Market commentary for 04/27/2009
Good day,
Good day,
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Mediocre earnings and a stress test that isn't very stressful and the indices ended the week almost flat. The QQQQ reached a new high and a 7th up week in a row. The SPY and the DIA after seven weeks closed slightly lower. If we look on the weekly charts we can see the small room the QQQQ had last week is now filled and if we look at the daily time frame the 200sma is very close so the QQQQ has room for another small push up Monday morning. It is very easy to give market commentary after the fact. The problem is how to trade this market action. Looking back to the weekly chart it is obvious the resistance is here and that without rest we won’t see any new low risk setups. In the trading room Friday I said I am only interested in a correction and if the market goes up I will just watch. When we look back to the 60 min charts and see the trend move up many will say that I made mistake. I’m sure that my decision was right if we look from a trading risk view. Volume was light and since the indices reached the resistance area, a strong reversal that we saw (and back to high) was expected and that was reason why the risk was high. If same action continues on Monday I will do same. There is time for trading and there is time for watching. I’m not against scalp trading, but when I don’t have support on the bigger time frames I don’t the risk is just too high since you all know that my main focus is to find low risk setups. On the 60 min charts we can see that all three indices made a CCI divergence which is another proof the odds for reversal will increase. I don’t know what kind of reversal or correction we will see. It can be a daily base, can be strong reversal and also can be rounding top. I drew that possibility scenario on the SPY daily charts because I think that right now we have good odds for that. I don’t know if the indices go more up next week, but right now on daily charts I can see that pace is weaker and weaker on every new try which suggests a correction. I know we waited all week, but we can’t change the market, we can just follow it. Conclusion is same. I’m interested in a correction and I’m not interested in new highs right now without rest. Of course if I will find an “own way” chart that it is different. If the market continues with buying pressure I will just watch.
Mediocre earnings and a stress test that isn't very stressful and the indices ended the week almost flat. The QQQQ reached a new high and a 7th up week in a row. The SPY and the DIA after seven weeks closed slightly lower. If we look on the weekly charts we can see the small room the QQQQ had last week is now filled and if we look at the daily time frame the 200sma is very close so the QQQQ has room for another small push up Monday morning. It is very easy to give market commentary after the fact. The problem is how to trade this market action. Looking back to the weekly chart it is obvious the resistance is here and that without rest we won’t see any new low risk setups. In the trading room Friday I said I am only interested in a correction and if the market goes up I will just watch. When we look back to the 60 min charts and see the trend move up many will say that I made mistake. I’m sure that my decision was right if we look from a trading risk view. Volume was light and since the indices reached the resistance area, a strong reversal that we saw (and back to high) was expected and that was reason why the risk was high. If same action continues on Monday I will do same. There is time for trading and there is time for watching. I’m not against scalp trading, but when I don’t have support on the bigger time frames I don’t the risk is just too high since you all know that my main focus is to find low risk setups. On the 60 min charts we can see that all three indices made a CCI divergence which is another proof the odds for reversal will increase. I don’t know what kind of reversal or correction we will see. It can be a daily base, can be strong reversal and also can be rounding top. I drew that possibility scenario on the SPY daily charts because I think that right now we have good odds for that. I don’t know if the indices go more up next week, but right now on daily charts I can see that pace is weaker and weaker on every new try which suggests a correction. I know we waited all week, but we can’t change the market, we can just follow it. Conclusion is same. I’m interested in a correction and I’m not interested in new highs right now without rest. Of course if I will find an “own way” chart that it is different. If the market continues with buying pressure I will just watch.
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