Greece, Portugal, and Spain credit downgrades may have put the brakes on this run-up.
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Today SPY attempted a reversal of yesterday's drop, as indicated by the white candlestick. However, it failed to close above the 20d EMA; that is the first warning sign. Also, price could not retrace even 50% of yesterday's drop.
ES needs to close above 1190 tomorrow to confirm the reversal. Failure to do so doesn't necesarily mean it will go down right away, but it would be another warning sign.
Also, Friday was when ES broke to new contract highs. However, the breakout has failed, as we have closed below Friday's RTH lows (1201.5) for the 2nd session now. I think this qualifies as the TraderVic 2B Top. There should be many sellers waiting at 1201.5
It is interesting to note that last week's drop (triggered by the Goldman Sachs (NYSE:GS) lawsuit) started at 1205 in ES. Yesterday's drop (triggered by Greece bond downgrade to junk status, and Portugal debt downgrade) also started at 1205. 
Note how the NYA50R broke below a 7 week range. BPSPX is starting to rollover, but a close below 85 is needed to confirm the reversal.
Nasdaq has held up better, but it also looks like a break below the 7week range is imminent. BPCOMPQ also starting to rollover, a close below 70.5 will confirm.
Looking at the leaders, I see more and more of them closing below the 20d EMA (GS, GOOG, BAC, MA, AMZN, XLF). Without leadership, any market rally will be unsustainable. Unless Monday's high of 1216.75 is taken out within a week, all signs point to this as being the short term top.
Wednesday, April 28, 2010
Potential Short Term Top
Thursday, April 08, 2010
Market Notes for April 9, 2010
Summary
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Bears have something to work with now, as we've had 3 consecutive lower highs. Buyers are still buying dips. I think volatility will increase tomorrow, we could see a 16-20pt day.
For ES, the afternoon session needs to stay in 1183 area, or we could get some profit taking sequences.
Euro: yesterday's trade idea wasn't touched. Let's try again:
Short from 1.3410'ish area, target 1.3350
Tuesday, April 06, 2010
Market Notes for April 7, 2010
Summary
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The market has made a good run in the past 3 or 4 days, so I will on the lookout for some profit taking sequences tomorrow. This week's weekly pivot 1170.75 hasn't been tagged either, though I'm not sure if it will be done tomorrow.
Euro: short 1.3440, target 1.3310
Monday, April 05, 2010
Market Notes, April 6, 2010
Summary
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Current uptrend is well entrenched, and shows no warning signs thus far. Being overbought is fast becoming meaningless. Ascending triangle pattern resolved to the upside. Institutional money has rotated into Gold, Oil, and retail sectors in this phase of the uptrend. Classic Market Profile "P" pattern which indicates the market is accepting higher values. The unfilled gap 1173.5 and today's morning reversal at 1175 reinforces the bullish view. Lack of volatility thus far favours higher prices for later this week. Sellers will want to test today's breakout, so a re-visit of the scene of the crime (1175) is likely.
We could also see yet another bull-trap failed breakout pattern like last week. This has actually created the pre-requisite energy for buyers to take the market to new contract hights during this latest uptrend.
Alternatively, if we see a repeat of today's morning dip, I will look to buy just below the gap fill this time. I may also try to play the gap fade if things setup properly.
Euro: 1.3435 is current resistance, but long on a volume breakout above that level targetting 1.3475
Market Notes, April 5, 2010
Summary
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76% of all Mondays since Jul/09 have closed above session open. 50% of the ones that didn't still closed up above previous close.
So, we have statistical evidence to look for an upside bias on Monday. For the past 2weeks, the Market has been forming an ascending triangle pattern, with the resistance line at 1176.5. Also, Thursday was an 8BNR day, indicating impending volatility expansion. Because of my modest profit targets, I think that even a false breakout could be actionable. Also, Thursday's VPOC > Wednesday's VAH(1169.5).
1.) I will be looking for evidence and confirmation to go long at 1170.5-ish or 1173-ish.
On the flip side, over 84% of all gaps since Jan/10 has been filled, so there's definitely potential for the market to at least have one sequence which attempts to fill at least half of the gap. Market accepted 1168-1169 area as value last week. I observed 7K contracts go long at 1167, which confirms 1168-1169 as value. On thursday, it tried to build value at the 1173 area.
2.) I will be looking for evidence and confirmation to go short at 1180, 1183, 1187.
The overnight session behaviour and 5IB will yield me good clues for the morning bias, and whether there is anything actionable in the first half hour.
If market response to NFP is bullish, I will be on the lookout for buyers to step in around the gap fill area 1173-ish.
If market response to NFP is bearish, I will be on the lookout for sellers to step in <= 1166.
Euro: areas to do business: 1.3475, 1.3485, 1.3515, 1.3535, 1.3565, 1.3585, 1.362
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