Market commentary for 05/26/2009
Good day,
Friday was in line with expectation. Volume was very light and we saw choppy market action. Usually I will say that is worthless market action, and since it was Friday before long weekend it was great chance to close day earlier. Now let’s see what charts suggest. First I will start with 60 min charts. Friday action was needed for low risk continuation possibility. The DIA and the SPY still have 200sma as strong support and it won’t be bad if they will stay in range at Tuesday. That will decline trading risk. I draw equal move (blue lines) and you will see on daily and weekly chart that indices have room for that scenario. In breakdown case we will must pay attention on pace and that will tell us what target we can expect and we can follow that in the live trading room.
Good day,
Friday was in line with expectation. Volume was very light and we saw choppy market action. Usually I will say that is worthless market action, and since it was Friday before long weekend it was great chance to close day earlier. Now let’s see what charts suggest. First I will start with 60 min charts. Friday action was needed for low risk continuation possibility. The DIA and the SPY still have 200sma as strong support and it won’t be bad if they will stay in range at Tuesday. That will decline trading risk. I draw equal move (blue lines) and you will see on daily and weekly chart that indices have room for that scenario. In breakdown case we will must pay attention on pace and that will tell us what target we can expect and we can follow that in the live trading room.
On the daily charts indices made lower high after strong start. The SPY and the DIA closed week under daily 20sma after long time what suggest that daily/weekly resistance will hold for some time. I know that everyone expect weekly correction (including myself) but daily charts suggest for now that wont be easy. Reason for that is first bounce from 20sma and back to lower low. Pace of that bounce was very strong, much stronger then we want see for reversal pattern (avalanche) and that action increase odds for daily range or rounding top action. Whatever will be, for now daily charts suggest that we won’t see clear trend down right at start. Of course that can change in day or two, but right now charts suggest that. Strong down, strong up, strong down result usually with range. It can be base, but also can be channel down, we will see. Next week will give us answer because if 60 min scenario will go with strong pace then daily range scenario will decrease.
On the weekly charts we can see that buying pressure lost steam but first support area (10sma) is close and that support commentary about daily charts. After 10sma there is price and finally 20sma support area. We can’t know which support will hold because daily action not helping us. I will little back on bounce pace at daily charts. In case that was weak (avalanche) then I will look for stronger reversal on weekly charts, but right at start, with close support and odds for daily range, I will expect that risk will be high for swing trades. For longer correction we must follow weekly charts and 20sma as main support area. Hope that I explained successfully what I see and what expect from next week. First I want see if can indices made new low on daily charts. That will give us answer about range or new trend down (lower high-lower low) and answer on that we will see first on 60 min charts.
I invite you all to join us for very popular price and it is open only next week. After that price will be increase. Wish you all good trading next week.
Wish you all good trading!!!
Kind regards.
Danded2005@inet.hr
Ivica
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