ONE44 Weekly Newsletter
SP
The SP has now rocketed off of the long term levels that we mentioned over 3 weeks ago, as being the area that could take this market back to new highs for the year. Last Monday they traded just below the 200 day average at 1261.00 and the 1×1 angle coming up from the low made on 3/6/09 at 665.75, this level was 1266.00. They now are all the way up to the 1×1 angle coming down from the high for the year at 1373.50 on 5/2/11, that angle is 1327.00 on the nearby continuation chart. The close on Friday was above the angle and on Tuesday it must stay and close above it to confirm that the market wants to go to new highs for the year. The 1×1 is very important and a close back below it on Tuesday would give us a sell signal that should take them back down to test the lows that they rallied from last Monday. Along with a close back below the 1327.00 1×1 we would need to see a close below 1306.00 to confirm to us that they will not be going for new highs for the year right now.
NASDAQ
The NASDAQ rally also held their key long term levels before ralling last week, they went right into the 2×1 angles coming up from the 2 lows on 7/1/10 and 8/27/10. The 1×1 angle coming from the high for the year on 5/2/11 at 2428.00 is at 2382.00. We would like to see the SP get the second close above their 1×1 at 1327.00 and the NASDAQ close above their 1×1 at 2382.00 to help confirm the very positive view, of new highs for the year. Whether you trade just the SP or NASDAQ it is best to keep an eye on both for the key levels. If the NASDAQ does not get up to their 1×1 and the SP closes back below their 1×1 at 1327.00 on Tuesday, it will take a close below 2300.75 to tell us their rally is over.
EURO
You have now seen how important the 1×1 angles are with the rally off it below at 1.4100, it took the market right up to the 1×1 coming down from the 1.4925 high on 5/4/11 at 1.4500, they traded above this level, but did not close above it and until it does we would look for a test of the 1.4040 low. On a close above 1.4500 we would look for new highs for the year. The 1×1 angles do not come into play that often, but when the do you have to respect them.