Nemo's Findings

Here are the weekly pivot point updates for the week of 9/25.  I've also noted the daily pivot points for monday in there, as well as a turquoise line on spy that was the premarket high for Friday upon which we basically closed.  Important for Friday, likely temporary.

It will be an interesting week for the levels.  This is the last week for both the Quarterly and Monthly levels...great...lotsa' work next weekend,  As you can see on the SPY chart the Semester S2 played a relatively important role for the last two days.  Also, notice the arrow on Thursday's bottom.  That was a weekly support level on the dot, so that confluence area of Weekly/Monthly support played a significant role this week.  As you can see, there is a fair amount of overhead resistance signified by the confluence levels on the IWM, however SPY will likely lead the parade as it usually does.

From a macro point of view, Europe is seemingly the catalyst this week. The question would seemingly be...If they come out with their own TARP does the market like it or hate it?

spy:   http://www.freestockcharts.com?emailChartID=70f5244f-bbfb-4a33-827b-f3fb8e418404

iwm:  http://www.freestockcharts.com?emailChartID=33554400-19c4-4a2a-9ecd-45604caf9de4

Multi Time-Frame Pivot Analysis

Pivot Point analysis is a mathematical derivation based on previous price action.  It defines levels of probability for likely future price action.  Market Makers have often used Pivot Points across multiple time frames to find common adjacent levels between time frames that served as confluence zones - stronger levels of resistance or support ,than a single area alone.

Have you ever noticed that price stops or rises to a certain level that never particularly coincides with a previous level of support or resistance?  Oftentimes you will find that those levels coincide with prices calculated at a multi-time frame level.

I regularly employ charts of the SPY and IWM that map these levels, along with significant Fibonacci retracements, to define levels that may affect price action should they reach those levels.  Sometimes single levels end up affecting price action, many times, areas that contain multiple levels from multiple time zones, serve as confluence zones that are more likely to affect price.

Be warned, these levels are not predictive, but they do provide areas that may warrant your attention as price action approaches them.  I will provide on a weekly basis, these levels for the SPY and IWM, and will hopefully provide a recap of how those levels played out at the end of the week for the SPY to illustrate the concept.  So...

ñ     Pivot levels will be demarcated in Yellow and noted as Weekly, Monthly, Quarterly, Semesterly, Yearly.

ñ     Resistance levels will be in progressively darker blues.  The darker the color, the longer the time-frame.

ñ     Support levels will be in progressively darker reds.

ñ     Fibonacci levels will be

◦       Red-most recent swing low or high

◦       Turquoise-from July '10 swing low

◦       White-from March '09 swing low to April '10 swing high

◦       Green- (SPY only) from 2007 high-2009 low.

ñ     The 50 SMA and 200 SMA will be labeled (remember these will change daily so you will need to import the format links to adjust them)

ñ     I will also provide subjective price levels as defined by the price action..I have found that some price levels, contrary to “Candle Theory”, will continue to have some significance even after they have been eclipsed.

ñ     You will also find links to import the format into Freestockcharts.com, and you may amend them as you see fit.

The charts will look very busy on larger time-scales.  They are primarily designed to be used for the upcoming week.  The 15-30 minute scale is optimum.

Nemo

Nemo's Findings - Mid-week update

SPY multi-time frame mid-week review week of 9/18

Click here to read the previous issue

These observations are made on the 5 minute time-frame at the end of each day. 

1.      Monday we gapped down on the open from the S2 daily/ S2 quarterly level

2.      and proceeded down to touch the 50% retracement of the July 2010 bottom, which became the low for the day.  The market then proceeded to a high around noon and retraced to fuzzy support at the weekly pivot point.

3.      After breaking above VWAP, SPY then gapped down just after 2:00 pm to test $.04 above the weekly pivot point before heading higher.  One might argue that this candle combination (big down candle followed by a larger green candle) may have been a stop buster.  Many programs will go long above the VWAP, by breaking below the VWAP, it may have triggered stops that then triggered buying just above the WPP that was the highest volume since before noon. Forming another swing high, SPY retraced to VWAP before...

4.      peaking at was, on that day at the confluence of a price action from 9/2 and the Quarterly S2 level (established July 1^st). It was also the same price level as an intermediary daily pivot level, that is...one which is in between (in this instance the Daily Pivot and Daily S1)

5.      Tuesday we open, after the overnight rollercoaster of the Italian downgrade, at the same level as #4 and continues to retrace to the daily pivot before proceeding to rally to the price high from last Friday.  Meandering about for the afternoon, levels began to drop

6.      until it found support, albeit only for 20 minutes at the Monthly Pivot Point where it retraced only to continue it's  descent until...

7.      reaching the 38.2% retracement of the 8/9 swing low where it loosely double bottomed and retraced before continuing it's downward movement toward the pivot point into the close

8.      Wednesday (Awaiting the Bearded one)  price action first found support at the break out area from Monday, which coincided with Monday's daily pivot.  (I don't put the daily pivots on the multi-time frame analysis because they, well, change daily...)

9.      Proceeding down to the Semester S2 support SPY bounced for 10 minutes until..

10.   it continued it's descent to the Weekly Pivot point, where it formed a double bottom, and rose to regain support of Semester S2 (o.k...it didn't  quite make it to the WPP, ;))

11.  After the Bernanke siesta, SPY continued downward bouncing at the 50% retracement of the July '10 bottom/daily S2, then retracing to VWAP...

12.  Before reaching a subjective price level at 118.10 that first began having significance back on the 29^th of August (arguably the 24^th), then retracing again to the WPP before...

13.  the final denouement that found it closing out between the 23.6% retracement from the 8/9 low and the Weekly S1.