Market commentary for 03/13/2009
Good day,
It sure is nice to have another nice move. When the daily doji bar broke higher it was signal for an upside continuation and that is what we got. The day didn’t start well with Europe and Asia down and the economic news continued to be bad. It came to a strong support area and for the rest of the day we saw nice trend move up. The start was choppier on the intra day action and it wasn’t easy to be 100% in bullish mode because of Wednesday's high and after those 20sma daily resistances (for the DIA and the SPY) were strong resistance. We started with mostly day trades that finished very nice. I expected the 20sma daily resistance area would hold and we closed day trades at that area, but with a strong gain for the rest of the day helped our swing trades to continue to reach targets. Now what? The DIA and the SPY closed above the significant 20sma daily and the QQQQ closed right under 200sma on the 60 min chart. On the daily charts we can see the indices have room for more upside to reach previous highs and with the close at the high the charts suggest that action in the morning. If we scroll the charts back and see the November bounce we can see the indices closed above the 20sma also and the next day we got a strong move down. The point is we are still in a bear market and the bad news can wake up the bears and kill any overnight trades. We had a number of really nice gains and we really don't know what will happen tomorrow. The charts suggest a continuation in the morning, the bear market suggests caution and lack of volume on the daily bounce warns for caution. Since my focus is always low risk setups I know what I will look for tomorrow. I will look for exits on open swing trades and I will be focused on individual action for intraday setups. Right now it is too late for swing long setups because market is too extended and for new setups we need to see daily consolidation. For short swing setups we need a market signal and right now are strong. Conclusion is we can expect less activity and intraday setups for low risk setups.
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,
It sure is nice to have another nice move. When the daily doji bar broke higher it was signal for an upside continuation and that is what we got. The day didn’t start well with Europe and Asia down and the economic news continued to be bad. It came to a strong support area and for the rest of the day we saw nice trend move up. The start was choppier on the intra day action and it wasn’t easy to be 100% in bullish mode because of Wednesday's high and after those 20sma daily resistances (for the DIA and the SPY) were strong resistance. We started with mostly day trades that finished very nice. I expected the 20sma daily resistance area would hold and we closed day trades at that area, but with a strong gain for the rest of the day helped our swing trades to continue to reach targets. Now what? The DIA and the SPY closed above the significant 20sma daily and the QQQQ closed right under 200sma on the 60 min chart. On the daily charts we can see the indices have room for more upside to reach previous highs and with the close at the high the charts suggest that action in the morning. If we scroll the charts back and see the November bounce we can see the indices closed above the 20sma also and the next day we got a strong move down. The point is we are still in a bear market and the bad news can wake up the bears and kill any overnight trades. We had a number of really nice gains and we really don't know what will happen tomorrow. The charts suggest a continuation in the morning, the bear market suggests caution and lack of volume on the daily bounce warns for caution. Since my focus is always low risk setups I know what I will look for tomorrow. I will look for exits on open swing trades and I will be focused on individual action for intraday setups. Right now it is too late for swing long setups because market is too extended and for new setups we need to see daily consolidation. For short swing setups we need a market signal and right now are strong. Conclusion is we can expect less activity and intraday setups for low risk setups.
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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