Friday 10 November 2006

Mixed Emini Signals

Mixed signals today. The Emini closed up 0.75 points at 1,384.75 on Friday. We got the bounce expected after Thursday's close but trading was very light because of the Veteran's Holiday. We now have a mixed bag of signals. Check them out below.

Emini Mixed Signal Image

The Emini opened barely changed at 1,383.50, briefly rallied to 1,385.50 and then fell to the low of the day at 1,379.25. At this point the buyers took over and pushed the index higher, closing above the open and above yesterday's close at 1,384.75. Volume was very light at 0.8 million contracts traded and range was well below average at 6.25 points. We now have a double bottom put in at 1,380 and resistance at 1,394. Consider the market range bound until these levels are broken.

OK, so here's what I mean by a mixed bag. On the negative side:

  1. My Secret #2 oscillator, based on the open and close prices, turned down today (see the chart above)
  2. Trading Index (TRIN) oscillator also turned down today
  3. We have divergence on the Trading Index (TRIN) with the market up but the index down

On the positive side:

  1. My Secret #3 oscillator, based on Smart Money, is over-bought but has not turned down yet
  2. The NASDAQ futures rose while the DOW futures fell, a bullish divergence
  3. The Emini tested 1,380 and churned, with volume relatively high considering the small range

Personally, I hate reading market commentaries where the analyst covers themselves and ends up being "right" whichever way the market trades. So I'll stick my neck out - I have a bullish or long bias. And here's why.

I got really depressed on the weekend reading all these blogs and economists telling me how bad the economy was, how bad real estate was, how many people were quitting Silicon Valley - it went on and on. Yes, I know we have an inverted yield curve, that 2007 is going to be rough, house prices are falling, etc. But that won't help me trade on Monday and Tuesday. Mixed bag of signals, yes, but my trend oscillators always turn early - they're leading indicators - and the volume churn was a significant sign. The trend always lasts longer than you think - and we're in an uptrend until proven otherwise. Looks like we'll re-test the 1,394 level to me - let's see after Monday or Tuesday.

Like this article? Sign up for Free Email Updates or subscribe to the RSS Feed.



Filed Under Cycle Analysis

Popular Emini Trading Articles

Free Emini Trading Report

Emini Trading Report
Emini Trading - Free Report Coming Soon!

Subscribe to Emini-Watch