Chicagostock Trading

Update: Runners see 1329.75 upside objective met. Adding 9.75 on top of 8.50 locked in. Total of +18.25. Runners don't always play out, but objective is to reduce exposure, take profits along the way, and allow runners to work where if they do, they pay as much as the first and second target combined.

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Yesterday's market action dropped into the 1320 support level with an intraday low of 1317.50 as the market squeezed out the downside. Overnight the trade was a long at 1320 and we have seen Thursday's lows hold providing oppurtunity to lock in intraday objectives on the top side at 1323.50 and 1325.00.  Two thirds of the trade is out and the runner is now doing the heavy lifting with a risk free stop at 1320 and an objective of 1329.75 on the upside. The market is trading very narrow as buyers are swimming upstream and sellers are fighting to break the market lower to close out shorts and lock in profits. 

Following last Friday's squeeze into the sellzone in the Japanese Yen, the market opened lower this week, keeping buyers from that squeeze locked in allowing for the market to run lower and test downside support.  Today the market fell into retesting its monthly lows of .012546 with a low of .012558, giving oppurtunity to take some money off the table on the short side, and allow the market to now work this support.  If this downside is any good, it should be ready to break this monthly low in the coming days and turn lower to retest the .0124 level of where the market broke out late April. Thereafter comes the .011879 low from March, and ultimately the flash crash highs at  .011375. Reversing to take out last week's highs of .012737 gives room to retest the .012881 June 1 high.

The SP500 is back at trading the levels from where it broke down early May around 1350.  The market broke its channel at that point and fell into lows of 1287.25 May 21st, before seeing a small bounce that failed to regain the broken channel and was pushed back down to a new low.  Lows of 1362 were made, holding the year lows of 1259.75, and keeping the gap from last year down to 1352.50 OPEN.  This caught another bounce into 1342 on June 11th which was followed by another pullback that retested the lows.  The market came down to 1297.00 and found support, in turn building a right shoulder as it retested the 1262 low and has built an inverted h/s formation.  Since this right shoulder low the market has grinded higher and is now trading through its neckline of 1342, putting the market back within the channel it broke early May.  Taking this range of 1342-1262 gives us a range of 80 handles, adding this to the neckline of 1342 sees an upside target of 1422 which targets the year highs of 1419.75.  Recalling the upside target of 1441 being the May 2008 highs, the market stopped right at its last level of defense against this high which put in the highs this year at 1419.75.  We went into correction off the level and retested the lows of the year, however keeping the gap open has kept the potential to retake 1441 still there.  With a new target of 1422 now the market is working its way through heavy resistance and sellers. Doing so will give room to finally complete that May 08 high of 1441.  The bounce here is retracing the market to where it failed in May, so this will be an uphill battle as it comes back to where we failed within 1361-1411.75 as the range for sellers to defend. Failing to continue this move higher and falling back below 1297 puts the lows of 1262 in sight followed by the year lows of 1259.75 and the gap of 1252.50 to derail this bull.

Since reversing off 12298 lows on June 1st, the Euro rallied to break its downward channel created from May 1st. This led the market into a short squeeze and a newly formed channel (bearflag) with the Euro running into its resistance range from May 21st within 12726-12826.  The move has given oppurtunity of buyers early this month to take profits against this major resistance level, as well as sellers a bounce into this resistance to defend.  Today we are seeing exactly that, sellers coming into defend this resistance range and pushing the market lower after a strong overnight gap higher.  Going forward, support is seen down to 12540-12455 as the range buyers must look to defend to keep this upward squeeze in place.  Failure to hold this range sees a retest of the 12298 lows followed by next major support coming in at 12164 off the 11874 lows put in June 2010. Moving through 12726-12826 is needed to turn this downard momentum in the Euro and squeeze out the new sellers who are defending this level with next major resistance coming in at 13000 from the broken April 16th lows.

Since the Japaense Yen broke its neckline of .012582 late February, the market completed its downside target by falling into its support range of .011931-.011697 from April of 2011. Since this completion of its downside target and test of support, the market has grinded higher, squeezing out sellers and retracing back through its broken neckline.  Most recently the market spiked to .012881, hitting the top of its rising channel from the lows put in March 2012.  Since this spike high the market fell back into its neckline of .012582 which has acted as support.  Going forward, retracements into this spike high offers sellers a level to defend with stops above this high. Objective is to fall back below the neckline of .012582 and retest the March lows only this time to fall through and into the next major support which is .011375 from the flash crash highs of 2010.  Moving through .012881 gives room into next major resistnace being .013030 and a move through .013160 is needed to regain the bull.