Market commentary for 01/06/2009
Good day!
After three trend days up it was not unusual to expect correction day. As I mentioned yesterday, it was good day for intraday setups. Day started with gap down, and around 10:00am ET reversal period indices found support and started with filling gap mission. Even volume was not so big, last days pace was very strong and I didn’t expect strong correction right after the open. After founded 30 min support area indices filled gap and back to Friday’s high. It was absolutely to high risk
To take long trade at highs because after 60 min 3 buying waves, after CCI divergence and with lower volume risk for break up continuation was too high. We can see on the 60 min charts that is reasonable and the SPY and the QQQQ made false breakup, while the DIA formed lower high what was sign for another intraday correction and back to morning low for the DIA and the SPY. The QQQQ was strongest while the DIA was weakest.
I hope that indices will continue with consolidation at Tuesday because strong breakout in any direction right now will not be good for risk in future days. Next support is 20sma on the 60 min chart and for now correction look good. If indices will back to Monday high and if they will break it, then it will be good for day trades only because after three buying days, one correction day is not enough for big buying continuation. On the other way if indices will lost 20sma 60 min and if correction will increase with strong pace and volume, then odds for long continuation will decrease and that wont be good for swing possibilities. Best will be if indices will continue with same correction pace and light volume next day or two. In that case odds for swing buying continuation will increase. Since risk for new swing setups will high higher, at Tuesday I will focus on intraday setup, unless there will be any “own way” chart, what is always good for swing setup.
Good day!
After three trend days up it was not unusual to expect correction day. As I mentioned yesterday, it was good day for intraday setups. Day started with gap down, and around 10:00am ET reversal period indices found support and started with filling gap mission. Even volume was not so big, last days pace was very strong and I didn’t expect strong correction right after the open. After founded 30 min support area indices filled gap and back to Friday’s high. It was absolutely to high risk
To take long trade at highs because after 60 min 3 buying waves, after CCI divergence and with lower volume risk for break up continuation was too high. We can see on the 60 min charts that is reasonable and the SPY and the QQQQ made false breakup, while the DIA formed lower high what was sign for another intraday correction and back to morning low for the DIA and the SPY. The QQQQ was strongest while the DIA was weakest.
I hope that indices will continue with consolidation at Tuesday because strong breakout in any direction right now will not be good for risk in future days. Next support is 20sma on the 60 min chart and for now correction look good. If indices will back to Monday high and if they will break it, then it will be good for day trades only because after three buying days, one correction day is not enough for big buying continuation. On the other way if indices will lost 20sma 60 min and if correction will increase with strong pace and volume, then odds for long continuation will decrease and that wont be good for swing possibilities. Best will be if indices will continue with same correction pace and light volume next day or two. In that case odds for swing buying continuation will increase. Since risk for new swing setups will high higher, at Tuesday I will focus on intraday setup, unless there will be any “own way” chart, what is always good for swing setup.
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