Market commentary for 02/26/2009
Good day!
Looking at the daily charts we can see big doji bar and that means indecision. The daily support area is still holding but the recovery is difficult and that probably results in the very whippy intraday action that we can see on the 60 min charts. Once the complete banking plan come out we probably will move one way or the other. We saw several strong moves in both directions which increased the risk for new setups and for intraday trading. Right now the safest way to trade is to take the 60 min or daily setups with bigger stops and smaller lots. That way we can avoid being stopped on the intraday sharp moves and fake breakouts. On the 60 min chart I was looking for a possible reversal head and shoulders pattern and they are still valid but definitely the intraday action didn't help. I found several nice weekly and daily CCI setups and they are still valid, but with the indecisive market it is very important to use the proper risk. In a normal market (what is normal now?) they usually all will work well, but don’t forget that we are in the news market and a technical analyst can be damaged with any bad news considering the economic situation of the world. As trader, right now we have two options. One is to be in cash and wait to see what will happen during the next few days and another is to use bigger time setups with larger stops and that means to use smaller lots than usual. That will decrease the possible profit, but it also will save you from a bigger loss. Look at the daily chart and the big doji with volume and it will tell you how indecisive the situation is right now. For tomorrow I will follow market action and I will stick with that plan and hope the intraday action will calm down and provide us with better risk setups.
For those of you that use to come into the trading room and stopped, I want to tell you the I am back full time and welcome all of you to come again. There is nothing to lose since there is no charge for the service right now. I look forward to seeing you all there.
Good day!
Looking at the daily charts we can see big doji bar and that means indecision. The daily support area is still holding but the recovery is difficult and that probably results in the very whippy intraday action that we can see on the 60 min charts. Once the complete banking plan come out we probably will move one way or the other. We saw several strong moves in both directions which increased the risk for new setups and for intraday trading. Right now the safest way to trade is to take the 60 min or daily setups with bigger stops and smaller lots. That way we can avoid being stopped on the intraday sharp moves and fake breakouts. On the 60 min chart I was looking for a possible reversal head and shoulders pattern and they are still valid but definitely the intraday action didn't help. I found several nice weekly and daily CCI setups and they are still valid, but with the indecisive market it is very important to use the proper risk. In a normal market (what is normal now?) they usually all will work well, but don’t forget that we are in the news market and a technical analyst can be damaged with any bad news considering the economic situation of the world. As trader, right now we have two options. One is to be in cash and wait to see what will happen during the next few days and another is to use bigger time setups with larger stops and that means to use smaller lots than usual. That will decrease the possible profit, but it also will save you from a bigger loss. Look at the daily chart and the big doji with volume and it will tell you how indecisive the situation is right now. For tomorrow I will follow market action and I will stick with that plan and hope the intraday action will calm down and provide us with better risk setups.
For those of you that use to come into the trading room and stopped, I want to tell you the I am back full time and welcome all of you to come again. There is nothing to lose since there is no charge for the service right now. I look forward to seeing you all there.
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