Market commentary for 03/17/2009
Good day,
Incredible as it seems a rally started with AIG up 100%, C up 50% and BAC up 35%. These are/were Dow components, amazing. Monday brought us exactly what we expected. I was a little too aggressive with shorts after the open, but after lunch, they all did very nice. Last week and yesterday I mentioned several times in the room and in my commentary that I will look for 60 min CCI 3d setup and that was reason why I didn’t like the long side on Monday. Because of that possibility I just didn’t trust new long setups. The indices reached a strong daily resistance area and since the volume on the move up was not strong I will expect more of a correction during the next few days. Tuesday is the FED meeting, I believe it is a two day affair this time so no decision till Wednesday. We will probably chop till Wednesday. In the past decision day usually brings upside in the morning, however, that has not been the pattern lately. Instead, pretty much anything goes for the morning and today is likely to be a slow one given the lead-up into it. Volume usually drops off dramatically heading into mid-day and trading at this time becomes very risky. At times we will see a bit of activity ahead of the Fed. As the Fed announcement nears, look to close down extra market minders and level II screens to avoid system lock from the surge in volume following the announcement. Trading at this time is high risk due to data delays and rapid price movement.
Three waves of activity tend to follow a Fed announcement. There is an initial reactionary move, followed by a correction. This correction can be stronger than the initial reaction. A third wave follows, heading back in the initial post-announcement direction.
On the 60 min chart we can see that the SPY and the DIA are still above 20sma which is a strong support area. With 60 min support area and FED day we could see a bounce in the morning, but that won’t change my expectation for more of a daily correction from the highs. My focus will be for intraday setups and that depends on market action I will look for possible swings after announcement.
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,
Incredible as it seems a rally started with AIG up 100%, C up 50% and BAC up 35%. These are/were Dow components, amazing. Monday brought us exactly what we expected. I was a little too aggressive with shorts after the open, but after lunch, they all did very nice. Last week and yesterday I mentioned several times in the room and in my commentary that I will look for 60 min CCI 3d setup and that was reason why I didn’t like the long side on Monday. Because of that possibility I just didn’t trust new long setups. The indices reached a strong daily resistance area and since the volume on the move up was not strong I will expect more of a correction during the next few days. Tuesday is the FED meeting, I believe it is a two day affair this time so no decision till Wednesday. We will probably chop till Wednesday. In the past decision day usually brings upside in the morning, however, that has not been the pattern lately. Instead, pretty much anything goes for the morning and today is likely to be a slow one given the lead-up into it. Volume usually drops off dramatically heading into mid-day and trading at this time becomes very risky. At times we will see a bit of activity ahead of the Fed. As the Fed announcement nears, look to close down extra market minders and level II screens to avoid system lock from the surge in volume following the announcement. Trading at this time is high risk due to data delays and rapid price movement.
Three waves of activity tend to follow a Fed announcement. There is an initial reactionary move, followed by a correction. This correction can be stronger than the initial reaction. A third wave follows, heading back in the initial post-announcement direction.
On the 60 min chart we can see that the SPY and the DIA are still above 20sma which is a strong support area. With 60 min support area and FED day we could see a bounce in the morning, but that won’t change my expectation for more of a daily correction from the highs. My focus will be for intraday setups and that depends on market action I will look for possible swings after announcement.
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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