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Early Warning?
August 26th, 2008 at 2:41pm · No Comments
The eMini low of 1262.50 today came within 2 points of the 60 minute channel bottom. At that time, the 60 minute tick cycle-trap diverged from price, as shown with the green trend lines on the chart. At the same time, the modified DMX, a leading type indicator may be turning up on the more important 135 minute chart. Whether it’s turning up or not, that indicator’s decline has been very shallow when compared to its ascent last week. This is illustrated with the blue trend lines on the modified DMX on the 135 minute chart. These details are early warnings that the extent of this decline from Friday’s highs is over and the next 20+ points in the S&P eMini contract will be on the upside. Channel tops are now at 1293 on the 60 minute and 1306 on the 135 minute. This update is very much an early warning, and for that reason it might not work out. But clearly, it’s become risky to be short here. The other side of the argument is that 1260.50 is the daily net-line sell level. A daily close below that price brings a new set of bearish indications.
Tags: Day Trade · General Market Commentary · S&P 500
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