October 13, 2011

  • SPY daily time frame has given a Pin Bar formation.
  • Pin bar is a powerful reversal formation.
  • Immediate support for SPY is the 50 Day SMA. Bears need to breakdown below 50 SMA for an extended fall to happen.
  • Bulls need to break yesterday's high for invalidating the bearishness of Pin Bar formation. If they manage to overcome the Pin Bar they may take price to 100 SMA and beyond.
  • ES Hour is testing 50 Hour moving average and the cloud of this time frame.
  • Price and MACD is diverging for quite sometime without major effects.
  • Now price if falls below the cloud and 50 Hour moving average we may see the negative divergence take effect.
  • Price staying above the cloud will continue to favor bulls of ES.
  • Sustaining above 50 SMA and the resistance line shown in first chart is important for bulls.
  • Two more day's for this week to close and closing the week above 5177 will favor bulls. Weekly MACD is converging if it gives a buy this up move will get extended.
  • Above scenario possible only if price sustains above 50 SMA. For bears price need to close below 50 SMA.


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My Favourite Quote

"All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis."
—Jesse Livermore