Woops - posted this first thing before I found out about the Fed. Instructions in the forecast were better: "Watching 8:23+ for the tone of the day. If markets obviously down then bearish, if up then bullish. Otherwise expecting strong first hour."
ResultsPerhaps-path & trading
Watching 8:23+ for the tone of the day. If markets obviously down then bearish, if up then bullish. Otherwise expecting strong first hour so possible long but watching for shorts anytime after about 10:00. More down pressure after 10:36, down after 11:00 probably all the way to 12:00-12:15. Up into 12:51, then down again to 1:47. Retracement up move after 1:46 to about 3:00. Down after 3:14, either way into 3:39, down to close.
8:23 continued up so put on bullish glasses and getting long. Detail "In any scenario, watch for up after 9:15 and likely continuing into the regular open" even on down day was looking for "strong first hour." Long at 9:35 with break of recent globex high because no attempt at gap fill in sight. Pulling for 10:53 4H++ and price action strong all the way to about 11:00, 15 point trade possible there. If attempted a short at 11 then scratch or stop out. If short again 12:45 another stop out and by now you know not to short! Long 1:46 again profitable just depends on exit; if out at 2:18 area 4-5 points; if long again after 3:06 dip then another few points possible.
Call - "Down pressure increases after 10:36, but expecting lift and maybe strong into 10:53. Down again after 11:00, Watching 8:23+ for the tone of the day. If markets obviously down then bearish, if up then bullish. Otherwise expecting strong first hour so possible long."
Result - First hour +12 points.
Call - "Down pressure increases after 10:36, but expecting lift and maybe strong into 10:53. Down again after 11:00."
Result - 10:54 double top just a few ticks off 10:43 high. After 11:00 slowing down.
Midday call - "Chance of higher highs if 1:46 4T gets going up, especially into 2:18. May continue all the way to 2:59-3:14 area."
Result - 1:46 to 3:14 another 8 points up.
* * * * * * *
Expecting down; chance of up.
Perhaps-path & trading
Watching 8:23+ for the tone of the day. If markets obviously down then bearish, if up then bullish. Otherwise expecting strong first hour so possible long but watching for shorts anytime after about 10:00. More down pressure after 10:36, down after 11:00 probably all the way to 12:00-12:15. Up into 12:51, then down again to 1:47. Retracement up move after 1:46 to about 3:00. Down after 3:14, either way into 3:39, down to close.
News: 7:00 MBA Purchase Apps; 8:30 Durable Goods; 10:00 Existing Home Sales; 10:30 Natural gas
Details
Overnight markets are somewhat weak until Wednesday about 1:30 am, then can go either way until about 8:25 am. After 8:23 is the most important trend change on the day! Granted markets will be moving on 8:30 news, so judge the effects by action right at 8:23 for the next 10 to 15 minutes and how indexes respond to the news. For example, if market doesn't move up on positive news, then the overall effect is negative. Expecting down influence at 8:23 which influences the entire day, but if markets move up strongly instead then Wednesday will be more bullish.
In any scenario, watch for up after 9:15 and likely continuing into the regular open. After 9:30 can go either way. Watch after 9:53 for up and if 10:00 news is OK then this can continue to about 10:20. However, due to the negative hit right at 10:00 a bad number will give a quick drop. Down pressure increases after 10:36, but expecting lift and maybe strong into 10:53. Down again after 11:00, then additional down pressure after 11:30 into 11:38. More down after 11:52 into 12:00 and likely continuing down to 12:15.
Chance of up after 12:15 into 12:35 then stronger lift into 12:51. Starting at 12:45, though, is the next most important change on the day. This should be negative, so markets moving down after the top at 12:51. Watch after 1:07 and again after 1:27 for acceleration down, then low at 1:47. Good chance of recovery and some kind of 50% retracement to upside in the 1:46 to 3:14 period. Up into 2:18 and additional up after 2:38 to 2:59. Down again into 3:06 and after 3:14. After 3:23 will probably move market into 3:39 but this can go either way; watch direction after 3:23 for move into 3:39. Down 3:49 into close.
Guess-pectations
LOD: close; key lows 10:00, 11:00-11:12, 11:38, 12:00*, 1:47*, 3:06.
HOD: first 90 minutes, 9:30 to 10:53; key highs 10:53, 12:35, 12:51, 2:18, 3:00.
Price levels
Daily SPX held the area of August 16th close and open shown on chart 1. >From Tuesday's forecast: "SPX may try to hold in the area of August close & open, 1410-1415.
However, daily SPX still between the 76% and 100% projection targets so still possible for move down to SPX 1390 area. Chart 2.
Hourly ES remains in a strong downtrend. Current low right on 76% projection; if that breaks 100% at 1381 should be next target down which would align with the daily ABCD target as well. There is also still potential for lower levels between Wednesday and Friday 12/7. Watching the top TL (trendline) for resistance. If market holds the 1408 low and can get above the TL and stay there, then I will become more bullish. Then the next step would be to look for the an ABCD pattern on the 60 minute chart. Chart 3.
NDX continues to lead; tech will be even stronger starting next week on Monday. Chart 4.
Trendlines, Support & Resistance
The 3 year TL (trendline) connecting Jan 03 and July 06 lows is just a few points down. Markets may certainly find support here, but if this line breaks and cannot recover then I will consider this the formal beginning of a bear market. Trading basic: the longer the TL is in play, the bigger the move when it breaks. This applies to all time frames: intraday 1 minute, 5 minute, 15, hourly, daily etc. Chart 1.
Support at Monday's lows, then both SPX 1400 and ES 1400 probably putting up a fight. Below that, 1390 SPX due to ABCD 100% target; then all eyes on August low at 1370 SPX.
Resistance at recent highs and watching Fibs from 11/14H: 38% at 1441, especially 50% at 1451 and then 61% at 1462.
Swing trading
Looking for down the rest of the week to test or break Monday's low. There is *some* chance that Monday's low is it this week; for the bullish scenario to play out, Wednesday needs to come through with a strong up day starting right at 8:23 am. Still preferring bearish scenario of lower lows this week Wednesday to Friday or next week 12/6-7. Strong bounce likely 12/3-4.
The bearish version of the forecast sent for Monday's forecast clearly winning so far:
"The preferred bearish scenario would be a break of 11/21 lows Monday or Tuesday, bounce attempt early Wednesday but not maintaining, down Thursday and even lower lows on Friday. Key lows Tuesday and Friday, key high on Wednesday or chance early Thursday."
Longer term view
Markets at risk for further selling this week and next; key lows 12/6-7. Indexes then moving on 12/11 news. Lows 12/18-24; will be lower or higher depending on FOMC. Markets have already dropped 150 SPX points from the high but they could go a lot more.
| Time EST | Ts | Hs | C | Comment |
| 9:30 AM | 7T-? | |||
| 9:30 AM | 6T+ | |||
| 9:30 AM | 5T+ | |||
| 9:30 AM | 3T- | to 9:53 | ||
| 9:41 AM | 4H- | |||
| 9:53 AM | 3T+ | to 10:22 | ||
| 9:59 AM | 4Tm | |||
| 10:00 AM | 4H- | |||
| 10:33 AM | 4H+ | |||
| 10:36 AM | 3T- | to 10:50 | ||
| 10:53 AM | 4H++ | |||
| 11:00 AM | 4T- | * | ||
| 11:00 AM | 4H- | |||
| 11:12 AM | 4H- | |||
| 11:12 AM | 3T+ | to 11:30 | ||
| 11:23 AM | 4H+ | |||
| 11:30 AM | 3T- | to 12:03 | ||
| 11:38 AM | 5H- | |||
| 11:43 AM | 4H- | |||
| 11:47 AM | 4H- | |||
| 11:52 AM | 4T- | |||
| 12:00 PM | 5H- | * | ||
| 12:13 PM | 6T- | |||
| 12:15 PM | 3T+ | to 12:49 | ||
| 12:35 PM | 4H+ | |||
| 12:45 PM | 5T- | ** | ||
| 12:51 PM | 4H++ | |||
| 1:01 PM | 4H- | |||
| 1:01 PM | 3T- | to 1:20 | ||
| 1:07 PM | 4H- | |||
| 1:27 PM | 3T- | to 1:41 | ||
| 1:36 PM | 4H- | |||
| 1:46 PM | 4T+ | * | ||
| 1:47 PM | 4H-- | * | ||
| 2:13 PM | 3T- | to 2:26 | ||
| 2:15 PM | 4H- | |||
| 2:18 PM | 4H++ | * | ||
| 2:38 PM | 3T+ | to 2:59 | ||
| 2:54 PM | 4H+ | |||
| 3:06 PM | 4H-- | |||
| 3:14 PM | 4T- | * | ||
| 3:15 PM | 3T- | to 3:39 | ||
| 3:23 PM | 4TAm | to 3:39 | ||
| 3:39 PM | 5Hm | |||
| 3:49 PM | 4T- | |||
| 3:52 PM | 4H++? | |||
| 3:54 PM | 3T- | to close |
