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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...
Once again the predicted high of the
week was pretty good as it actually came in at 1346 vs the 1344
forecast.
The expectation was that once the key support at 1337 broke, the next
key level at 1325 would be the next target and key pivot point. I did
expect that it would ultimately give way. The various trend lines were
eneough to provide support and allowed the bulls to recover 1325 on the
first test, but did close under 1337 for the week resulting in a doji
candle on the weekly chart.
It should be no surprise as Doji candlesticks are a sign of indecision
and that mood was clear towards the end of the week.
The
Week Ahead...
It is easy to lose sight if the bigger picture when you can't see the wood for the trees, but keeping it simple on the larger scale of
things, what actually happened this week?.....It was the predicted break and consolidation below
1337....Monday, Tuesday and wednesday then became all about 1325 and
the
channel trend lines supports.
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.
The questions we need answers to this week are, did the break of
1337 seal the deal, and how much support was built up from holding the
trendlines? Enough for another run at the highs?
Fortunately we do not need to know!
As ever, it is not a question of being right or wrong ......it is
impossible for anyone to know
which way it will go. (I had this discussion a while back with some
folks who did not quite get
it, hopefully it is becoming clearer exactly what I was
talking about). There is no point in wasting time trying to be right, the market
loves a trader with an ego and a point to prove.
We will leave 'being right' to those other folks......
What we can do, is to format a sensible trading plan that controls our
risks and gives us every opportunity to bank some points.
That plan for this week will of course be based on the fact that the
S&P500 did indeed break and consolidate below 1337 as expected.
So basically, I want to be short unless the market reverses...in which
case, my money management strategies will kick in to protect me.
|
| Pivots |
Monday |
Weekly |
Monthtly |
| R3 |
1357.97
|
1389.49 |
1480.68 |
| R2 |
1346.64 |
1361.18 |
1410.82 |
| R1 |
1339.96 |
1347.22 |
1387.21 |
| Pivot |
1335.31 |
1332.87 |
1340.96 |
| S1 |
1328.63 |
1318.91 |
1317.35 |
| S2 |
1323.98 |
1304.56 |
1271.10 |
| S3 |
1312.65 |
1276.25 |
1201.24 |
| Current |
Week |
Month
 |
Year
 |
| Open |
0 |
1365.21
|
1257.64 |
| High |
0 |
1370.56 |
1370.56 |
| Low |
0 |
1318.51 |
1249.05 |
| Range |
0 |
52.05
|
121.51
|
| Previous |
Day
|
Week
|
Month
|
Year
|
| Open |
1342.00
|
1334.77 |
1329.48 |
1116.56 |
| High |
1342.00 |
1346.82 |
1364.56 |
1219.8 |
| Low |
1330.67 |
1318.51 |
1294.70 |
1011.40 |
| Close |
1333.27 |
1333.27 |
1363.61 |
1258.84 |
| Range |
11.33
|
28.31
|
69.86
|
208.4 |
Key
Support and Resistance Levels
|
1381 |
Top?
|
1370 |
|
1360 |
|
1353 |
|
High? |
1344 |
|
1337
|
|
Current |
1333 |
|
1326 |
|
1322
|
|
1319 |
|
1312
|
|
1310 |
|
1305 |
|
1303
|
|
1298 |
|
1293 |
|
1288 |
| Low? |
1273 |
|
1268 |
|
1257 |
|
1249
|
|
1225 |
Bold
Numbers = Stronger Support and Resistance
Trade Set
Ups for the Week Ahead
Last weeks swing short entry from 1339 banked 6 points for the week.
The low was 1318 so there was a potential 21 points in the trade.
However,the target of 1309 was just a little bit too optimistic, and in
real time trading it would have been prudent to bank what was available
on the failure to close below 1325.
I still want to allow for that elusive, larger drop to take shape, but
it is perhaps trying to tells us something by its failure to get on
with it. The longer this goes on, the more likely it will be that the
bears drop the ball again.
With this in mind, I will only take this weeks trades it it looks like
the market is going to find resistance. They will not be entered if the
market has dropped first, backtesting the support. That scenario would
probably mean that we are heading for 1360 instead.
The open
position trades are currently running at 37 and 24 points in profit.
Stop loss levels on both position trades should now be lowered to 1351
as that was given this week as the Make or Break for the Blue, bearish
wave count.
NB: That is not to say that 1351 can not be broken before reversing
again. It would just mean that the Blue wave count was negated, and I
would want to lock in some profits on those trades, until it becomes
clearer what is going on....if it happens.
******
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 Day
| Market |
Trade |
Open |
Target |
Notes |
| S&P
500 Cash Index |
Sell |
1335 |
1321 |
Trade Entry Valid
for Mon/Tues Only |
Kennys Stock
Market Trade for
the
Week
| Market |
Trade |
Open |
Target |
Notes |
| S&P
500 Cash Index |
Sell |
1333 |
1303 |
Trade entry valid
for Mon/Tues only. |
********************************
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 |
1351 |
| Week
9 May |
S&P
500 Cash Index |
Sell |
1357 |
1175 |
1351 |
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