TIME & PRICE ANALYSIS
I am announcing a few improvements I will be making starting next week. First, I will make my post at 10:30 PM EST nightly. So synchronize your clocks. This will eliminate you having to keep hitting reload to see if I have made my post, saving you time. The morning update will be posted at exactly 9:00 AM EST, unless specified as different the night before. Traders should have their accounts open and ready to trade in case anything develops. Most of the time we will want to get our orders in before the open. Also, there are times when my market opinion may change during the day. If so, I will post my comments. 90% of the time Iwill stick with my call made before the open. But in the 10% of the time that my opinion changes, I will make it available right here. Usually I will tell you in advance if this is a possiblity and what time to look for it. Also, as a full-time trader I am here most of the day, so any questions can be directed to me by e-mail.
The second improvement is a link below on how to use my daily indicators. Most of this can be skipped by traders with experience. I am making this available for traders who are new to the game or who are new subscribers and want to know how I interpret my individual indicators.
WEEKLY COMMENTARY FOR WEEK OF DEC. 14
Last week was expected to be choppy. Day traders had the best opportunities, and will see the same type of action this week. The focus now becomes the 23rd, the next Gann clustering date. The 21 day and 8 day cycles were scheduled for lows on Friday afternnon at or near 1:00. The actual low came around the 3 pm timeframe. So we should see a bounce to the upside at some point during this week. There are another set of hourly cycles due to bottom on the 16th, the next turning point low. Monday I expect to see some sort of rally attempt. How long and how strong should give us a clue for Tuesday's and Wednesday's action. If no decent rally attempt is made, then we will have to look for the low to be made the 16th. What should follow once the low is IN is a rally back to test the 9100 Dow area amd the 1190 area on the March S & P futures contract.
The put/call $$ ratio finally switched in favor of the bears, signaling we are getting closer to a low. The value is nowhere near the 2/1 value we need to see for a buy signal, but the dramatic reversal of this indicator over the past several days suggests a good rally may be near. If this is the case, then the 23rd may in fact be a high, rather than a low as I had thought it might become. Too early to tell for now.
My initial downside target of 8760 was achieved midday Friday. For the record, this target was made and posted on this site several weeks ago for all to see. The NEXT downside target becomes 8,665. WHEN, I cannot say. Perhaps as soon as Wednesday. Perhaps Monday late. if that target is hit then the focus will become the 8370 area. Then 8169. Then 7,820. Then 7,400. But I will reserve these lower numbers for after the New Year. My feeling is that we will likely see at least the 8169 area before all is said and done in January at the next scheduled low.
The good news is that any re-test low should see much better technicals than the low made in October, generating a rally that is genuine. If you are an investor rather than a trader, start loading the boat at dow 7820, and then doubling up on any re-test.
I am still looking for gold to make a cycle low here, Dec. 17 is the IDEAL date for the 24 week cycle low, but this could stretch out further. Futures traders should be watching for technical confirmations to start moving in longs.
The early readings I am getting from the weekly Sentiment Index are 50/50, so choppiness is the call for the week. Day-traders should take advantage. I should have the completed index reading in by Monday night's update. Any traders who wish to participate should e-mail me their prediction for the close on the SPX cash index for Friday the 18th.
MACD DAILY SLOPE - DOWN
WEEKLY MACD SLOPE - DOWN
OVERBOUGHT/OVERSOLD INDICATOR - .47(NEUTRAL)
PUT/CALL $$ RATIO - 1.16/1(NEUTRAL)
TOMORROW'S PROJECTED RANGE FOR THE MARCH S & P FUTURES CONTRACT: HIGH - 1183 HIGH - 1167 LOW
TOMORROW'S PROJECTED RANGE FOR THE MARCH DOW FUTURES CONTRACT: HIGH - 8960 HIGH - 8815 LOW
Traders were advised to buy the Dow Jones futures contract at or near support after 1:00 on any decline, OR upon the holding of an hourly low. The projected low of 8770 was close, the projected low for the S & P was EXACT at 1165. If you bought into the dip Friday you should have a gain of anywhere between $400 and $700 per contract. If you waited for an hourly low to hold you are long from the close Friday. Either way we will look to exit this position if we can get a good price Monday afternoon, then look to possibly re-buy late Wedneday for a rally attempt into the 23rd. If will try and post an intraday update tomorrow at noon, especially if the market is not acting well. If I am wrong about the cycle phasing tomorrow and we continue to drift lower, traders should look to purchase an additional contract at the 8670 level DOW CASH. I do expect we will make at least one lower low than Friday's low before we can begin to make a rally attempt. So don't be surprised if you are long. If instead we open higher and we get near the projected highs, look to exit positions there, and remain flat. Options traders should be carrying the January calls with this trade and will look to exit/enter under the same terms. There should be at least a test of the 9100 area at some point this week.
STOCK TRADERS are still short a 100% position in the SPY contract at an average price of 115.06 and should stick with this position. We will look to hold until mid-January or until I see a short-term selling climax, whichever comes first. We are also long a 50% position in ASA mining from 20 3/8. Traders should add another 25% position on a break on the upside above 19.
DAY TRADERS PATTERN
The pattern for tomorrow should see a low made first before 11:00 am in the 1165-1167 futures area. A rally may last into late afternoon, possibly testing the 1187 projected high area. Use your technicals to get the best exit. I expect that the final hour of trading could see some selling. But the trade of the day should come from the buy side early. I will make a post at 9:00 AM after seeing Globex action tonight for day-traders to reaffirm the projected patterm. There may be a shot at a gap trade tomorrow morning as well. Check in at 9 AM.
Good Luck, Good Trading,
HOW TO USE THE DAILY INDICATORS
previous commentary week of 11/09/98
previous commentary week of 11/16/98
previous commentary week of 11/23/98
previous commentary week of 11/30/98
previous commentary week of 12/07/98