Tuesday, June 23, 2009

NDX and ERX Setting Up

I would not be short here(not now at least). NDX showing some very strong divergences on the 15 min charts here and a bounce could be in the works. A classic BAIT and SWITCH day?? That would be THE surprise not many expected. we shall see....

FYI: for those who do not know what i mean by positive divergences(P.D.).

P.D> kick in when you see an extended selloff yet with every push lower, the MACD and RSI reading create higher lows indicating a lack of downside momentum and i need to see a falling wedge pattern reach an APEX while MACD and RSI creating very visible higher lows. see chart.


ERX at 26.74


Talc said...

Hey Stewie, thanks for the charts. I've got a little ERX myself. Where would be a logical target you think this could end up? It seems to me that the gap at 30 would be pretty hard to overcome, given the importance that region has had over the year so far.

Stewie said...

hi talc.

ERX is extremely oversold so a severe bounce will trickle in. i say trickle because the bulls are very gun shy right now. But if ERX starts to manifest any sort of strength and we see many shorts run for cover than ERX should target1 at 28 and then the more powerful area of resis would be 30 where that gap from a couple of days ago.

Shawn said...

Stewie, good charts. But I think your NDX has a better set up than ERX.

I am not sure if this is correct or not, but my experience tells me using "internal" analysis on these 3x ETFs are not useful. Remembered they are non-linear as they derivatives and move according to % of underlying benchmark.

Stewie said...

shawny: i think you might right with your comments but ERX sure is working right now.

Shawn said...

Thanks Stewie. I am in ERX at 27.4

Let us know when you exit! Thanks!

Stewie said...

shawny: daily chart on ERX started to form a tail in here. 28 -ish is was my first target and if you are patient and can handle some wiggles then 29-30 is very possible this week.

Shawn said...

Yes, I saw multiple inverse head and shoulder pattern this morning. SPX is testing the neckline at 898 from below and may form the right shoulder, so does XLF.

Ticker Street said...

I would look at XOM, XLE charts for ERX. Technicals on 3x ETFs sometimes convey nothing. FAZ RSI, MACD are in grave but it refuses to rise.

Carlos JĂșlio said...

Hi Stewie thanks for your charts.
Nice work thanks.
My 2 cents

Spx close below 935 = 895.10(+2.06)
Between range that I predict to very short term.
Below 908 I expect [880,893] very short term.
Below 935 I expect [790,820] medium term.
Remember two possibles scenarios:
Dont`t break range [880,893] and we will see pullback again target expect between [935,921].
Break range [880,893] and we will see soon 850.

If spx close hourly above 908 I have to reduce some shorts.
Tomorrow resistance Hourly 908,900. Macd near to invert again but have to confirm with a close above 908.
Wednesday’s Economic Data
8:30 a.m. May Durable Goods Orders
10:00 a.m. May New Home Sales
2 p.m. FOMC Meeting

Click to zoom in.


and DAX -
Enjoy big trades for you

Talc said...

Hey Stewie,
ERX was doing pretty nicely today eh (at least until noon). Do you have any thoughts on this going forward? Seemed like a pretty weak afternoon, even though the day still ended positive.

I was looking at the hourly chart and couldn't help but notice the 3 equal pushes to the downside over the last couple weeks. Normally I'd think that after three pushes a move might be exhausted, but the market in general has seemed decidedly negative.

Stewie said...

ooops. my bad TALC. just caught your email/comment dude. Ya, i am hoping you guys got of ERX on today's pop! my target was 29-30. shoulda been out by now.

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