CFDsPros Daily Analysis March 4, 2010

[CfdPros]

S&P 500 Visual Trading Update


General Notes:

Some days ago, we talked about a change in behavior: Bad news with higher
stock prices. Today it seems that the opposite has arrived: good news (in
the manufacturing area) with a muted response from the markets.

Actually we start to see the beginning of what a distribution should look
like: pre-market futures and starting of session's highs, while the end of
the day moves the indices lower. Furthermore, the fact that the more
speculative indices, like the RUSSELL 2000 (Small caps), is over its highs,
while the more heavy ones (S&P500, DOW) are far from theirs, is becoming an
alarming signal.

We read today how all this was happening in the toping process of 2000 and
2007. If you follow us daily, you already know that we believe the whole
March-2009 rally is a bear market rally, but it would be very frustrating to
see such deep retracements (to the upside), if we did not see the parallel
historically.

In our opinion, the most important feature of yesterday was the attempt of
the EUR/USD to breach the upper boundary of its large trading range. So far
it failed, and did not have the follow-through that you should expect, in
view of the amount of Stop losses positioned just above this breakout area.
Maybe today?

Current Trading Plan:

Position: OUT
Last (26-02-2010) Closed position @ 1115 (+$0)
Long: --
Short: Below 1109
Exit by Stop Loss: --

Technical Indicators Notes:

Last time we said: "Theoretically, the index has arrived at the level we
mentioned. It is now or never. If it will go further, in big volume (look
volumes stats in the different financial outlets), we will know that it
wants to take out the January highs, and that the start of the next bear
market have been postponed. We move our LONG SL to breakeven, because it is
the best thing to do (money management wise)."

Still waiting for a decision. Our position was closed, at breakeven, and now
we have only an entry level for a fresh SHORT. It looks like a broadening
pattern which is usually bearish, when it is at tops. By the way, did you
see how exact was the reaction at the 78.6% Fibonacci retracement level
(daily chart)? This shows you how technical these markets have become.

RSI-STOC Combination: Negative posture: RSI at 50 while STOC lower.
ATR: At a level where volatility starts to increase.
MACD: Daily in a positive setup and momentum, but H4 have reversed -
slightly negative.

Charts Legend:

Price Window:
Simple Moving Average (20): Green
Bollinger Bands (20,2): Violet
Support & Resistance price areas: Pink and Light Green areas
Trend lines and Channel Boundaries: Blue
Elliott Waves Counts: Black and Blue numbers

Indicators:
RSI (10): Blue, STOC(5,3,3): Green, ATR(5): Blue
MACD (12,26,9): Blue, Signal: Red, Histogram: Green
Indicator trend lines and effects: Magenta

Signals:

Long: Above the Green line
Short: Below the Red line
Exit position: On crossing the Cyan line
SL in case of triggered level: Dashed Cyan Line

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CFDs trading analysis written by Moshe Shalom for .

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Disclaimer
Trading Futures and Options on Futures and Cash Forex transactions involves
substantial risk of loss and may not be suitable for all investors. You
should carefully consider whether trading is suitable for you in light of
your circumstances, knowledge, and financial resources. You may lose all or
more of your initial investment. Opinions, market data, and recommendations
are subject to change at any time.
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