Market commentary for 05/08/2009
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Good day,
Today's opening action was the same as Wednesday. the gap up for the QQQQ turned out to be “gap and crap” and the SPY and the DIA held for the first 15 min. After that the SPY selling pressure started and we had a strong move down on higher volume. If we look at the daily charts we can see the QQQQ formed biggest bar for awhile and it as red bar with big volume which suggests Wednesday's high will hold for some time. The SPY and the DIA also formed red bars with higher volume but not as obviously as the QQQQ chart. To see this more closely we need to look at the 60 min charts. With gap at the open, the SPY and the DIA opened above the channel, but that was a false breakout and it is good example why it is good to wait 15 min before taking any trade. It was a kind of trap for those who took longs right after the open. Rest of the day was strong move down with big 60 min red bar and a break under the 20sma support area without much consolidation. Now we can say that we got 60 min initial move with proper volume. I want to note that risk remains higher because this is the initial move and for a continuation we need to see a pattern (consolidation) and we still don’t have that. After a nice move the charts need rest and it depends on this formation so we can predict future action. With consolidation near the lows the odds for selling continuation will increase, if we will see stronger 60 min bounce then we will have odds for whippy action. You all know that after a move we can expect rest. That is what I expect Friday. Up/down action on smaller time frames what will again move our focus to smaller time frames for low risk setups. It will best if we find “own way charts” as we did with GIS and that will be always my focus. All updates about open trades will be in live trading room.
It is not too late to take advantage and subscribe to my service for the special monthly rate of $69.00. If you subscribe to this introductory rate prior to June 1st you will be guaranteed this rate as long as your membership remains in force.
Just click on the Subscribers tab on my site and follow the steps. Also you can register for FREE service and see new trading idea, examples every week.
Good day,
Today's opening action was the same as Wednesday. the gap up for the QQQQ turned out to be “gap and crap” and the SPY and the DIA held for the first 15 min. After that the SPY selling pressure started and we had a strong move down on higher volume. If we look at the daily charts we can see the QQQQ formed biggest bar for awhile and it as red bar with big volume which suggests Wednesday's high will hold for some time. The SPY and the DIA also formed red bars with higher volume but not as obviously as the QQQQ chart. To see this more closely we need to look at the 60 min charts. With gap at the open, the SPY and the DIA opened above the channel, but that was a false breakout and it is good example why it is good to wait 15 min before taking any trade. It was a kind of trap for those who took longs right after the open. Rest of the day was strong move down with big 60 min red bar and a break under the 20sma support area without much consolidation. Now we can say that we got 60 min initial move with proper volume. I want to note that risk remains higher because this is the initial move and for a continuation we need to see a pattern (consolidation) and we still don’t have that. After a nice move the charts need rest and it depends on this formation so we can predict future action. With consolidation near the lows the odds for selling continuation will increase, if we will see stronger 60 min bounce then we will have odds for whippy action. You all know that after a move we can expect rest. That is what I expect Friday. Up/down action on smaller time frames what will again move our focus to smaller time frames for low risk setups. It will best if we find “own way charts” as we did with GIS and that will be always my focus. All updates about open trades will be in live trading room.
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