Intraday Commentary ~ 11/20/2009

By
woo
– November 20, 2009Posted in: Intraday Commentary

Idan

My Target for GLD remains around  155.6-116 in the short term, I believe we could see a nice correction once we hit around those levels… That’s where my fib projections take me.

Dow Jones Daily: I said i would play the megaphone formation… well here we go… I bought DXD at 30.32 today.
Dow Jones

Woo:

1 month chart update of SPX:

woo1month

So after hitting the 1088 fib, we bounced and stayed above the 1090 cluster of fibs as expected. The 1090 area was a good area to buy calls. The 1096 area was the initial top to look for and it hit on the dot as the first area of resistance. There are two fibs in this area, and there’s still a chance we could drop. I wouldn’t be surprised if the 1080 area were to hit, so it was wise to get out of at least half the position of SPY calls going into EOD at the 1096 level. This way you lock in profits and if the market heads higher you have a good position on those calls, and if the market heads lower, your losses are hedged by the profits made, and the profit position going into closing. It is always dangerous to hold options overnight during opex week because decay will hit options even if they are next month, much more than they would at other times of the month.

Ideally for a call position you want to see a rise into open to the 1105 level where you’ll hit the first trend line resistance, but the market may go horizontal for another day to decay options. This can hurt both bear and bull and leave the market in limbo for another day into the weekend. On the longer term charts the market can still drop a good amount more without losing the bullish bias. We’ve had a 3 wave movement down so far to the 1088 lows with the 2 of 3 being a flat correction. The big question is whether this 3 wave will finish, or it will go down and complete a 5th wave south. I have a feeling if we do head south, we’ll stop at 1085, and that is an area where I would consider grabbing a nice experimental call position for a potential 5 of 5 wave finish and then a rise up. This would create some problems though and mean there could be more dropping after the bounce there, so I’m leaning more towards heading higher into tomorrow or going horizontal. If you have a call position going into tomorrow the 1090 area is the key place to watch. A drop below 1093 technically will be the first short term bear sign, and you may actually want to have stops below 1092.9 (maybe 1092 or so if you want to lock in profits). If 1090 breaks, 1088 break would be further confirmation of a bigger fall to come, once that fib breaks that could mean that even though we may bounce one day or so, most likely a bit more downside is to come.

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