DOW Chart

DOW Daily Chart

SPX Daily Chart

SPX Daily Chart

NDX Hits New Intraday High

The NDX is still on a tear up, but lets take a looks at the sectors that have been leading the charge...

NDX Daily Chart



Semiconductor Index



Internet Index



Software Index



Biotech Sector

RUT Still Looking Strong

The RUT gapped up this morning along with the other indices and closed up 4.89 points for the day. The price action on the daily chart looks bullish, higher highs and higher lows. Should the RUT pull back, there should be some strong support at the 800 level. The 30MA at 790 should act as secondary support.

RUT Daily Chart

RUT Holds 800 Support Area

The RUT tested the 800 area after gapping down yesterday, but it formed a bottoming tail on the daily chart and today's bullish action has so far confirmed a bounce off that 800 support.

We'll be watching the upward trend line and the 800 area as future support levels.

RUT Daily Chart

RUT Gets A Pull Back

Despite the recent gains in the RUT, it took another pause today and pulled back to 805.80. The RUT is now below the 200MA again, but is still well above the 30MA. Technically it makes sense to have a healthy pull back before resuming the uptrend (if it decided to continue the uptrend). The next support level on the way down should be 800 and then the 795 area where it has the 50% fib catch it. If it breaks below 795 then the next support level should be the 30MA at 787.

If the RUT turns around and moves up again on Tuesday it will have the 820 area to content with for resistance again.

RUT Daily Chart (Note the bullishness of the MACD Lines above zero)

NDX Hits New Intraday High

The NDX hit a new intraday high today, but pulled back in later day action and is now sitting at a resistance level of the old highs.

Tomorrows close may give us some idea of where the week is leading us. A break to the upside might give us a fib target of 2216. The NDX is currently had 2057.

NDX Daily Chart (with Fibs)

SPX In Charge

The bulls are back with some thanks to the Fed. Notice how the price action in the last couple weeks was subtly building a price pattern that tipped the probability of market intention to the upside. Although no one knew what the Fed would do on Tuesday, it seems that the big money and there hundreds of economic analyst were doing some pre-fed buying in anticipation of the move up. After the announcement the volume surged and their bigger orders went in. A day for the record books!

At the time I wrote this, the futures were done a bit, we'll see if we have a consolidation day (sideways to down movement) or if we head higher on some renewed strength. Technically it would seem reasonable to digest the move up and chill at these levels for a while (as you can see we hit a horizontal resistance level), but we'll see what the market has in store.

SPX Daily Chart (Green dot indicates wedge breakout)

SPX Looks Strong Prior to Fed

The SPX Daily Chart is looking bullish prior to today's Fed announcement. We'll see how it follows through today.

SPX Daily Chart (snapshot at 10:34am Pacific Time)

SPX Daily

The SPX is still looking bullish on the Daily Chart (intraday snapshot at 10:30am Pacific Time). We'll see what it holds in store for the rest of the day.

SPX Daily Chart (Monday 10:30am Pac)

Monday Jitters

The market action is a little jitterish as we get closer to Tuesday's FOMC announcement. Below is an intraday snapshot of the RUT Daily Chart. We'll see how we end up at the end of the day, but for now you can see that the RUT fell, bounced back up off the trendline and is currently holding. More later.

RUT Daily Chart (as of Monday about 10:25am Pacific Time)

Tonight's Conference Call Topics

Here are some topic Ideas for tonight's Call:

The Past Weeks Action:

A discussion on the past weeks price action on the 4 Major Indices -

- RUT: Relative weakness to the other indices, still under the 200MA and 30MA on the daily
- NDX: Showing some weakness today despite a gap up on the morning, Rising Wedge forming on the daily chart.
- SPX: Showing some strength today on the heals of a strong DOW.
- DOW: Busted out of the downtrend line today, but lets see what happens tomorrow (busted out last week and fell down a few days later)

Feedback from the Chicago High Probability Class:

What scenarios do you see with the Fed Meeting and how do you plan to trade it?

Q&A

What topics do you suggest we chat about next week?

Next Week: Intro to trading Butterflies on the Indices. Butterflies offer a good way to cap risk, but offer a sizeable reward. My favorite aspect of the butterfly is that it puts time decay in your favor.

RUT: Holding Steady at 780

The RUT is doing a great job at holding it's line in the 770 to 800 area as we get close to moving in to expiry week and the Fed Announcement. For those with any RUT Iron Condors this is probably the best you could have hoped for moving into Friday.

If Friday proves to be another nothing day or moves up a bit it should give plenty of downward buffer zone for those who still have or are trying to buy back their bottom legs.

We're starting to look at possible Oct RUT Iron Condor levels, but are being cautious as we await Tuesday's announcement.
(We'll talk more about Oct on tonight's conference call)

RUT Daily Chart

NDX: Rising Wedge?

The NDX has been on roll upward for the past couple weeks, but ran in to some weakness after a gap up this morning and closed below the open. It still managed to close up about 10 points from yesterday's close.

The Nasdaq 100 is a very volatile beast even when the market is relatively calm as can be seen by the large number of gap ups and gap downs on the 1 Year Daily Chart, so I'm paying careful attention to the "Rising Wedge" pattern I see forming on the daily charts. Of course the Fed Announcement may weigh heavy on the ultimate direction, but it is very common for the NDX to "over-do" it's moves (as seen in the 1800 low a few weeks ago - that's 200 points ago if you're counting) so I think the possibility of another gallop down on a break of that trendline is something to watch for.

Rising Wedges typically resolve to the downside.

NDX Daily Chart

SPX: Bullish in Front of the Fed

The SPX closed a bit higher today, but is still consolidatiing in the wedge prior to Tuesday's Fed announcement. The NYSE showed some strength today as could be seen in the DOW and S&P, but the NDX and RUT showed some relative weakness. The market seems to have liked the good news from the McDonalds sales numbers (showing consumer demand) and the bad news from the labor department (increasing the likelyhood of a rate cut) to help prop up today's price action.

As always, I can't wait to see what the market has in store for us tomorrow.

SPX Daily Chart (I repositioned the downward trendline from yesterday)

Dow Pops Out of the Top

The DOW index closed above the downtrend line on the daily chart today (bullish), but also notice how it's about to bump up against the old uptrend channel line (green dotted line). Any upward action tomorrow may find some resistance at that level.

DOW Daily Chart

RUT Still Under the 30MA (& 200MA)

The RUT opened up this morning at the 30MA and rose higher with the other indices, but fell to close again below the 30MA on the daily. This is significant in respect to it's relative weakness against the other indices which have all cleared their 30MA and 200MA.

The 200MA is still overhead for the RUT at the 807 level. The RUT has not even been able to "touch" the 200MA since it broke below it in late July. Technically it shows extreme weakness at it's current level. The price action for the RUT in the last few weeks has been sideways at best. There have been intraday highs, but there have also been intraday lows (the tails on the daily chart).

RUT Daily Chart

DOW Consolidating

Like the broader SPX, the DOW is consolidating on the daily to form a wedge pattern leading up to next weeks Fed announcement. Like the SPX, it too rose to the downward trendline today but fell later to stay in the range.

DOW Daily Chart

SPX Wedge Intact for Another Day

The SPX traded up to the top of the downward trendline today and retreated for the remainder of the day to form a doji candle on the daily and keep the Wedge intact for yet another day. More trading in this range might be expected for the next couple of days leading up to the Fed announcement. I wouldn't be surprised to see intraday movements in and out of the wedge, but I will be watching very carefully for any close outside of the wedge. A close outside would tilt the probabiliites of the next day's direction.

Note that a close down tomorrow would start the formation of a lower high on the SPX daily chart.

SPX 6 Month / Daily Chart

SPX Wedge Forming

Keep you eye on the direction the SPX breaks out. Still plenty of volatility so be prepared for whipsaws.

SPX Daily Chart

RUT Grows a Tail

The RUT had a pretty ugly morning of selling, but recovered nicely in the afternoon to form a 10 point bottoming tail.

Notice on the chart the 760 area where it found support. This was an area of horizontal support all the way back at the March lows.

Yesterday the RUT broke the uptrend (green dotted line), and today on the gap up it almost reached the 30MA (780 area), but fell from there. The bottoming tail "appears" bullish, but we'll have to see what type of follow through it has tomorrow. I've redrawn an upward trendline (solid green line) and I'll we watching carefully to see how we close tomorrow to see which direction the RUT is likely to move.

For the bullish arguement, it seems to be forming an acsending triangle, but for the bear arguement it's still under the 30MA and the trendbreak from yesterday may not played out it's full move yet.

With the continued heavy volatility I would not be surprised to see the RUT move up and down in the 800 to 750 area until the Fed announcement on Tuesday.

RUT Daily Chart

RUT Plagued by the Evil 200MA

The RUT just can't get a break!

Although the RUT was the first index to break it's downtrend on the daily, the poor little RUT just can't seem to hold above 800 and keeps getting batted down by the 200MA. Unfortunately it hasn't even been able to touch the 200MA yet. The good news is that it's holding up nicely above the 30MA.

Today's little pull back was quite tame when you look at it in context of the daily chart and it's forming an interesting cross between a wedge and an asending triangle. I'm sure there's a proper name for it, but the recent price action is consolidating so a break one way or another might produce a big move in that direction. If it breaks to the upside, there's not a lot of horizontal resistance until 810 and 820 so it could easily jump up higher if it can get through the 200MA.

The RUT historically has been a nice sideways trending index, so lets see if it can mind it's manners for the rest of the month and just chop in a range.

RUT Daily Chart

NDX with the Strength Again

Although today seemed a little bearish on the NDX, take a look at the chart.

First we must remember that the NDX just went on a 4 day rally that covered 132 points from the high (2032) to the low (1900) WITHOUT a single pause until today, AND today closed ABOVE yesterday's lows. This is a bullish index and at this point today's action was a much needed little pullback from that monsterous move up.

I left my original upward trendline on this to show you how steep this move up has been and how the prices to this point have tried to hug that line. If the NDX does fall again, keep an eye on the 1962 area which is the 61.8% Fib area. If it can hold above that level the probabilities are better for a continued rally to test the old highs.

NDX Daily Chart

SPX in FIB Limbo-Land

The SPX continues to look good on the daily charts despite the pull back today, but it's found itself in the area between the 50% and 61.8% retracement area which is really a limbo area when it comes to probable direction. In many cases, if the price can't get above the 50% area the underlying will fall back down to the lows, and conversely, if the underlying can get over the 61.8% the probabilities are good for a 100% (or 100% +) retracement. Since it's stuck in the middle, keep your eye on this tomorrow to see if it's able to break above or below this level to create a bias. Expect lots more chop in the coming weeks as we get closer to the Sept. 18th Fed meeting.

SPX Daily Chart

DOW Takes A Breather

The DOW paused a bit along with the other indices today fueled by some weak jobs data, but the sell off wasn't that bad in the context of the daily charts. At the time of this post the futures were up for tomorrow. The daily chart shows clearly that we have broken the downtrend (as least temporarily) and the DOW has started to form a higher high. Lets see if we can hold the new uptrend line that's formed, and form a higher low. Note how the candle found support today on the backside of the downtrend line.

DOW Daily Chart