Equity Market Comment - 12/3/2007

The market has its share of difficulties deciding on direction today, but was finally resolved lower. However, the price decline does not meet even the minimum targets for a correction so we can expect more decline to follow.

The chart below shows the Broadening Wedge Formation on the 5 minute chart and the most probable outcome from this pattern.

Short term I continue to sell strength and Intermediate Term I am buying weakness.
I look for a minimum downside target of 1457-1453 basis the S&P 500 cash which is still another 15 points away and this is the minimum target.

We could see the completion of the correction on Tuesday and as a matter of fact a down Monday, down Tuesday could very well set up a very bullish Wednesday.

On the day trading front, we captured 9.75 S&P 500 points today, but we had to fight for every single point we got.

By the way, if you did not see the previous post, the Day Trading Site is up and running.

You can check it out at - http://www.lowriskdaytrade.blogspot.com

NEW ADDRESS FOR DAY TRADING BLOG

The new blog is complete for Day Trading and so the LIVE day trading posts will be made on that blog instead of this one. This way, this blog can concentrate on intermediate and long term strategies. I will however continue to cover the commodity trades on this blog.

For those of you interested, the address for the Day Trading blog is as follows:

http://www.lowriskdaytrade.blogspot.com

Stop on by and take a look and tell me what you think.

I spent most of the weekend putting it together and I will guarantee it will improve over time.

Weekend Equity Market Comment - 12/2/07

The market has made a clear impulsive move up from the lows, which is very bullish for the intermediate term. The mode of buying weakness continues to be the prudent action to take.

For those who have rode this rally from the lows and wish to shave some short term profits, we are at or very near an area that would be a great place to take profits.

It looks to me as though the first short term leg up was completed at the opening on Friday and actually the first leg of the corrective action may have completed Friday as well as the counter rally. So, if this is the case then Friday was a pivotal day with the High, First corrective leg and counter rally to that correction all wrapped up in one day.

If this is the case, then we should look for lower prices as early as Monday, with the potential of these prices to be sharply lower.

Short term position traders may even put themselves into some short futures positions or options and ride the move lower as it should be done very quickly.

Just remember that we remain in the buy weakness mind set.

AGL - Keep This One In Your Sights

Now here is a very interesting stock that seems to be setting up for a very nice move higher.

AGL is a stock I have traded for years and one of the main reasons I have continued to trade the stock is that it responds very well to technical analysis. There are some stocks that just don't seem to move based on technicals and then there are the average ones and then there are stocks like AGL that for whatever reason respond well to technicals.

The chart below is the 15 min chart and was used simply to confirm what I could not see on the daily chart, and that is if the rally was in the form of a trending move and it is.

Notice that the three legs up are just about equal in price and time, which is always a good sign.

Scroll down to the daily chart now.

You will notice the daily chart has given us my favorite chart pattern, Three White Soldiers!

If you recall, this is a very reliable trend reversal pattern and when you add taking your position upon a decline to the middle of the second candles body it bats better than 85%!

Notice also, that the middle of the second candles body comes in at about 16 1/2 and a 50% correction of this most recent rally comes in at 16 3/8 so we have some pretty strong support in that area and this is exactly where I would be looking to go long.

The target from the triangle comes in at 23 12/2 which represents a better than 40% move and more than likely in a fairly short period of time.

THE MAJORITY HAS SPOKEN

Your voices have been heard and action is being taken.

I will be setting up a completely separate blog for the Day Trading

with a link on this current blog to navigate your way to the

signals if you wish.

I have to agree with the vast majority of you that the Day Trading

Posts do take up a large amount of space and thus deserve

their own blog.

I will be working on setting up the Day Trading Blog this weekend

and time permitting I should have it up and running by the

opening bell on Monday.

Now comes the next question for all of you.

DO YOU THINK THE TREND ANALYSIS LLC BLOG SHOULD

BE STOCKS AND BONDS ONLY AND SEGREGATE THE COMMODITY

TRADING FROM THE STOCKS?

Day Trade Update 11/30/07

CLOSE

No real opportunities the rest of the day as it was simply pre-weekend games on the floor.

For the day we netted 6 3/4 points.

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1:45 pm EST

Stopped out at 1482.65 for a 2 1/2 point profit.

We have locked in 6.75 S&P 500 points so far today.

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1:41 pm EST

Move stop to lock in 2 1/2 points at 1482.65

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12:51 pm EST

We are going to go long here at 1480.15 on the break of the upper channel line and the buy on the stochastics.

Keep a pretty tight stop of a buck and a half to two bucks.

If it is going to move, it should do so in short order, if not something is wrong and we get out.


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12:44 pm EST

If we can break the upper channel line on the 5 min chart and get some follow through along with the stochastics on a buy signal then I might entertain going long.

But as things stand now, we remain flat awaiting a clearer picture.


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12:39 pm EST

There really is no clear cut picture as to what is going on and I had thought the market would have worked its way lower by now.

So when in doubt GET OUT!!!

At the market 1479.25 for a loss of .75 points.

This puts us up 4.25 points on the day.

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12:24 pm EST

Going short at 1478.50 with a close 1 1/2 point buy stop.


*************************************************************************** 12:16 pm EST

Really looks to be having a hard time and I am sure we will get stopped out at breakeven.

The next move will be to go short upon the crossing on the 5 min chart.


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11:59 am EST

Move stop to break even 1479.50

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11:49 am EST

Long from 1479.50. Stop just under the days lows @ 1476 even



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11:43 am EST

We were stopped out of our short position with 5 points profit.

Looking to go long on a crossing of the stochastics basis the 5 min chart.

Odds continue to favor higher prices today as the gap was not filled in the first hour.


************************************************************************************

11:21 am EST

Made the 1477.25 target so tighten up the stop to 1478.25 to lock in 5 points profit.


**********************************************************************************
11:16 am EST

1477.25 is the downside target. I would expect a rally after we achieve that price level.

This market is very quiet today.



***********************************************************************************
10:39 am EST

Watch the 1483 Pivot Point for a short trade if broken.

Keep an eye on the top blue line also as the 5 min chart has made a very nice bull flag and that calls for higher prices. We also did not fill the gap in the first hour, so this tells us that odds favor today to be a trending day in the direction of the gap which was up.

There are opportunities on both sides here, we just have to wait for them to set up.



************************************************************************************
Get ready on a break either way in the triangle

**********************************************************************************
Getting very close to SHORTING TIME!!

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PIVOT POINTS & MAGIC NUMBERS FOR 11/30/2007

PIVOT POINTS FOR 11/30/07

PIVOT - 1467.30

RESISTANCE

1. 1471.77
2. 1476.23
3. 1479.49
4. 1482.75
5. 1490.47
6. 1498.20
7. 1505.92
8. 1513.65

SUPPORT

1. 1464.04
2. 1460.78
3. 1456.32
4. 1451.85
5. 1444.12
6. 1436.40
7. 1428.67
8. 1420.95

MAGIC NUMBERS

• ABOVE 1475.32 RALLY TO 1486.57
• BELOW 1460.32 BREAK TO 1449.07

Pre-Opening Comment 11/30/2007

We have a very strong overnight market today and this should lead to a strong opening. Currently at 8:10 am EST the S&P 500 Futures are trading 14.5 points higher and barring any barring any major surprises in Personal Income and Personal Expenditures, these higher Globex prices should hold.

There a few very interesting items to note about this open and all of them point to a short term top being put in place very early in the trading day.

First, notice the triangle that has formed on the 5 minute chart. The minimum target on this formation is roughly 1484.

Second, there is a strong second level Pivot Point at 1482.75.

Third, with the stronger open the Magic Numbers call for 1486.57.

Lastly, 100% of yesterdays range added to the close calls for 1485.17.

Starting to see a little pattern in there?

So now for the good stuff, what to do with all of that information.

For Day Traders I would look to fade the open right in the area of the above numbers.

For short term traders, or even those who just want to shave a little cream off the top, I would look to take some profits after this great run up we have had. Personally I am going to be selling the GM and Ford in the aggressive trading account and look to buy them back later at lower prices.

Intermediate term traders can look to use the potential forthcoming weakness as a buying opportunity.

Position option traders should look to pick up some fairly valued index put options.

Really anyway you slice it, there is opportunity here regardless of your trading style. One more note about the possible upcoming market correction. Don't let it spook you because it is bound to be fast, steep and hard.

MINIMUM TARGET ON THE 5 MINUTE CHART TRIANGLE IS 1484.25

NEW DAY TRADE POSTING PROCEDURE

I realize that those of you who subscribe to the blog are getting an incredible amount
of emails with each day trading post I send.

There are times that I may post 20 or more day trading comments and actions and while
many are utilizing the information from the blog in real time, I realize that some of you simply
want the intermediate and long term analysis.

Therefore, in order to cut down on the number of emails you will receive with each day trading post, I am going to make one day trading post per day and I will add and edit this one post as the activity dictates. This way, all of the day trade posts will fall under one entry and alleviate
the overflow of emails.

If you are following the day trading emails, nothing has changed, other than the fact that all
of the action will be placed under one heading and one entry. It will simply be added to as the day progresses.

I hope this helps.

As usual, I welcome any and all comments on the blog, good or bad.

Cocoa - Close To Showing It's Hand

The next move in Cocoa will be let out of the bag shortly with a break on either end of the triangle.

It is high probability trades like this that you keep your powder dry for, so keep this on your radar.

The commercial traders are giving the impression that it will break down, or make an upward break failure, but let the market tell us what it wants to do.

More Confirmation

While we look for some short term weakness here, it is very reassuring that one more piece of the bullish picture has been put into place with the turning up of the sentiment gauge.

Dec. Oats Short Position

Move stop very close on the Dec. Oats Short position.

We have better than 60% on the trade and it had an outside day with a down close,
which typically is a precursor to higher prices.

I moved my stop to 270 even.

NEW SCALPER TRADE EXECUTED TODAY

Short Mar. Coffee from the close today with a close stop.

Looking for a quick 3-5 day decline.

Check sidebar for details under Scalper

Day Trading Analysis - 11/29/07

Even on days like today, there is something to learn about the markets.

The greatest never ending education you could ask for.

The triangle today was a thing of beauty and saved today from being a losing day.

Pivot Point Study - 11/29/07

Very limited pivot action as the market was extremely range bound today.

The green dotted line represents the first hours range.

Daily Equity Market Comment - 11/29/07

Today was pretty much along the lines of what was expected, but even having a guideline to follow and the market going pretty much with the guide it still remained a very challenging day to day trade.

The action today was indicative of a market that is a bit confused here and typically this means that a pull back of some sort is just around the corner.

With the action today and the probability model both saying the same thing (Lower Short Term Prices Upon Us) It would be prudent for short term position traders to take their long positions here and await the pull back before getting back on the long side. Aggressive short term traders can look to exit their longs and put on a short position as it looks like we should get 30 to 40 S&P 500 points to the downside here.

Once this correction has run its course then I look for the real fireworks to start on the upside as a late year buying panic hits the street.

So, continue to buy on weakness and look for this weakness to be upon us very shortly, like tomorrow at 9:30 am. EST

Day Trading Update # 8

We are not there yet, but getting close to a shorting opportunity, so keep your powder dry and get your orders ready.

Watch the 5 minute chart and the one minute chart for a breakdown.

Day Trade Update # 7

TIGHTER UP THE BUY STOP NOW THAT THE TRIANGLE TARGET HAS BEEN REACHED.

I AM MOVING MY STOP TO 1464 TO LOCK IN 4 POINTS.

THE PICTURE TELLS A STORY

A PICTURE MAY BE WORTH A THOUSAND WORDS

BUT IN TRADING A PICTURE IS WORTH THOUSANDS OF DOLLARS!

The Next Move

Keep an eye on the Triangle for the next major move.

Remember, a failure either way is a stronger signal then the break either way.

We know the market is about to make an extended move in either direction by how quiet it has become, even for the lunchtime hour.