Market commentary for 03/18/2009
Good day,
I mentioned in yesterday's commentary the 60 min 20sma is a very strong support area and if we look at the charts we can see that. But honestly, I didn’t expect that strength. Most of the day we had slow scalp market action without much follow thru and in the last hour the buying pace started to increase and indices finished the day at its highs. The QQQQ closed at a new daily high right under the 100sma resistance area. That is the problem for future upside move without daily consolidation. The resistance areas are close. If we look back on the weekly charts we know the indices have room for more upside move, but without rest on the daily charts trading risk for new setups are high risk. Today the FED announcement is at 2:15 pm ET.
In the past this usually bring upside action 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. More often than not, when this happens, it is to the downside.
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.
Since indices closed right at highs, we have fair odds for continuation in the morning, My focus will stay the same.
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,
I mentioned in yesterday's commentary the 60 min 20sma is a very strong support area and if we look at the charts we can see that. But honestly, I didn’t expect that strength. Most of the day we had slow scalp market action without much follow thru and in the last hour the buying pace started to increase and indices finished the day at its highs. The QQQQ closed at a new daily high right under the 100sma resistance area. That is the problem for future upside move without daily consolidation. The resistance areas are close. If we look back on the weekly charts we know the indices have room for more upside move, but without rest on the daily charts trading risk for new setups are high risk. Today the FED announcement is at 2:15 pm ET.
In the past this usually bring upside action 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. More often than not, when this happens, it is to the downside.
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.
Since indices closed right at highs, we have fair odds for continuation in the morning, My focus will stay the same.
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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