Opening Play for Wednesday 10/15

10-14-2014 9-27-28 PM

Good Morning Traders!

After three days high to low, the index futures had a consolidation day – trading back and forth through opening price several times.

The SPs and Nazdaq had an inside range day –  the Russell poked above the previous days high while the Dow traded below the previous day’s low.

Volume was the heaviest in many days. The VIX has reached its highest level since the first half of 2012.  The RSI reading on the DOW has also dropped  low but is still not at oversold readings made earlier this year.   Big picture, the 2-period ROC made new momentum lows 2 days ago…there are no buy divergences, just short term oversold still.  The market may stay in limbo land for the morning session as Beige Book will be released in the afternoon.

The charts above show the converging trend lines on the hourly  Nazdaq futures.   The Russell shows where good resistance came in.  The 2-period ROC is poised to turn back down on  a Sell Short day.  But since there is an inside range day on the SPs – an upside test first is still possible.

UPDATE:    Markets broke from the Inside range day in the overnight session…..Lower Keltner Channel on the weekly charts may be touched for the first time in many months.

Note how the Silver and Dollar chart appear almost inverse.   The Dollar index is on a grail buy, but sometimes after an extended trend, the market can remain in a choppy consolidation period for 2-4  weeks.   The EC has a three bar triangle breakout pattern –  a move in either direction can start in the overnight session as ECB President Draghi speaks.

Big movers were Crude  – downside breakout  from three bar coil –  look for Z day morning – two way trade.  Big round numberm 80 can come into play.  Likewise with the upside breakout in the Copper market…..reactions down needs to hold 106.25.

Bunds –  all time highs….Check out a daily chart of the US  Five Year notes…..not many people look at  these.

Correction –  there are Pinball sells on the tradesheet on SPs and Russel…- SPs continue to be great trade!


Tradesheet from Snagit


Markets in BO Mode:







BOs from snagit