032904
There's not a whole lot of interest to say about today. Pre-mkt upgrades and M&A news (i.e., manipulation) boosted prices toward higher levels of resistance. Trading was primarily professional. Donnie Daytrader either jumped on, or he didn't, according to his own strategy/tactics.
Therefore, rather than waste a day, I'd rather do what I'd ordinarily do for myself, which is note whatever there is to note about today, which isn't much, and put my time to more valuable use re-visiting the dailies.
The "signs of strength" which I noted on the ES and YM over the weekend turned out to be prescient since the market rose. But charts are definitely a what have you done for me lately phenomenon, i.e., just because the YM and ES stopped short of more serious S (dates for each are noted below the line), that engine requires stoking, and price won't run forever without help. Volume today on these two was okay, but not impressive. Volume on the NQ, which DID reach serious S, was downright light. Donnie Daytrader may be smart enough to recognize the hook within the lure and cautious enough to bide his time biting the big one.
The only confirmed supply line in the YM is the first one, beginning at 10700 (the demand line, beginning at 10400, is, again, a hypothetical, drawn parallel to the supply line). The only confirmed supply line in the ES is the first one, the lateral at 1160. The demand line here is also confirmed, the lateral at 1120 (technically, the diagonal demand line beginning 2/24 is confirmed, but that's assuming that the originating point means something, but since the demand is simply drawn parallel to the supply line, that particular juncture may just be coincidental).
Since the demand/supply lines are therefore largely tentative still, the laterals take center stage. Here there is more commonality amongst the three indices, at least over the last thirteen trading days. The ES and YM dropped out of their trading ranges two days after the NQ continued its downtrend below S at 1450. They all rallied at the same time, they all consolidated at the same time, they all "gapped" down at the same time.
But where the NQ found expected S, the YM and ES, as already noted, stopped short. Since there was no discernible price S at those levels, the ES and YM spent three days finding some (the NQ was already sitting on S). Having found it, for whatever reason, they then all began a rally to . . . what?
First possibility, as mentioned yesterday, was the first, tentative, supply line. That was too thin. As for the next of these, at least with the YM and ES, they meet the first laterals, at 10300 for the YM and at 1120 for the ES. The NQ, however, is already past the first lateral (at 1435) and is already at the next, at 1450.
At this point, the outlook for the ES and YM aren't quite the same. The ES seems to have worked its way through the congestion of week before last, but it's got one hell of a lot to work through between 1120 and 1160, though there is somewhat of an air pocket between here and1135m, caused by that marubozu on 3/10. The YM, on the other hand, has much clearer sailing all the way to 10400. The NQ is facing a hard slog beginning right here, all the way to 1500.
I postulated yesterday that the direction of least resistance was down, and given all that these indices have to chew through in order to break for daylight, that's still the case. However, the NQ has made a higher swing high, and the YM looks as though it might do the same thing momentarily. If all of that occurs, then finding R will be much like a bunch of people wandering through a darkened room with flashlights.
The NQ will be reaching its downtrend line at about the same time that the YM reaches the bottom of its old trading range and the ES reaches the midpoint of its old trading range. In other words, all of these are facing important R, but the character of the R is different for each.
Isn't this fun?
