM especially has the eCBOT shut down open gap support (for some reason it works; a previous such gap made in October is still open way below).
http://img179.imageshack.us/img179/485/dow60jan182006gf8.png
 
This week's Market Analysis
It seems that NDX is in a bit of a quandary with bulls and bears in a tug of war for a major consolidation:
http://img151.imageshack.us/img151/4761/ndxjanuary1920078vt.gif

S&P is still firmly above recent supports and may rally (10-15 pts) if NDX stabilizes and attempts to retrace its recent highs:
http://img296.imageshack.us/img296/8407/spdailyjanuary1920073rp.png

S&P in 60 min interval:
http://img441.imageshack.us/img441/7622/sp60minjanuary1920074ze.png

YM in 60 min interval shows we're at a short term tradable breakout point:
http://img296.imageshack.us/img296/1717/eminidowym60minjanuary18if.png

YM in 20pt range bar suggests a break out is imminent, with 50-50 odds.
http://img256.imageshack.us/img256/3769/eminidowym20rangespdail8ac.png

More earnings next week but a little quiet on the economic releases front setting up for a calm before the storm scenario, as the following week we have some big market moving numbers coming out, including the FOMC statement. My guess is that the market will remain around this level or even a bit higher testing supports and resistances until the FOMC statement, which may trigger a break out of the current 200 pt range on the Dow (up or down! We can all anticipate or prepare, but we're not God afterall so we can never know for sure).

Happy trading!
 
Intra-Week Chart Analysis
Here's a look at the market on Jan 22 2007

NDX broke below some key moving averages, but it is also quite oversold short term:
http://img183.imageshack.us/img183/2685/ndxdailyjan2220076ry.png

S&P held up a lot better than NDX and Dow today thanks to financials:
http://img183.imageshack.us/img183/103/spx60minjan2220079fc.png

Dow Jones in Daily as well as 60 min (showing a bit more weakness than S&P today because of BA, which had a downgrade):
Daily
http://img254.imageshack.us/img254/5126/indudailyjan2220075mf.png
60 min
http://img183.imageshack.us/img183/8264/indu60minjan2220079ws.png
 
I'd say the bottom we formed in early January is very strong, given that it took 3 trading days and it had been previously tested in late December. That makes it plausible that we just hit a 'higher low' pivot today with the price going much higher from here after an orderly sell-off (since we also bounced off the top range of the previous base), but given that we've already come down 150 pts from the top and yet at the same time there is no confirmation to the upside, I'd be very careful going long or short until I get a clearer picture, perhaps sometime tomorrow. Note that on S&P 60 min, IF we start going up again without hitting the early January low, we have an inverse H&S pattern, which could be a strong enough pivot to take out the previous 6 year high. Tomorrow might end up being a 'fade the trend' consolidation day, however.

Regards.
 
Here's a look at the market on Jan 23 2007

On the daily chart nothing much has changed - NDX is weakening (it finished just above the current support that was noted on the chart yesterday) but may bounce, though it failed to rally above the converging 20 & 50 MAs; S&P and Dow are still holding above their support levels and looking quite bullish. Just two weeks ago, it was NDX that seemed to broke out to a new high while S&P and Dow grudgingly followed. Now NDX looks to have lost most of its momentum while S&P remains just one decent rally away from a new 6 year high and Dow is not far behind, though all of the latter's top 5 holdings (BA, MO, IBM, XOM, & MMM) are now off their highs.

Dow in 60 min interval:
http://img394.imageshack.us/img394/4118/indu60minjan2320075hq.png

S&P in 60 min interval:
http://img394.imageshack.us/img394/5091/spx60minjan2320072xu.png
 
Here's a look at the market on Jan 24 2007

All three major indices moved higher and today was significant in that NDX also participated to the upside. With the bond yield steadily rising (which puts a damper on the PE expansion thesis, at least in a rational market setting) and the earnings growth showing signs of abating, it remains to be seen how long this now 7-month old rally can continue. In a rather strange twist, none of the Dow's top 10 holdings set the new 52-week high today. Is there a 'mid-race change of horses' taking place or is the market just getting tired despite record setting highs?

Daily S&P
http://img120.imageshack.us/img120/8841/spdailyjan20076ko.png

S&P in 60 min
http://img120.imageshack.us/img120/5193/spx60minjan2420077gd.png

NDX Daily
http://img252.imageshack.us/img252/5045/ndxdailyjan2420075ax.png

Daily Dow
http://img181.imageshack.us/img181/8620/dowdailyjan2420070ai.png

Dow in 60 min
http://img181.imageshack.us/img181/2696/dow60minjan2420074pm.png
 
Intra-Week Chart Analysis
Here's a look at the market on Jan 25 2007

Complacency quickly turned into a wild mood swing (no panic just yet) as a new high was quickly met with a broad based sell off of about 1 percent. I was taken off guard by this move (hence I too am guilty of complacency), as I expected the strength to continue a little while longer after a mild pull back. We're currently right back on the daily trendline support on all indices and it remains to be seen if this sell off will have a follow-through or we'll bounce off, like we have done many times in the past. If we fall below the lows set on Monday, we'll probably head much lower, at least revisiting the early January low.

NDX is right back down on to the previously mentioned support level after a show of some strength yesterday.
http://img369.imageshack.us/img369/7056/ndxdailyjan2520079qe.png

S&P and Dow also remain above the trendline support. S&P also finished right at the falling trendline connecting the December high to the early January high.
S&P
http://img407.imageshack.us/img407/9522/spdailyjan2520075pp.png
Dow
http://img407.imageshack.us/img407/6192/dowdailyjan2520075hu.png

A look at 60 min charts also show we're right above critical supports.
S&P 60 min
http://img407.imageshack.us/img407/7342/sp60minjan2520074dq.png
Dow 6o min
http://img407.imageshack.us/img407/3523/dow60minjan2520075zg.png
 
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