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Kennys Stock Market Trading - The Week Ahead 02 May
May 01, 2011

Issue# 0015 02 May 2010

Stock Market Trading

Traders Day Trading & Kenny's Elliott Waves Blog

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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...
Someone has to go and mention the 'crash' word and true to form, it goes and breaks out through resistance...

"Bottom line is that I am on full crash alert from here but should see that take shape early in the week if it is going to happen."

"Regular visitors may have noticed that the Red line in my chart at 1338.1 has been left there for some time now and although I have not mentioned its importance before, I believe it is a very important number and would prefer not to see a daily close above that line."

Monday saw a brief and shallow reaction at 1338 to back test the break and close above the down sloping channel trend line, before reversing back up and heading higher.

The Week Ahead...
Despite the break higher, there is still no change the Elliott Wave count. The 'c' wave is still only around 0.786 x wave 'a'.

"If the "One degree of trend upwards" 'B' wave count on the chart is correct, the market should be due a fairly spectacular move down once the 'c' wave is complete. That means we just have to pin down 'c' to within an acceptable margin of error. "

Monday is a Holiday in the UK with the Ftse closed until Tuesady, so it looks as though there may still be a little time to mark until then.

I still believe that the next CIT will see the chunky dump all the way down to my larger 'C' wave targets but as always, it is more important not to go bust trying to call it.

"What I am talking about here is the potential for the S&P500 to shed at least 160-200 points over the next few weeks."

"The larger cycles are still pointing upwards but are now much nearer the sweet spot. "

Long term time cycles are still in effect but are getting there.

Pivots Monday Weekly Monthtly
R3 1374.03
1419.39 1480.68
R2 1368.16 1386.30 1410.82
R1 1365.88 1374.96 1387.21
Pivot 1362.29 1353.21 1340.96
S1 1360.01 1341.87 1317.35
S2 1356.42 1320.12 1271.10
S3 1350.55 1287.03 1201.24

Current Week Month   Stock Market Trading Trend Up Year  Stock Market Trading Trend Up
Open 0 0 1257.64
High 0 0 1364.56
Low 0 0 1249.05
Range 0 0

Previous Day  Stock Market Trading Trend Up Week Stock Market Trading Trend Up  Month   Stock Market Trading Trend Up Year  Stock Market Trading Trend Up
Open 1360.14
1337.14 1329.48 1116.56
High 1364.56 1364.56 1364.56 1219.8
Low 1358.69 1331.47 1294.70 1011.40
Close 1363.61 1363.61 1363.61 1258.84
Range 5.87 33.09 69.86

Key Support and Resistance Levels

High? 1370
Current 1363

Low? 1334






Bold Numbers = Stronger Support and Resistance

Trade Set Ups for the Week Ahead

Last week was a complete wash out for the trade set ups. The daily close above 1338.1 killed the immediate bear count and short trades should have been closed at that point, as per the analysis.

Once again my rules are going to work against me here as I did not specify stops. I will mark this up as a 35 point loss for the week. In reality the 25 point stop on the position trade is too wide and was poor money management so I will tighten that up a bit to 15 points for future.

This week I want to be short again and will give it another shot from 1370 if it gets there and this takes me to another important feature of my money management strategy.

In addition to having a budgeted stop loss in place for each trade, I believe that it is also prudent not to waste too much resources by getting married to any one particular call.

Although a stop loss is placed on each individual trade, numerous losses can soon mount up to become a substantial drawdown and seriously damage any trading account. My rules permit me to have only 3 failed attempts on each trade set up such as this one, thus protecting myself from...myself.

This rule forces me to accept that it is not working, and avoids incurring heavy losses on any one particular call when the market just does not want to play ball.

NOTE: For this format I am using a 10 point stop loss on the weekly trade set up, 3 points on the day trade set up and 15 points on a position trade, unless otherwise indicated. 


Kennys Stock Market Trade for the Week

Market Trade Open Target
S&P 500 Cash Index sell 1370 1337

Kennys Stock Market Position Trade

Market Trade Open Target
S&P 500 Cash Index sell 1370 1175

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