Yesterday
Well we had a fairly narrow range on very low volume without any real stops in between. If you review my support and resistance numbers you can see how they came into play but none provided proper support with only the 861-862 giving resistance in the morning before we broke lower.
Not holding the 850 range with at least some support is quite surprising but also shows that traders and investors are getting tired of the back and forth action and choose to remain on the sidelines.
Today
Its Friday today, end of the month, and we are back to where we started a week ago. My call for being 60 points away last weekend did not hold true and I can see ourselves closing slightly below the 840 today. I would expect volume to remain calm with a potential of a run into the high 830's.
Friday, January 30, 2009
Thursday, January 29, 2009
Fake or real breakout?
Yesterday
Well we did get our confirmation in style yesterday leaving the 850 behind with strong committment. I said yesterday the bulls need to make a stand here and they did. I had stressed the significance off the upper range that were closly bundled together from the 850 range towards 870 with many key points in the middle. The 861-862 played a big role and was the bottom at 860.09 right after we gapped open in the morning. We slowly inched towards the 868-871 at 869 in a narrow range until we had our breakout at 1:30.
If you look back at the post on Saturday I said the following:
The breakout can be confirmed using 2 possible scenarios. Either 2 very strong up days on big volume or the second more likly scenario is a strong day towards 857, followed by a distribution day possibly retesting the previous resistance range (840) and then a third followthrough day breaking the previous 857.
On monday we rallied towards 851 giving it the first test followed by an intraday retracement of exactly 50% (Friday low to Monday high). Tuesday we went through distribution with the low of 835.40 that I had called as the low before hand (833-834) and tests at the 850 that were a bit short. Yesterday we had the strength I was hinting at and we followed through breaking all major resistance points. Closing above the key averages of 870 (both 20 and 50) is quite a strong sign.
Now on the cautionary side - while it appears we did break through it was still not on volume levels that give me a 90+% confirmation. We did have a strong day but it was weaker then any of our days last week when we were trading in wide ranges around the 800. So be cautious here on entry for the long side.
Today
We gap opened yesterday without any attempts at a fill, considering the significance of the 850-860 range I foresee that we will see this during normal trade hours. So wait for this retracement to tell us if this was a real breakout.
Looking back at the post from Saturday take a look at the first graph and look at the Nov high and Jan high trendline. Looking at where we are now this trendline will bring is to around 900-904 which we remember as a key resistance range during our early January trade action.
How to trade this?
Well we did get a strong move over the past 3 days so here we can take a breather now and let the market tell us what to do. Remain on the sidelines until the market has settled down and absorbed this move.
Well we did get our confirmation in style yesterday leaving the 850 behind with strong committment. I said yesterday the bulls need to make a stand here and they did. I had stressed the significance off the upper range that were closly bundled together from the 850 range towards 870 with many key points in the middle. The 861-862 played a big role and was the bottom at 860.09 right after we gapped open in the morning. We slowly inched towards the 868-871 at 869 in a narrow range until we had our breakout at 1:30.
If you look back at the post on Saturday I said the following:
The breakout can be confirmed using 2 possible scenarios. Either 2 very strong up days on big volume or the second more likly scenario is a strong day towards 857, followed by a distribution day possibly retesting the previous resistance range (840) and then a third followthrough day breaking the previous 857.
On monday we rallied towards 851 giving it the first test followed by an intraday retracement of exactly 50% (Friday low to Monday high). Tuesday we went through distribution with the low of 835.40 that I had called as the low before hand (833-834) and tests at the 850 that were a bit short. Yesterday we had the strength I was hinting at and we followed through breaking all major resistance points. Closing above the key averages of 870 (both 20 and 50) is quite a strong sign.
Now on the cautionary side - while it appears we did break through it was still not on volume levels that give me a 90+% confirmation. We did have a strong day but it was weaker then any of our days last week when we were trading in wide ranges around the 800. So be cautious here on entry for the long side.
Today
We gap opened yesterday without any attempts at a fill, considering the significance of the 850-860 range I foresee that we will see this during normal trade hours. So wait for this retracement to tell us if this was a real breakout.
Looking back at the post from Saturday take a look at the first graph and look at the Nov high and Jan high trendline. Looking at where we are now this trendline will bring is to around 900-904 which we remember as a key resistance range during our early January trade action.
How to trade this?
Well we did get a strong move over the past 3 days so here we can take a breather now and let the market tell us what to do. Remain on the sidelines until the market has settled down and absorbed this move.
Wednesday, January 28, 2009
Well are we convinced?
Yesterday
We did get another push, however momentum and volume was lacking yet again, however we are on the upper end of key resistance areas that is being approached on an ascending triangle so be cautious on the short side.
I am glad my call for the low worked out. I had mentioned that if we are to retrace we should not get back to the previous days low and stop at the 833-834 range - the low of the day ended up at 835.40. I was looking for a close above the 850 range and we did not quite accomplish that but we edged a bit closer.
We are increasing in price as volume is declining so be very careful on both sides of the trade. The bulls do have a chance here to step in with volume as they are only a few points away from key resistance areas.
Support & Resistance
I am going to focus on the upper areas today. All of the next resistance lines are very closely bundled together so be careful here.
868-871 = key areas for 50 and 20 dma
861-862 = the last big bottom before we dropped below the 850 range.
857 = you remember the significance of this number previously. I do believe it will come into play again
850 = upper edge of our 2 day ascending triangle with a close just 5 points away
839-840 = we know the importance here, it took quite a bit of work to get this broken and it still remains a weak support point.
833-834 = this should be our last barrier before the 820 though it is my feel that if we are to revist this point we can end up at the 829 instead as it carries more strength.
Unfortunately we have many resistance areas on the upper range which makes it difficult to trade in either direction.
Today
We should see quite a strong day today. We are on the third day of our important "breakout" so we need to follow through. We are making new peaks, or at least testing the upper ranges while momentum is dropping. Bad Sign so the bulls need to make a stand here.
How to trade this?
Today is going to be a bit more difficult. I would remain on the sidelines yet again unless we hit the 870 range. Here we can easily go short however I do not believe this will be reached today. My call would be a stall anywhere from 857-862 but again, difficult to trade unless you can closly watch volume and time.
We did get another push, however momentum and volume was lacking yet again, however we are on the upper end of key resistance areas that is being approached on an ascending triangle so be cautious on the short side.
I am glad my call for the low worked out. I had mentioned that if we are to retrace we should not get back to the previous days low and stop at the 833-834 range - the low of the day ended up at 835.40. I was looking for a close above the 850 range and we did not quite accomplish that but we edged a bit closer.
We are increasing in price as volume is declining so be very careful on both sides of the trade. The bulls do have a chance here to step in with volume as they are only a few points away from key resistance areas.
Support & Resistance
I am going to focus on the upper areas today. All of the next resistance lines are very closely bundled together so be careful here.
868-871 = key areas for 50 and 20 dma
861-862 = the last big bottom before we dropped below the 850 range.
857 = you remember the significance of this number previously. I do believe it will come into play again
850 = upper edge of our 2 day ascending triangle with a close just 5 points away
839-840 = we know the importance here, it took quite a bit of work to get this broken and it still remains a weak support point.
833-834 = this should be our last barrier before the 820 though it is my feel that if we are to revist this point we can end up at the 829 instead as it carries more strength.
Unfortunately we have many resistance areas on the upper range which makes it difficult to trade in either direction.
Today
We should see quite a strong day today. We are on the third day of our important "breakout" so we need to follow through. We are making new peaks, or at least testing the upper ranges while momentum is dropping. Bad Sign so the bulls need to make a stand here.
How to trade this?
Today is going to be a bit more difficult. I would remain on the sidelines yet again unless we hit the 870 range. Here we can easily go short however I do not believe this will be reached today. My call would be a stall anywhere from 857-862 but again, difficult to trade unless you can closly watch volume and time.
Tuesday, January 27, 2009
Almost made it ....
Yesterday
Well the morning was setting up like a text book example. We had our rally off the open, retraced slightly and came in with strong buy volume. After having reached 850 however weakness set in. We traded closer and closer to the 840 that I thought was going to hold and broke for a 50% retracement. While this is to be expected and normal I would have liked to see more strength especially in the late afternoon. Closing below the 840 shows that the bull needs to come up with some more strength in order to continue.
From a trade perspective, I traded just a little as I saw the weakness in the market place. However those were very short term range positions. Sometimes its best to wait and see what the market decides especially with the action after 3:00 which clearly showed further weakness.
Today
We we are technically in an uptrend now so we need to ensure we will remain above the 840 and give the 857 a test here. Since we did not have the strength yesterday we can still follow up today with another up day, something I believe will occur with a close between 850 and 857.
How to trade this?
We have some great trades ahead of us again. We have the 840 range which gives you great protection but gains are limited. If we break 840 on the upside best chance is a run to 850, potential 856-857 so its 10-15 points. A break below the 840 will get us back to yesterdays low, though it is my expectation if that is to occur it will stop at the 833-834. A break of this range will of course bring us back to 820. So we have good potential for trades here today.
So keep those numbers in mind for today, and stay cautious. We still have potential to go into either direction though it is my feel we may test the upper ranges of the triangle I had shown on Saturday.
Well the morning was setting up like a text book example. We had our rally off the open, retraced slightly and came in with strong buy volume. After having reached 850 however weakness set in. We traded closer and closer to the 840 that I thought was going to hold and broke for a 50% retracement. While this is to be expected and normal I would have liked to see more strength especially in the late afternoon. Closing below the 840 shows that the bull needs to come up with some more strength in order to continue.
From a trade perspective, I traded just a little as I saw the weakness in the market place. However those were very short term range positions. Sometimes its best to wait and see what the market decides especially with the action after 3:00 which clearly showed further weakness.
Today
We we are technically in an uptrend now so we need to ensure we will remain above the 840 and give the 857 a test here. Since we did not have the strength yesterday we can still follow up today with another up day, something I believe will occur with a close between 850 and 857.
How to trade this?
We have some great trades ahead of us again. We have the 840 range which gives you great protection but gains are limited. If we break 840 on the upside best chance is a run to 850, potential 856-857 so its 10-15 points. A break below the 840 will get us back to yesterdays low, though it is my expectation if that is to occur it will stop at the 833-834. A break of this range will of course bring us back to 820. So we have good potential for trades here today.
So keep those numbers in mind for today, and stay cautious. We still have potential to go into either direction though it is my feel we may test the upper ranges of the triangle I had shown on Saturday.
Monday, January 26, 2009
Sitting it out ....
Previous Trade day
Well the market gave us a repeat and traded yet again between the 804 and 840 range. Another sideways day on strong volume.
Today
I had made a special update this weekend after my weekly analysis. This is quite an interesting turn of events and could be setting up for another big run to the upside. The market has held the 800 range much stronger then I anticipated. No matter how bad the news is the market has gotten comfortable and has set bad expectations regards any fundamental piece of information. We seem to be taking the attitude of bad news being priced in and investors running tired of having further drops.
I have to admit, its the first time in a while I am not 100% confident of a move into either direction. Back in July 2008 I was afraid of strong down moves and went 100% cash in august while we were still uptrending - while that gave me great protection for sep/oct I tried catching the falling knife in heavily oversold conditions just to see it drop further and still managed to loose quite a bit of money. In november I was confident of the bounce of the 760 range even before the confirmation was in with a rally that will last till January. In december I was strong on hitting 945 for a great short down and it occured - now what will happen next?
All I can say is we are well prepared, have worked out all our signs and are now just sitting and waiting for those signs to occur. If you ask me where we will turn? I do not know, the primary trend is down and I am confident we will close the year a lot worse then we started - however, asking me where we will turn next - I will not be able to answer but I tried my best to provide enough information for the market to tell us.
How to trade?
Due to our indecision I would remain on the sidelines, any trend that will develop will retrace so do not try to chase it. I would be very cautious on both sides of the trade today, long and short and do not make the mistake of looking at the past 4 trade days and blindly going long off the 800 or short off the 840. This is doomed for failure today. Watch volume carefully if you are to enter any position.
Well the market gave us a repeat and traded yet again between the 804 and 840 range. Another sideways day on strong volume.
Today
I had made a special update this weekend after my weekly analysis. This is quite an interesting turn of events and could be setting up for another big run to the upside. The market has held the 800 range much stronger then I anticipated. No matter how bad the news is the market has gotten comfortable and has set bad expectations regards any fundamental piece of information. We seem to be taking the attitude of bad news being priced in and investors running tired of having further drops.
I have to admit, its the first time in a while I am not 100% confident of a move into either direction. Back in July 2008 I was afraid of strong down moves and went 100% cash in august while we were still uptrending - while that gave me great protection for sep/oct I tried catching the falling knife in heavily oversold conditions just to see it drop further and still managed to loose quite a bit of money. In november I was confident of the bounce of the 760 range even before the confirmation was in with a rally that will last till January. In december I was strong on hitting 945 for a great short down and it occured - now what will happen next?
All I can say is we are well prepared, have worked out all our signs and are now just sitting and waiting for those signs to occur. If you ask me where we will turn? I do not know, the primary trend is down and I am confident we will close the year a lot worse then we started - however, asking me where we will turn next - I will not be able to answer but I tried my best to provide enough information for the market to tell us.
How to trade?
Due to our indecision I would remain on the sidelines, any trend that will develop will retrace so do not try to chase it. I would be very cautious on both sides of the trade today, long and short and do not make the mistake of looking at the past 4 trade days and blindly going long off the 800 or short off the 840. This is doomed for failure today. Watch volume carefully if you are to enter any position.
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