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Kennys Stock Market Trading - The Week Ahead 15 May
May 15, 2011

Issue# 0017 16 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...
The market did not gap down as I was looking for and instead found the support at 1337-38 (sorry about the typo reading 1137) and that immediately placed the focus on the alternative scenario, looking for a slightly higher high than the Fridays 1354 peak.

The week went on to top out on Tuesday at 1359 where it promptly reversed closing back down on my major pivot level at 1337.

The week ahead should therefore see a continuation down, but there is a possibility that the long term cycle may have some life in it yet and could allow for another pop above Fridays high, further back testing the validity of 1370 as the top.

On Friday, I suggested that the market would close actually closed at 1340 and quotes then dropped to 1338. I believe that cash will gap down below this when it opens on Monday and then can fill the gap before heading down for the week.

The alternative scenario is that 1137 will hold and there will be an attack on Fridays high again.

The Week Ahead...
I will now be evident to all and sundry, exacly how imortant this 1337 level is and I suspect that there will be a few lining up to buy it again on Monday, but I do think that it has now reached the point where it should now break.

As you already know, I believe that the longer term cycles are in the process of rolling over and a break of 1337 is likely to seal the turn. This should result in a fairly sharp move down as stops are tripped and the new trend becomes evident.

"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. "

"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. "

Last week was a throw away week for the market as it went nowhere, closing flat on the week, simply marking time due to the remaining  bullish sentiment of those larger time cycles is my guess. With another week nearer the sweet spot of that cycle, that puts us back where we were last week.

That means that  I am looking for the gap down again on Monday. Visitors to the Khalsas Free Friday post in Kennys Elliott Waves Blog on Friday got an early warning of this, with the immediate target level of 1307 also posted. You will see from the Pivots table below, that 1307 also happens to be the Daily S3 for Monday.

Pivots Monday Weekly Monthtly
R3 1374.24
1397.90 1480.68
R2 1357.35 1370.49 1410.82
R1 1347.56 1354.13 1387.21
Pivot 1340.46 1343.08 1340.96
S1 1330.67 1326.72 1317.35
S2 1323.57 1315.67 1271.10
S3 1306.68 1288.26 1201.24

Current Week Month   Stock Market Trading Trend Down Year  Stock Market Trading Trend Up
Open 0 1365.21
High 0 1370.56 1370.56
Low 0 1329.17 1249.05
Range 0 41.39

Previous Day  Stock Market Trading Trend Up Week Stock Market Trading Trend Down  Month   Stock Market Trading Trend Up Year  Stock Market Trading Trend Up
Open 1348.69
1340.07 1329.48 1116.56
High 1350.25 1359.44 1364.56 1219.8
Low 1333.26 1332.03 1294.70 1011.40
Close 1337.77 1337.77 1363.61 1258.84
Range 16.99 27.41 69.86

Key Support and Resistance Levels


High? 1344
Current 1337





Low? 1273

Bold Numbers = Stronger Support and Resistance

Trade Set Ups for the Week Ahead

Last weeks trade set ups were not taken as it was obvious from the start that the alternative scenario for the week was in play, as discussed earlier.

It was not given as a trade set up last week as I planned for the gap down, but readers were already aware from previous comments that adding a position around 1354 was desired.

Since that was given as the alternative scenario and the trade was posted live on the forum page, I will add another short position from there to my 'Open Positions' here.

This week I want to add another position short. If this had been a daily newsletter I would have added it at Fridays high at 1354 but as it is I will have to let my money management rules take care of me.

No points were banked this week as the trades were not taken, but the open position trades are currently runnint at 33 and 20 points in profit.

Stop loss levels on both trades should now be lowere to just above this weeks high at 1359.

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 1339 1309


Open Positions

Kennys Stock Market Position Trade

When Opened Market Trade Open Target Stop
Week 2 May S&P 500 Cash Index Sell 1370 1175 1359
Week 9 May S&P 500 Cash Index Sell 1357 1175 1361

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