Markets held up but daytraders scored some points.
Results"Perhaps-path
Watching overnight markets about midnight and again after 2:15 am. If recovery after midnight, then possible that Friday turns out more positive. If drop after 2:15, then Friday looking negative. Closer to session open, at risk for down after 7:00 am into 9:15 am. Expecting gap down and drop into 9:54, then further selling likely if 10:00 news permits. Watch for additional down after 10:08. First chance up after 10:40, more chance up after 10:49; but no guarantees since 11:41 is the down event that dominates the morning. Watch for down after 12:20, more down after 12:50. Possible lift into 1:53. Down after 1:57, stronger down after 2:41 into 3:02 and possibly beyond. More positive 3:23 to close."
Trading
Markets up after 2:15 am meant a more positive Friday. News dropped but immediately recovered. 10:49 good entry for 2nd part of morning move, 3+ points. If short at 12:50 then another 2+ points. Lift into 1:53, but more up after so if shorting probably stopped there. Down after 2:41 and trendlines breaking gave 3+ points. Long near 3:23 another good trade depending on exit, 5 points possible here. In sum, range limited but forecast got several of the moves on the day.
The 4T periods mostly went in directions listed on the forecast and 2 of the 3 5Hs (red lines above) moved the market strongly (given the day) as expected.
Call - "Watching overnight markets about midnight and again after 2:15 am. If recovery after midnight, then possible that Friday turns out more positive." Overnight low 1:40 and markets up after 2:15.
Call - "The first chance I see for a turn up is after 10:40, and then additional up after 10:49." Since day proving up this was a good move on the morning.
Call - "After 12:50 into 1:14 is most vulnerable to a drop." Straight down.
Call - "In this context a move up into 1:43 will be a mild corrective move higher. Expecting additional selling after 1:57 to 2:27, and then sharp down after 2:41 into 3:02. This is the strongest down period of the entire day. On a truly bad day it will keep going, but after 3:23 some positive kicks in that may be able to lift markets."
Markets up into 1:43+, then down after 2:41 into 3:02. Up just after 3:23 to close. For most traders today sideways chop but if you had this forecast then possible to pull points out of the market.
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Friday QT (daytrading only) sent to clients Thursday 10/11 at 8:30 pm PDT.
Expecting more selling, maybe strong.
News: 8:30 retail sales, PPI, Core PPI; 10:00 Business inventories, Michigan sentiment
Also: GE reports before open, this is a biggie.
While many traders would expect a bounce after a sell-off like we had Thursday afternoon, all my signals are strongly negative. First some comments on overnight conditions. After Thursday night at 10:10 pm is a possible mild positive that runs for about 4 hours, but right at midnight Friday is a very strong negative that can dominate the scene. Check markets after 2:15 am; if noticeable drop here then likely Friday heavier down in markets throughout the world because the influence that starts here runs through the entire NY trading day all the way to close. Conditions worsen after about 7:00 am all the way to 9:15 am, so expecting a gap down.
Wherever market opens, expecting further down on open. Watch for drops into 9:54 and 10:05. Conditions for 10:00 news are quite negative, so if numbers are good the effect will be limited and if bad then a sharp drop. Additional down after 10:08. The first chance I see for a turn up is after 10:40, and then additional up after 10:49. No guarantees that this is healthy rally, because the 11:41 down hit will limit upside until it passes. After this markets are mixed can can go either way, but likely some positive.
After 12:20 is a key trend change on the day. While there can be another up move anytime after 12:20 into 1:43, expecting first move down. After 12:50 into 1:14 is most vulnerable to a drop. In addition, conditions get even more negative after 1:18 for the rest of the day. In this context a move up into 1:43 will be a mild corrective move higher. Expecting additional selling after 1:57 to 2:27, and then sharp down after 2:41 into 3:02. This is the strongest down period of the entire day. On a truly bad day it will keep going, but after 3:23 some positive kicks in that may be able to lift markets.
Guess-pectations
LOD 3:02-3:25; key lows 9:54, 10:05, 10:40, 11:41, 1:14, 1:58, close?
HOD open; key highs 11:30ish, 11:56, 1:43-45, 2:56.
Perhaps-path
Watching overnight markets about midnight and again after 2:15 am. If recovery after midnight, then possible that Friday turns out more positive. If drop after 2:15, then Friday looking negative. Closer to session open, at risk for down after 7:00 am into 9:15 am. Expecting gap down and drop into 9:54, then further selling likely if 10:00 news permits. Watch for additional down after 10:08. First chance up after 10:40, more chance up after 10:49; but no guarantees since 11:41 is the down event that dominates the morning. Watch for down after 12:20, more down after 12:50. Possible lift into 1:53. Down after 1:57, stronger down after 2:41 into 3:02 and possibly beyond. More positive 3:23 to close.
Price levels
Now those 100% levels on the long term SPX are looking much better. Chart 1 shows both the major ABCD from the 3/14L - 7/16H - 8/16L - 10/11H and the smaller but still very significant 8/16L - 9/4H - 9/10L - 10/11H. If market does indeed stop with Thursday's high then this can be a major multi-week top.
If I am right that Friday is heavy down, then ABCD set up points to 1543 at 76%, 1536 at 100% and possible 1528-9 at 123%.
Since the market has risen so fast in the last couple weeks, even a relatively standard 61% correction from lows as recently as 9/24 gives 1544. Chart 3.
| Time EDT | Ts | Hs | C | Comment |
| 9:14 AM | 5H-- | |||
| 9:30 AM | 7Tm | |||
| 9:30 AM | 6Tm | |||
| 9:30 AM | 5T- | |||
| 9:30 AM | 3T- | to 9:42 | ||
| 9:40 AM | 4TA- | to 11:41 | ||
| 9:42 AM | 3T- | to 10:44 | ||
| 9:54 AM | 4H-- | * | ||
| 9:58 AM | 4H+ | |||
| 10:02 AM | 4H- | |||
| 10:05 AM | 4H-- | ** | ||
| 10:08 AM | 4T-- | * | ||
| 10:18 AM | 4TA-- | to 11:41 | ||
| 10:28 AM | 4H- | |||
| 10:40 AM | 3T+ | * | to 11:37 | |
| 10:49 AM | 4T+ | * | ||
| 10:49 AM | 4H- | |||
| 11:22 AM | 4H+ | |||
| 11:37 AM | 3T- | to 12:19 | ||
| 11:39 AM | 4Tm | |||
| 11:41 AM | 5H- | * | ||
| 11:45 AM | 4H- | |||
| 11:56 AM | 4H+ | |||
| 12:11 PM | 4H-? | |||
| 12:20 PM | 5T- | |||
| 12:20 PM | 4TA+ | to 1:43 | ||
| 12:28 PM | 4H- | |||
| 12:45 PM | 4H- | |||
| 12:50 PM | 3T- | * | to 1:16 | |
| 12:54 PM | 4H- | |||
| 1:14 PM | 4H-- | |||
| 1:18 PM | 6T- | |||
| 1:17 PM | 4H+ | |||
| 1:31 PM | 4T-? | |||
| 1:43 PM | 5H+ | |||
| 1:45 PM | 4H+? | |||
| 1:57 PM | 3T- | * | to 2:27 | |
| 1:58 PM | 4H- | |||
| 2:12 PM | 4H- | |||
| 2:38 PM | 4H- | |||
| 2:41 PM | 4T-- | ** | ||
| 2:41 PM | 4H+ | |||
| 2:56 PM | 4H+ | |||
| 3:02 PM | 5H-- | ** | ||
| 3:16 PM | 3T- | to 3:34 | ||
| 3:23 PM | 3T+ | to close | ||
| 3:37 PM | 4H- | |||
| 3:52 PM | 4H+? | |||
| 3:57 PM | 4H- |
