Market commentary for 03/12/2009
Good day,
Wednesday's market action was expected. After a trend day we can expect to see a consolidation day and that is was exactly what we got. The market was up in the morning and down during day and then a reversal to the high area and small profit taking before close. A quick view on the daily charts and the doji bar will tell everything about the indecision and what we have for tomorrow. The DIA and the SPY closed the gap from 03/02/2009. That was resistance which was mentioned in yesterday commentary. The QQQQ was the strongest last few days and it reached the 20sma on the daily chart. Usually the first try to break the 20sma will fall and that was the case with the QQQQ. The question now is what can we expect tomorrow? It is obvious that 60 min charts are extended; also it is obvious the indices reached resistance areas on the daily charts and it won’t be strange to see a correction after this bounce from the lows. The SPY and the DIA already had three 60 min buying waves and formed possible lower high which suggests a correction. Will that lower high hold or not or we will see move upside after the open. I believe the SPY and the DIA have room for more upside on the daily 20sma. I just don’t know if that will be before or after consolidation. That is something that we can not know for sure, but we can know what kind of action is best for tomorrow. We had a number of good trades the last couple of days and now is time to calm down and be less active and more patient. Lower risk setups will be with small time frames which means that I will look for fast trades until market gives us direction. Of course if I will find “ and own way” chart I will trade it as usual. For new swing setups we will need to wait for the market signal.
Those of you that used to come into the trading room and stopped, I want to tell you 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,
Wednesday's market action was expected. After a trend day we can expect to see a consolidation day and that is was exactly what we got. The market was up in the morning and down during day and then a reversal to the high area and small profit taking before close. A quick view on the daily charts and the doji bar will tell everything about the indecision and what we have for tomorrow. The DIA and the SPY closed the gap from 03/02/2009. That was resistance which was mentioned in yesterday commentary. The QQQQ was the strongest last few days and it reached the 20sma on the daily chart. Usually the first try to break the 20sma will fall and that was the case with the QQQQ. The question now is what can we expect tomorrow? It is obvious that 60 min charts are extended; also it is obvious the indices reached resistance areas on the daily charts and it won’t be strange to see a correction after this bounce from the lows. The SPY and the DIA already had three 60 min buying waves and formed possible lower high which suggests a correction. Will that lower high hold or not or we will see move upside after the open. I believe the SPY and the DIA have room for more upside on the daily 20sma. I just don’t know if that will be before or after consolidation. That is something that we can not know for sure, but we can know what kind of action is best for tomorrow. We had a number of good trades the last couple of days and now is time to calm down and be less active and more patient. Lower risk setups will be with small time frames which means that I will look for fast trades until market gives us direction. Of course if I will find “ and own way” chart I will trade it as usual. For new swing setups we will need to wait for the market signal.
Those of you that used to come into the trading room and stopped, I want to tell you 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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