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Kennys Stock Market Trading - The Week Ahead 17 Apr
April 17, 2011
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Issue# 0013 17 April 2010

Stock Market Trading

Traders Day Trading & Kenny's Elliott Waves Blog

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Hello,

Welcome to Stock Market Trading the new look newsletter for 2011 from Traders Day Trading & Kenny's Elliott Waves Blog.

*****

S&P 500 Cash Index - The Week Ahead

The Week That Was...
My estimated price range for last week was 1334-1310 and the market went to a high of 1333.77 before a sharp rejection pushed it all the way back down to 1309 where it found the support.

"The dilemma for this week is whether to go long with the shorter term timing studies that was looking for a low centered on Thursday, or to go short with the markets failure to break through the resistance and Fridays bearish engulfing candle...."

It was not until Thursday that the support finally gave way and hit my swing long entry price before printing a low at 1302.42. We then got the expected rally into the end of the week from there.

The Week Ahead...
1/The main problem is as I indicated last week, that it looks as if the S&P500 could have topped, but the larger cycles are still supporting the market for now.

2/The S&P500 has already done enough to satisfy the bearish bias from the bearish engulfing candle from the previous Friday, so it is no longer a consideration.

3/The low tested the 38.2 retrace of the rally from the March low and could be considered as bullish from here, as it could have completed the second wave within the Red Elliott Wave count from the charts posted in Kennys Blog

4/Fridays high only made it to the 50% retrace of the decline which I normally associate with a 'b' wave. Since it exceeded the 38.2 retrace I would prefer to see the 61.8 for a second wave.

5/The island reversal on the daily chart would be a bullish signal if the gap at 1324.46 gets filled and would cast doubt on the second wave count if it were to print the 61.8

6/The short term low came in very late and that time cycle is now in the sweet spot for the next high which should come in on time if the market has indeed topped out.  

7/This suggests that the market should turn down again quite sharply early in the week.

Confused?

That is the nature of the beast but fortunately, it is not a question of being right or wrong. We do not need to know, and can never 'know' what is going to happen. The larger plan suggested that the S&P500 may have topped so that is what I will be going with for this week ahead, and will let the money management strategy take care of the rest. 
Pivots Monday Weekly Monthtly
R3 1337.15
1384.15 1468.84
R2 1327.95 1352.80 1385.61
R1 1323.81 1340.49 1355.72
Pivot 1318.75 1321.45 1302.38
S1 1314.61 1309.14 1272.49
S2 1309.55 1290.10 1219.15
S3 1300.35 1258.75 1135.92

Current Week Month   Stock Market Trading Trend Down Year  Stock Market Trading Trend Up
Open 0 1329.48 1257.64
High 0 1339.46 1344.07
Low 0 1302.42 1249.05
Range 0 37.04
95.02


Previous Day  Stock Market Trading Trend Up Week Stock Market Trading Trend Down  Month   Stock Market Trading Trend Down Year  Stock Market Trading Trend Up
Open 1314.54
1329.01 1328.64 1116.56
High 1322.88 1333.77 1332.28 1219.8
Low 1313.68 1302.42 1249.05 1011.40
Close 1319.68 1319.68 1325.82 1258.84
Range 9.2 31.35 83.23
208.4


Key Support and Resistance Levels

1381
1370
1360
1353
1344

1340

1334
1326
High? 1322
Current 1319
1312

1310
1305
1303
1298
1293
Low? 1288
1273
1268
1257

1249
1225
Bold Numbers = Stronger Support and Resistance


Trade Set Ups for the Week Ahead

There were very good reasons for the time resitrictions set on last weeks trade set ups but unfortunately these meant that niether trade entry was triggered.

The mixed signals from last weekends analysis meant that it was prudent for this format not to call a swing short until the end of the week so despite nailing the high at 1334, I can not claim any of the potential 32 points from it, just as I can not claim the 10 points resulting from the set up on the swing long trade from 1308.

From so far in advance of the events, both trade set ups looked at the time to be too high risk to call, if they filled outwith the expected time frames. This week I have the same dilemma as I want to be swing short, but where from? It is essential to keep it within my 10 point money management strategy or to have a clear exit based on the technical analysis that I can budget for.

After the market closed on Friday, quotes went back to the days high at 1323 so that should be enough to keep it within a workable margin of error as 1334 remains a key number.

******
NOTE: For this format I am using a 10 point stop loss on the weekly trade set up and 3 points on the day trade set up, unless otherwise indicated. 

******

Kennys Stock Market Trade for the Week 1

Market Trade Open Target TA Stop
S&P 500 Cash Index sell 1323 1288 1239

Kennys Stock Market Trade for the Week 2

Market Trade Open Target
S&P 500 Cash Index sell 1330 1316

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Kenny



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