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MARKET OUTLOOK: E-mini S&P 500 / $SPX
Early US session
(TODAYS TECHNICALS)
*TITLE/TOPIC: The New Bear Market
*CHART: The Chart is NOW technically Bearish.
*PULSE SCAN: (The Pulse Scan SWING VIX Indicator):
The indicator has lost upside momentum and is now on the side.
*SO WHAT? "NO TRADE ENTRY DAY
- in the E-mini S&P 500. Watch for the GAP on the Open and trade the RVSL
accordingly.
*MARKET WATCH: Yesterdays price action has now decidedly turned Bearish. The S&P 500 managed to close below the 50-Day Trend Line support and well below the 10-Day support
as well. This could very well be the beginning of the next Bear Market. The
True
Test could come later this morning when the Employment numbers come out.
Bond Watch: Expect steady to slightly lower interest
rates today. The 10-year Note is now in a Bear Market. ALL rallies should be faded (Shorted) i.e. expected to short lived.
Homeowners should lock in rates today on Refinance loans. Interest rates should continue to climb into the fall UNLESS we
get a significant sell off in the stock market. Once fear and panic set it then the Bonds should be able to rally back into
Bullish territory. However, until then expect interest rates to continue to climb. Steady to slightly lower rates are expected
today.
Day Trade Entry: (E-mini S&P 500 FUTURES) Buy @ 976.00,
Stop-Loss @ 971.00, Profit Target @ 982.00
MARKET TYPES
*"GAP-MOVE" ENTRY Days: These days are more common after
a significant rally or sell-off they appear during a brief
period of consolidation within the trend. You must remember to watch the market and
wait on the pullback before fading
the GAP and entering the trade. However, watch for the whipsaw that is more common
on these days especially when
taking
on the reversal.
*NOTE: Remember to use tight 4.25 - 7.25 pt stop-losses in the E-mini S&P 500 if you decide to "DAY
TRADE" instead of taking the exact recommendation. Otherwise, use the recommended
"Volatility Stop-loss". Also, watch for the GAP on the Open and trade the RVSL
accordingly.
*"BREAK-OUT" ENTRY Days: These days are less common but have a very high accuracy
rate and are major trade signals. These types of breakouts tend to be very powerful moves and are typical within the current
market trend. Usually, they occur while in a brief consolidation within the current trend after a strong move (but not always).
*NOTE: Remember to use tight 4.25 - 7.25 pt stop-losses in the E-mini S&P 500 if you
decide to "DAY TRADE" instead of taking the exact recommendation. Otherwise,
use the recommended "Volatility Stop-loss". Also, watch for the GAP on the Open
and trade the RVSL accordingly.
*"TRENDING" ENTRY Days: These are days
were the market is expected to rally after a pullback. It should be noted that although it is also possible to get whipsawed
on trending days as the market tends to run out of steam and consolidate intra-day these trades tend to yield substantial
profits as the market begins to break out into higher highs as the trend begins to resume. *NOTE: Remember to use tight 4.25 - 7.25 pt stop-losses in the E-mini S&P 500 if you
decide to "DAY TRADE" instead of taking the exact recommendation. Otherwise,
use the recommended "Volatility Stop-loss". Also, watch for the GAP on the Open
and trade the RVSL accordingly.
*(THE BIG PICTURE!) Both
the Ten-year Note and the US Stock Market have run their course. As a result Interest rates should remain steady to slightly
higher. We may have seen the end of the historic lows in short-term interest rates. Bonds wont recovery until we see a significant
sell off in the stock market, and/or the Fed starts buying back the long end of the yield curve in a last ditch effort to
prop up the economy. The only thing that is holding this economy together right now is the Real estate market (especially
the Refinance Boom!). Once that bubble pops ALL HELL will break loose and that will send the stock market into a
parabolic move to the downside. A Bear market of historic proportions. The Fed does not want to see the only thing holding
the economy together Collapse because of rising interest rates and a falling Bond market. If necessary the Fed will not only start
buying the long end of the yield curve but will also continue cutting interest rates until we see a full economic recovery
even if it means rates go to zero!!! I still believe that the Euro should still outperform the Dollar in
the long run as the stock market eventually sells off well into catastrophic proportions thus bringing about fear and great
panic abroad. After the next stock market downturn we should consolidate on the next retracement off the new lows and probably
wont see a "V" type recovery but instead a very long "U" shape recovery that could last several years or at least until
the U.S. economy experiences a full and total economic recovery. However, if our long-term outlook is correct (the S&P
500, NASDAQ 100 and the DOW should drop significantly below there 50-Day Support levels!) If this happens both the Euro and
the Bonds should continue on their upward course toward the 1.50 levels and BEYOND without any
significant technical damage on pullbacks. However, this is just an opinion and anything could happen between now and then
to significantly change the overall perspective as well as the future economic outlook.
*NOTE: The "RVSL" - Reversal technique
(Shorting instead of Buying or Buying instead of Shorting on the initial entry) should be employed on all GAP-Up or GAP-Downs on the Open (on "RVSL" days in an Overbought/Oversold situation); in conjunction
with using the Stop & Reverse once the initial Long/Short Entry Trade has been triggered during Overbought and Oversold
market conditions. *DAY TRADES:
(Unless you are Day Trading you should always use the recommended "Volatility Stop-Loss"). A reasonable profit target on Individual Stock trades is in the $1.25 - $2.25
range with an initial $3.00 - $7.00 stop loss. The same is true on all Futures
trades. A reasonable profit target on Futures trades is in the 1.25 - 2.25 point range with an initial 3.00 - 7.00 point stop
loss. You can widen your stop loss or lesson your stop loss and or profit target according to your tolerance for risk. On
the Euro/USD FX & Euro Currency Futures contracts you may want to consider a 10-pip profit target w/an initial 15 - 30
pip stop loss. Example: 1.0700 entry point with an initial stop-loss @ 1.0690 and a profit target @ 1.0710. Your best bet is to allow the market to trigger the entry
points instead of chasing the market (dont worry if you miss a break-out) and avoid after hours and pre-market trading. In
other words dont trade on the close i.e. dont hold over night positions, and dont enter the market until after 9:30am EST
if at all possible. NEVER!!! Trade ahead of ANY! Government/Economic report,
Earnings News or Fed decision (i.e. interest rate decision) However, there are always exceptions
to this rule!
*NOTE: It is always better to use the recommended
Volatility Stop-Loss recommendation below. This will allow you to avoid choppy sideways movement and help to keep your position
safe during intra-day volatility. Also by using the recommended profit target
will help to let your profits run while cutting your losses short. Remember to manage your position with a trailing stop.
Don't ever turn a profitable trade into a loser because of greed.
|
ENTRY POINTS: Buy
/ Sell Recommendations |
|
CHICAGO
MERCANTILE EXCHANGE - CME |
Entry Point |
BREAK-OUT |
Volatility
Stop-Loss
/
Profit Target |
|
ESU3 / $SPX |
|
|
|
|
E-mini S&P 500 FUTURES (GLOBEX) |
*
NO TRADE |
@ ---.-- |
@ ---.-- / @ ---.-- |
* Recommended trade of the day (highest probability trade).
** MOC =
Market on Close.
*** +. 29
= Overbought (+.40 Extreme Overbought) / -.29 = Oversold (-.40 Extreme Oversold)
****
Stop & Reverse.
NOTE: BE
CAREFUL!! The volatility in this market is amazing and holding positions over the weekend could be risky as anything could
happen over the weekend that could adversely affect the position. DONT HOLD POSITIONS OVER THE WEEKEND!!!!
ALL positions are liquidated by the close of each trading session.
However, there are always exceptions to this rule!
*******ALERT********
TRADE
AT YOUR OWN RISK!!!
Please if at all possible try and wait until after
9:30am EST and preferably after 10:30am EST before placing orders. If your trade is not triggered within the 1st
hour of trading then CANCEL the order and stay out! AVOID trading ahead of ANY Government report or Earnings news.
This will give the market some time to shake out the weak hands. Also, because some stocks including the S&P 500 E-mini
FUTURES trade around the clock and/or have after market trading, you will need to wait until the influx of cash has moved
into the market from the sidelines.
A reasonable profit target on Individual Stock trades
is in the $1.25 - $2.25 range with an initial $3.75 stop loss.
The same is true on all Futures trades. A reasonable
profit target on Futures trades is in the 1.25 2.25 point range with an initial 3.75-point stop loss. You can widen your stop
loss or lesson your stop loss and or profit target according to your tolerance for risk. On the Euro/USD FX & Euro Currency
Futures contracts you may want to consider a 10-pip profit target w/an initial 15-pip stop loss. Example: 1.0700 entry point
with an initial stop-loss @ 1.0650 and a profit target @ 1.0725.
NOTE: Don't have time to watch the market? Do you require more than just the standard complimentary service?
Do you require more in-depth analysis, market timing and trading signals? You can have it ALL, specific timing signals that
are tailored to your portfolio, now available on our Premium service. Please check the website for further details and pricing.
Or call (240) 299-5447.or email at ninilamar@lycos.com
THERE IS RISK OF LOSS IN TRADING FUTURES
*VERY IMPORTANT!!!
***************************DISCLAIMER*****************************
THERE IS RISK OF LOSS IN TRADING INDIVIDUAL STOCKS, OPTIONS ON INDIVIDUAL STOCKS, FUTURES,
OPTIONS ON FUTURES, AND FOREX CURRNCIES.
INDIVIDUAL STOCKS, OPTIONS ON INDIVIDUAL STOCKS, FUTURES, OPTIONS ON FUTURES, AND FOREX
CURRNCY trading has large potential rewards, but also large potential risks. You must be aware of the risks and willing to
accept them in order to invest in the individual stocks, Options on Individual Stocks, Futures, Options on Futures, and FOREX
Currency markets. Dont trade with money you cant afford to lose. This is neither
a solicitation nor an offer to buy/sell Individual Stocks, Options on Individual Stocks, Futures, Options on Individual Futures,
and FOREX Currencies.
NOTICE: Hypothetical or simulated
performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual
trading. Also since the trades have not actually been executed, the results may have under or overcompensated for the impact,
if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the
fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely
to achieve profits or losses similar to those shown.
This is neither a solicitation nor advertisement to buy/sell securities. Neither,
Pulse Scan Technologies, its staff nor affiliates are licensed Investment Advisors or Broker Dealers. You should seek professional
advise from your financial advisor before making any investment decisions.
The author assumes no responsibilities for actions taken by readers. The author is not providing investment advice.
The author does not make any claims, promises, or guarantees that any suggestions, systems, methods, trading strategies, or
information will result in a profit, loss, or any other desired result. All readers assume all risk, including but not limited
to the risk of losses.
The past result of any trading or investment system is not necessarily indicative of future
performance.
These views/ forecasts/ suggestions, though
preferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to
change without notice. Though the information sources are believed to be reliable, the information is not guaranteed for accuracy.
Those acting in the market on the basis of these are themselves responsibly for any profits or losses that might occur, without
recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed
that those who trade these markets are fully aware of the risk of real loss involved.
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